Everything You Need to Know About the New Updates to Zoning & Development in Vermont!

Did you know that it’s been forecasted that in order to meet the increasing demand for housing, Vermont will need to add another 30,000 - 40,000 year-round homes by 2030? That’s more than 5,000 homes added annually! Currently, the state only adds about 2,100 homes to its inventory each year, which means that in order to meet the projected need for housing, we would have to more than double the current numbers! These numbers sound staggering, but the lack of available housing in the state of Vermont is certainly not a new issue and has been and continues to be a hot topic amongst Vermonters. Much of the challenge with keeping up with the demand for housing in our state stems from the fact that there are simply not enough homes to provide housing to all of the people that need it, and the lack of new inventory we’ve seen due to market conditions paired with the higher demand for housing our state has experienced over the last few years, has shined an even bigger light on the matter. In an effort to help promote housing in the state, several changes to programs and funding aimed to impact the future of construction and development in Vermont have been discussed and the S.100 Bill was officially signed into effect by Gov. Phil Scott in early June. This bill outlines several municipal planning and zoning changes as well as updates to Act 250. Here is what you need to know:

Single-Family Zoning Changes

One of the most exciting changes outlined in the bill, at least in our opinion, is the legalization of the construction of duplexes wherever single family units are already zoned! This means you can make your single-family home into a duplex without having to change use of the property or go through some of the more difficult zoning processes that you previously would have. This is a big change because it not only adds additional wealth building opportunities to single-family home owners - since having an additional unit in your home to rent out is a great way to earn additional income and offset housing costs - but it has the potential to increase the number of rentals available in the state which would help offset the lack of inventory in the rental market as well, which is currently just as competitive and challenging as the real estate market is. This change also provides more opportunities for families that want to create multigenerational homes and it allows for the possibility that some properties could be maximized and used more effectively.  

And Vermont is not the only state to make changes to single-family zoned lots to allow for additional housing to be added. Oregon banned single-family zoning in order to improve housing opportunities in 2019. California banned this same zoning in 2021. Washington followed this trend and passed their bill in March of this year, banning single-family zoning and legalizing duplexes and fourplexes in almost every neighborhood of every city in Washington.

Updates to Act 250

The second most notable change in the bill is in relation to Vermont’s Act 250 law - first enacted in 1970, Act 250 is Vermont’s land use and development law and its purpose is to regulate specific types of development and subdivision throughout the state. Vermont is not necessarily known as one of the easiest development states, and one of the issues with keeping up with development needs, is that Vermont’s Act 250 law has historically made it somewhat difficult for smaller scale builders to develop and build more than a certain number of homes due to the Act 250 rules and process. The law limits the number of properties one person or entity can build over a certain time period and within a certain distance before having to apply for an Act 250 permit - previously it was 10 lots within a 5 mile radius over a 5 year time period. Going through the Act 250 can be a deterrent for builders because obtaining an Act 250 permit can be time consuming and subsequently, costly. We have very few residential large production developers in the state and instead we have many more small to medium size builders that develop fewer properties per year and don’t necessarily have the time or resources to go through the Act 250 process, so the new change to increase the number of units that can be built without triggering Act 250 will be very beneficial for them. As of July 1, 2023, you can now construct up to 25 units without triggering an Act 250 permit.

Overall, we think the new bill is a great step forward and it is refreshing to see some changes being made that will allow for easier development, opportunities for existing homeowners and better use of the properties we have in our state!