Vermont Legislature SmartTranscripts:

[Marc Mihaly (Chair)]: Good morning, Today is Wednesday, January 7, and this is the General and Housing Committee. What we're doing today is continuing a set of initial hearings, which are addressing the question of, given our legislative history and all of the legislation that we have passed in recent few years, what is working, what isn't working, why, and directions that we might consider taking. And this morning, we're starting off hearing from the League of Cities and Towns. And I believe we have two of you, right? Please come up. We have Josh Hanford and Samantha Chittenden. It's here. We have a forum, we're missing a few people, part of our problem is that the conditions outside today are self filled. I decided to delay the hearing slightly, and there are still people who are on the road and will be joining us later. Thank you. Please take it away.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: Sure. For the record, Josh Hanford, Director of Intergovernmental Relations at La Plague Cities and Towns. And my

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: name is Samantha Sheehan, the Municipal Policy and Advocacy at La Plague Cities and Towns.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: Thank you for inviting us in early. Glad you're talking about what is working, what could be done to improve housing, and happy that you're starting sort of with the municipal perspective because ultimately that's where homes are built. So we know you want it sort of brief, you didn't want us to review the sort of state of housing and the need that we all know exists. So what we're gonna do is give you just a very brief overview of what our legislative priorities are. This session voted on by our members and our board, specifically the housing ones. We're gonna talk a little bit about short term rentals. I know we had that discussion last year. We're gonna talk about act 181 implementation and that's impact Not only housing built in municipalities, they're also built on land and the regulations around that land from a state or local level have a big impact. We're gonna talk about our recommendations on how to move forward with Act 181, what's going well, what we support and just some other ideas for discussion as time allows. So at a very high level, priorities this year, I don't know if we

[Marc Mihaly (Chair)]: have the other bubble, no, it's okay.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: We had an opening statement above the 2026, but you could see we really have four areas of interest, lower property taxes, build housing, promote public safety and prioritize transportation. Obviously, we're gonna focus with you on the building housing piece, really that statement around support the creation of new housing that municipalities need, have envisioned and have planned for and allowed in local zoning is what we're gonna focus on. So under the build housing, we talked about this last year. We do have some authority to regulate short term rentals, far as requiring a registration or an inspection program, but we don't have the broad authority to raise revenue, to have a tax beyond the 1% local option tax, which goes to all rooms. And many municipalities have recognized that short term rentals are both vital for their community's economy and also impacting the housing market in their community. And with the authority to raise revenue from short term rentals, they can individualize a municipality's approach to mitigating those impacts by putting that money towards investments in affordable housing or infrastructure that could build more housing or even beautifying the main street with flowers and events that short term rental operators would appreciate their properties being located in such a vibrant town. So it's sort of an all sort of across the board effort with the revenue generated from short term rentals that often local residents feel that if they're gonna impose the existing 1% option taxes, it affects their residents the most. What they're really interested in is gaining some revenue from those that are visiting that have the luxury to visit, have the wealth and we currently can't do that with authorization. You'll recall that the state just a year or two ago put a three percent surcharge on short term rentals across the board, that revenue all goes to the state education fund. So municipalities don't receive any of that. So we have more details on that later. We talked about this also last year, and it's been a long held ask from municipalities in VLCT that we should have property tax stabilization authority, not just the municipal tax. We know that in many municipalities that's only 20 to 30% of the property tax bill we need statewide. We are open to any parameters to put on this to mitigate the impacts of the budget and the Ed Fund, cap, a community size, we're open for any discussions, but the reality is 75% of municipalities are under 2,500 people in the state. Chip or even Chip might not work for every small housing project, but if you can plan your project with tax stabilization for ten years, you can leverage that and you can invest, more capital into a project and know what your costs are going be and come out on top. And a lot of small developers really could benefit. Thank

[Ashley Bartley (Vice Chair)]: you. You just said ten years. Obviously, if something like this comes to our wall, we'll talk about the different options, but I'm assuming that you've kind of gone through the different options there are. Is ten years the sweet spot? Is there a different number you would use? We've heard the feedback from builders that they

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: think ten years is sort of the minimum productive amount of time that would support their financing. And one way we're thinking about this a little bit differently this year is this could and arguably should be built in a way that services sub chip properties. So properties that are small, so maybe things like duplex conversion, ADU additions, improvements to existing single family homes to multifamily rentals, and also where the municipality does not wish or it's not appropriate to the project to endeavor a public improvement attached to the development. So there may be a small scale infill, rural infill scale housing project that doesn't need a substantial, expensive public improvement, so the municipality doesn't want to use CHIP. And this type of agreement could really service that project and provide the predictability that the developer needs to move forward.

[Marc Mihaly (Chair)]: I should just to be clear to the committee, Charlton and I have a bill that includes a tax stabilization provision, which they're aware of, and it's somewhat responsive, perhaps not totally responsive to what they're saying.

[Ashley Bartley (Vice Chair)]: Is there a year in there? I don't think I've read the bill yet.

[Marc Mihaly (Chair)]: It's not, that's because it isn't yet. Okay. The next few days, it'll come out, then it'll be introduced, and we can talk about it.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: Awesome, thank you for doing that.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: The next one, I think everyone that has talked to this committee and all the land use committees agree that brownfield cleanup and redevelopment is a good idea, especially if you wanna redevelop in our centers, they all have urban soils, they all have contamination, it's been very successful, it's very expensive and it's very time consuming and we can't slip. We've had continued investments and they've worked. This is one of the few places we say yes, this is where our priority is to invest appropriations and keep this work going. Next one's about

[Marc Mihaly (Chair)]: Before you go on, do you feel, so you want more money for Brownfields, so you support appropriations for Brownfields. How about the Brownfields process? Do you feel like it needs to change, or what are your thoughts on that?

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: Yes, maybe we could come back and say more. There was a Brownfield deficiency study that is a result

[Marc Mihaly (Chair)]: of

[Thomas "Tom" Charlton (Member)]: for

[Marc Mihaly (Chair)]: it, the last year's we got it all 57 pages of it or whatever.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: Right, and we read it and not sure that it really does the job.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: We'd love to bring more ideas about how to accelerate and make more efficient the brownfield program. I'll say that, so VLCT, not Josh and I, but our colleagues in the municipal operations support department assisted all two fifty one towns with their ARPA deployment of the municipally allocated ARPA money and on a number of state ARPA funded programs that engaged municipal government over the last five years. And in all of that substantial amount of work done between state and local government, I think the highest rated ARPA investment that we hear about is Brownfield. It seems like that investment of ARPA funds was really productive and the municipalities had a really positive experience and have really felt the positive impact of those projects for housing.

[Marc Mihaly (Chair)]: So it's not as if Brownfields are just focused on the larger towns, the smaller towns, you're getting across the board support, okay.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: Totally. Mean, my old town in Rochester, there's a major brownfield right in the middle of it that has been worked on for years. It could be a great multi apartment mixed use development, but Brownfields is a problem and it's very expensive.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: And those communities already have a sort of market problem with the tracking development. And oftentimes these sites are big in the middle of town and they disproportionately weigh down the grand list. When they're an undervalued, underutilized property in a small town with a short grand list, it works its way up to the community's priority, top of the priority list, basically.

[Thomas "Tom" Charlton (Member)]: Just a question for my own query. How encompassing is Brownfields when we refer to it as what happened? Like, in your town, like, how far gone does it have to be before you're like that qualifies?

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: Because there's definitely a lot of properties out there.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: Question because it's actually actually, that Brownfields is like the middle. There's a level of contamination above and beyond brownfields that requires more substantial remediation. It's called the regulation of urban development soils, is this area of policy. And in Vermont, we actually set thresholds differently based on the population density, more or less, of the community. So the soils can be more contaminated in a rural community or more contaminated in urban, less in a rural. The way it works is it's sort of burdensome. We have well established, and in many cases, especially around roads, because roads throw this type of contaminant that we regulate. So when we're looking to build, even in a rural community, on a transportation corridor, you trigger the regulation.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: So you trigger it sooner in the rural area?

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: It's on a road, often.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: An unrecognized win maybe is in last year, there was an addition that allows ANR to reestablish stump dumps, which are a type of transfer station that could take urban soils and not have to truck it to New York or Pennsylvania, which we do now, it's very expensive. And irony is you've trucked that soil away a couple of years later, this new soil is also just as dirty. And so there are practical ways to reduce our costs of urban soils. We have higher standards in most states, when it's triggered and it's very expensive, you try to use it on-site in the engineering, put it under the parking lot, put it in, but in dense areas, you can't, you have to truck it away and it costs a lot And we're trucking it to other states and paying to put it in landfills when it's really, if it's just left in ground, it's inert, it really doesn't cause any problems. We could have siting of stump dumps in Vermont and legislation last year sort of asked ANR to do this work, but we haven't really heard anything said, so.

[Marc Mihaly (Chair)]: This is a whole, I will add, having read the report, all 57 pages of it this summer, it came in exactly on time, in fact ahead of time, from the date we requested it, and a lot of the report was telling us that it was other people's fault, but I do feel that this is an area worth attention. The problem is that nothing's going to happen unless it's a lot of attention. It's just a very complicated area.

[Emilie Krasnow (Ranking Member)]: What do you mean by other people's fault? Is other people's fault or other people's responsibility?

[Ashley Bartley (Vice Chair)]: Fault. Yeah.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: What do you mean by that?

[Marc Mihaly (Chair)]: I I wanna try to be politic. There there wasn't a lot of suggestion about what a and r ought to do and a lot more about what towns ought to do, what developers ought to do, what engineers ought to do. It was pretty much about everybody else. Is that fair?

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: That was our read.

[Emilie Krasnow (Ranking Member)]: Yeah, so that's, I think, more responsibility than all that's in that.

[Marc Mihaly (Chair)]: Or responsibility, you're right. Okay, I should use that word. I

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: guess what we propose, and then I'm anxious to move on to Act 181, are innovative and evolving ways to treat the soil so that we're meeting the standard of regulation, which is actually set by BDH, but not digging it up and shipping it out of state, which is where the expense comes when you're trying to build a housing unit. So I guess hopefully that's what we would like to talk about. Short of that, feedback we receive from members is that the existing Brownfield redevelopment program may be slow. I think the report says three years is sort of

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: the

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: average deployment of funds for construction, but even with that, it is a well loved, utilized, high priority program for our members of all sizes.

[Marc Mihaly (Chair)]: Great, thank you.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: So we're going to skip all the Act 181 discussion four fifty six, because we have a couple of slides in that. The last one is maybe new about agriculture. Right at the end of the session last year, there was a Supreme Court case that determined in May that the long held belief that municipalities had no authority to regulate agriculture as a business or any other land use was struck down by the Vermont Supreme Court and really said in summary, it's just about the water quality regulations that the agency of agriculture is the authority to regulate and town shouldn't regulate that. But like any other land use, like any other business, think right away, think setbacks, think safety issues, parking. No, municipalities have the right to regulate, have land use regulations. And so a series of panic happened I think among the agriculture community and the agency bag. We've met with the agency bag in a very collaborative way over the entire summer and fall because this then opened a traditional policy of VLCT is municipalities should have the right for land use regulations if they've adopted zoning planning and zoning in their town. Not every town has planning and zoning. There's 90 that don't. So in those towns that have gone through a long lengthy public process required, they have the right to regulate land use. But the very real reality is most towns don't wanna regulate agriculture and most of the land they don't want to regulate it. In the very dense areas of our designated downtowns, our tier one areas that we're going through this process to say, that's where you're gonna put housing. Here's your housing goals, here's where your growth is going to be. We've had four years of legislation preempting local zoning in those areas, Act two fifty is exempted. We have to have all types of land use on the equal footing in those areas to achieve those goals. So we've essentially adopted a policy of VLCT, which sort of goes against the tradition that says no, in 98% of Vermont towns land, we don't wanna regulate agriculture. You see bad can but in these very dense areas where we have our requirements and housing targets and goals, five units per half an acre, whatever it is.

[Marc Mihaly (Chair)]: Is it the tier Yes,

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: water and sewer, we need this authority otherwise those other things don't.

[Marc Mihaly (Chair)]: So you're saying in tier one, yes, regulate, but outside of tier one exempt it.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: Yes, and what we actually say is where there is Act two fifty exemption, not in the FLU, which we'll get to very So

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: it's a very small area.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: So this is after Minasaddi has gone through quite literally three to ten years of public process to establish the ability to achieve Act two fifty And

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: it doesn't mean to talk about it. This has been since May 30, we're not aware of one town that started to regulate agriculture. So they would have to choose to go on this path only if you have planning and you have, so 90 towns can't even do this, the others could, if they want to, and it doesn't mean they would stop farming or anything like that, but they could say, hey, on this setback or this corner, egress needs to be the same as the auto dealership next door. First of all, we don't think there's many farms in areas that have water and sewer with Act two fifty exemption. There may be some very small farms and the agency of agriculture is actually making a proposal as well that comes at this from a different direction. It talks about farms under four acres, one to four acres with livestock that they should be regulated by municipalities. So there's some agreement that in very small farms and very dense areas, there has to be some regulation. If you think where this came from, the Essex duck farmer in a neighborhood on a third of an acre lot is where this went to the Supreme Court. Those are the exact places where competing interests and uses of your land have to be treated fairly. Because what if a farmer was planning to grow and have crops with greenhouses and then your neighbors put up five story apartments all around and block the sun. People on both sides of this issue have to understand what the rules are, what the building code, the So this is what this is for. It has no attempt whatsoever for municipalities that wanna take over regulating farming in any way, shape or form. Ashley, thank you. So I'm following, or I followed this case very closely in Franklin County and pretty much not just my district, but

[Ashley Bartley (Vice Chair)]: the entire county is farmers. I come from a long line of dairy farmers. Regardless of what a municipality wants and if they have the ability, I know all of my farmers are very concerned about this, would your recommendation be make this change in this committee, or are you planning to go speak to agriculture this year?

[Emilie Krasnow (Ranking Member)]: I isn't think

[Marc Mihaly (Chair)]: the ag committee.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: We're going to ag next week, but the reality is this is a landings regulation.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: Is an Yeah, agriculture issue. Yeah, this is squarely in the authority of a municipality to Yeah,

[Marc Mihaly (Chair)]: but my impression is ag is going to hold hearings on this.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: We're going next. You guys Do

[Marc Mihaly (Chair)]: you have legislation?

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: We have a policy statement.

[Marc Mihaly (Chair)]: No, but is anybody introducing legislation to your knowledge?

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: To my note, there was a rather quick attempt last year during the special session in June to revert back to the common understandings by changing the legislation, but I haven't seen any bill introduced.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: We have it. We have it.

[Ashley Bartley (Vice Chair)]: You send the policy statement to me?

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: Absolutely. I'd appreciate that. Mr. Chair, I just wanna check if you're fine. I

[Marc Mihaly (Chair)]: would well, we're I'm almost Yeah, we've got one more witness and we have until 10:30. So, I would say try to be within fifteen minutes.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: Okay, perfect, great. I thought we had like four and I was like, my heart was starting rate,

[Ashley Bartley (Vice Chair)]: it's great. So

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: we've been here before and talked about the regulation of short term rentals. What I wanted to bring to you today is this graphic from city of Burlington housing report in 2024. So municipalities currently regulate short term rentals in different ways. And all municipalities have the authority to do so through ordinance. And they all have the authority to accept fees under that ordinance, although the fees cannot generate revenue, is the simplest way to put it. So the fee can basically cover the cost of the permit and registries as those expenses acquire incidentally, but they cannot generate revenue above and beyond that. So many municipalities do. I actually was looking at some ordinance last night. Windham has a relatively low cost to permit a short term rental if it is an owner occupied short term rental. And then for a non owner occupied short term rental, it's $1,400 So a way that they implement policy to address their local needs related to short term rental is in the cost of the fee. Other municipalities regulate in a way where they simply require a fire safety inspection. Others require a registration, an application, an emergency contact and a wastewater permit on file. And a lot of our communities that don't have public municipal water and sewer, a primary concern of the short term rental market is making sure that the number of bedrooms listed on the Airbnb or VRBO listing matches the existing DEC permitted septic tank.

[Emilie Krasnow (Ranking Member)]: That was great. Thanks. So just to be absolutely clear because I'm ignorant on this subject, I just received an email from a constituent last night about this just for full disclosure. Short term rentals are really only regulated locally? Because I have a constituent who asked about owner occupied short term rentals.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: Well, there's a state registry and a 3% state excise, which Josh referenced, which goes to the education fund. But in terms of things like requiring an inspection or a permit, level of

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: There actually isn't a statewide Okay,

[Emilie Krasnow (Ranking Member)]: that's local.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: Right, that's There is a statewide process for dealing with complaints on housing safety issues. It's typically meant for long term rentals, but there's nothing that would prevent someone renting a property, finding a safety issue, fire and safety for an inspection to do that. It's just their numbers of those responses is very, very teeny. What I've heard because the short term rentals people are gone, often the reviews and the complaints will fix that problem of people say this place is unsafe and too cold, they won't get more customers, but technically they are able to make complaints through that. That was a compromise a couple of years ago, a bill to have a process statewide and not rely only on that local health officer to deal with life safety threats in rental properties?

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: So in summary, municipalities have the authority to regulate short term rentals as they do long term rentals. An increasing number of municipalities have adopted these ordinances and are enforcing them. What they don't have is the ability to, or the authority rather, to set revenue to pay for that or to address the other local impacts of having a vibrant, successful short term rental economy in their town. So there's one far outlier here, which is the city Of Burlington. So the city of Burlington has a unique charter established excise tax authority. They also have, for example, a separate excise tax on hotels, not lodging, just hotels. They have a 9%, I believe, excise tax on short term rentals that took effect in 2023. The revenue generated from that 9% local tax covers the cost of enforcement through their permitting and inspection department, and it generates an additional more than half million per year, which they put into their housing trust fund, affordable housing trust fund. That trust fund has existed for, I think, more than thirty years. I actually think Mayor Sanders, Bernie Sanders, established it back in the '80s. And so here you can see in this provided chart, it shows the revenue to that housing trust fund over time. So they have a municipal tax rate that raises revenue from property taxes. That's the dark blue. They also have an inclusionary zoning ordinance, which has a fee attached to the federal redundant developer unit, they can pay into the housing trust fund. So that's the green revenue. So you can see that goes up and down. So that depends on the rate of construction locally. For a period of time, the city chose to actually use money from their unassigned fund balance and sort of lift the housing trust fund up, but that was not a long term dedicated revenue. And then you see when this short term rental ordinance takes effect and begins to be enforced in 2023, the revenues for this affordable housing trust fund rapidly exceed a million dollars per year. So at the time this report was published, they were estimating 685,000 just from the short term rental excise tax for Burlington. You may be thinking that's Burlington, but in fact, Burlington currently has registered less short term rentals than Stowe, for example. So there are communities across Vermont that have a larger, more robust short term rental economy in their municipality than Burlington, while Burlington is the unique municipality that can assess fees and raise revenues that support their local housing goals. So that's what we're asking for. We talked about it last year, we'd love to talk more about it this session.

[Marc Mihaly (Chair)]: So what you're saying is, is the limitation on fees either is it a statutory or are you talking about the constitutional nexus requirement?

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: I don't know.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: Okay. Well established that any fees that municipalities put forward have to be justified. There

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: is a fee sending authority in Title 24.

[Marc Mihaly (Chair)]: Right, in Title 24, okay. But you're saying in addition, you'd like the ability to, like Burlington, levy a tax, maybe the state would levy the tax, the town would get it, but it would be a local option. Yeah. Right?

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: Yeah. I think what we talked about last year was adding another 1% option tax, but just for short term rentals. If you had a lodging establishment with your major employer in town, you could choose, oh, I'm going to apply it to both or just short term rentals, and that doesn't exist at this point.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: Yeah. So now we're going to dive into Act 181. And we have followed closely the implementation of Act 21. I want to say first that the new Land Use Review Board has clearly been working diligently to meet the various reports, stakeholders, groups, rulemaking and mapping deadlines that were created in Act 181. Josh and I have each served on some of those legislatively created working groups and also have other VLC team members throughout the last six months. And overall, that process is going very well. That said, we see with where we are now in the mapping for both the draft tier three rule and the draft regional maps.

[Marc Mihaly (Chair)]: Let me just interrupt. I just want to clarify. When you're saying it's going well, you're referring to the tier one process.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: The blurb directed processes, which are like

[Marc Mihaly (Chair)]: All of them, including tier three, the road rule, tier two, or you're feeling

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: Meaning that they are meeting their obligation, they're doing hard work, trying to engage the public, trying to keep everyone informed, they're following what they were told to do.

[Marc Mihaly (Chair)]: Okay. I

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: think we have some disagreements on how it's going.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: What are the result of that work product is? And particularly there's a few conceptual issues that we argue did not meet the intent of Act 181 and did not support state or local housing goals, or were fearful that the end result could impact our ability to meet those targets. So that's what we'd like to talk about. So in tier one, so to establish tier one, you map that area through the regional planning maps. Only three regions have a draft map that is before the LERB now that are available for us to look at and analyze. It's Rutland, Chittenden, and Northwest. And the other counties or RPC areas are in different stages of having a draft map developed, and they're on a schedule to come in line behind those. From the information available now through the regional planning process, the current estimate for future tier 1A areas, so this would be areas totally exempt from Act two fifty, is likely going to be less than 12 municipalities total that are prepared in this initial process to achieve Act two fifty exemption. That's not 1B, we're still getting a grasp on 1B. And the total eligible area for 1A or 1B is currently estimated below 3%, two to 2.5% of total land area of the state. That varies widely by county. So you have Chittenden County with the highest percentage of future eligible exempt area, and then you have the NEK with the lowest percentage of future eligible area. So in some regions, the likelihood of any Act two fifty exemption at all in the future is very low. And I'll pause here to say one of our recommended actions is to remove a requirement from Act twenty eighty one. Again, it's a requirement of municipalities to enforce old Act two fifty permits in tier 1A. This is the number one across the state reason that we hear from members that they're either not interested in 1A or they're creating a 1A area smaller than what they would be eligible for because of particular complex existing developments that have Act two fifty permits with conditions that the municipality does not feel it can meet the enforcement requirement of. And

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: sort of the odd part is, in order to get approved for tier 1A, you're proving that you have local language regulations that meet or exceed Act two fifty requirements. In fact, they might be better. So you're being asked to enforce two sets of rules, your new parking that maybe requires less parking, but an old Act two fifty permit that requires more parking. Municipalities are just not

[Marc Mihaly (Chair)]: I think that should stay with the LERB or with the regional Yeah,

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: so state's permit. It's their

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: State's permit. So the municipality never authorized, reviewed those things, decided those were the important interests. So that's a number one recommendation that we have in the tier 1A.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: That we think would help the tier 1A areas be bigger and more communities feel they can take on a tier 1A process.

[Ashley Bartley (Vice Chair)]: And hypothetically more consistent, right? Absolutely.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: And in service of the intent of Act twenty eighty one, which acknowledges in these areas where the municipal infrastructure can support density and growth and where the local regulatory standards are high, that the activity is not providing a value anymore.

[Marc Mihaly (Chair)]: Let me interrupt for just a minute. Miriam, have we heard from Joan? Do we know when she's showing up?

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: She'd be here in ten minutes.

[Marc Mihaly (Chair)]: Ten minutes. Okay. Alright. Go ahead, Tom.

[Thomas "Tom" Charlton (Member)]: Would it resolve the same issue if the existing projects covered under act two fifty were from some point forward understood to be regulated by the municipality. Now if you have a you have a project that came under act two fifty, it was built. And they wanna add to a building, it would it currently would still stay under active 50. They don't have that active 50.

[Marc Mihaly (Chair)]: It would be both.

[Thomas "Tom" Charlton (Member)]: It would be both. Okay. What if it was if if we made this a similar change and said any future development on that previously Act two fifty regulated parcel now has to meet the municipalities criteria only. If they're enforcing one set.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: So from the municipality perspective, that existing structure almost definitely has a comprehensive zoning permit issued by the municipality and would in any scenario be subject to a new local process for the future development or changes to the property. I think for the first half of your question, you'd have to ask more of an Act two fifty specialist. I don't know how permit conditions live or don't live in are typically managed or enforced. And so I don't know if I could answer in a sort of useful way. Good cop then. But I want to talk about the draft maps. Because remember, have three draft regional maps that create these FLUs, these future areas that could be exempt from Act two fifty or not. And then we also have the draft tier three map and a road rule model. I chose an example, I'm not picking on Pittsburgh, I'm not speculating about the future density goals or housing trajectory of Pittsburgh. I chose Pittsburgh because it's awesome. You should visit. That's a real picture from the town website. It's one of the most beautiful drives in the state, I think. You must have done it. And it had a lot of the characteristics that we think of as supporting housing growth in the future and making Pittsburgh able to leverage the opportunity of Act twenty eighty one. So they have municipal staff, including they have comprehensive planning and zoning and permanent bylaw. They have an existing designated village and they have a future eligible tier one area. They're a mid sized town by Vermont standards with over 3,000 people. And it's a large community, it's 44 square miles. And their map is available online, so I could show it to you. So this is a capture from the Rutland Regional Planning Commission's future land use map that is currently before the LERB for approval. And where you see the red asterisks, those are the colors on the map that could be eligible for Act two fifty exemption in the future if Pittsburgh chose to go for Tier 1A, which again, they have permanent zoning and they have water and sewer, although there are additional statutory requirements to meet the Tier 1A standard. So if I'm on the mouse, can you see that? Yes. Okay, so this is the general area that could in the future be Act two fifty exempt, where you have the existing village center is the darkest color in the middle. The planned growth area is around that. And then the total village area is the light pink. And then also this orange is marked as infill, transition or infill. So that's an existing residential area where the town and the Regional Planning Commission agree there could be a higher density of housing in the future. And then this grayish violet color is their enterprise area. So here we have the same land area from the Tier three map. I acknowledge this is in process. They're on draft two. We're expecting a draft three later this session. But currently in the draft or tier three rule, we're looking at mapped resources that would trigger new tier three jurisdiction and require the Act two fifty review or an Act two fifty permit. So the yellow, I've heard some people call this a fried egg, like these yellow fried eggs. That is something called a habitat connector, and that becomes mapped when you have forested area tree canopy on both sides of a road, and it's within a high priority connectivity block per Vermont conservation design. The green splotches are headwater. That's basically synonymous with very steep slopes that generate runoff that serve as headwaters. The red hash mark is sort of a placeholder. The LERB is calling this an exclusion area, but the idea is this is where tier one could be, which would not be subject to tier three jurisdiction. And then Pittsburgh also does have some of these significant natural communities. There's one up here and then there's actually one over here. So these are rare plant or animal species that A and R knows about, and these are mapped and would trigger Act two fifty review. Look at this right now, this is Sugar Hollow Road. We're going to zoom in on that in a minute. So this is a town road in the Northeast Corner of Pittsburgh. Now this models the road rule. So the road rule will take effect this summer per Act 181. The LERV has expressed that they plan to write guidance for the road rule, but the road rule is already statutorily created through Act 181. And it would require an Act two fifty review for construction, any construction more than 800 feet away from an existing road. So this isn't exactly the area of Pittsburgh that would be triggered, but it's pretty close because this is just showing you a buffer 800 feet off of existing mapped roads. So anywhere that's like a gray splotch would have to get an active 50 permit.

[Marc Mihaly (Chair)]: There's alright. It

[Thomas "Tom" Charlton (Member)]: hasn't been determined yet whether 800 feet is 800 lineal feet of measured from the road to the site or is it 800 feet of roadway, which if there's any slope could that could might have been a lot closer to the existing road. So the 800 foot buffer is that's showing the maximum amount of linear distance. Linear distance from the road. But if you have a slope and you have a 900 foot driveway, you still might only be 300 feet from the road, and that would possibly fall under the road rule as well. So they haven't sorted that out yet.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: And switchbacks or sort of a neighborhood grid design could trigger this. These are all questions that planning and zoning officials have raised. And hopefully there would be clarity in the guidance provided by the LERD before the rule takes effect. But you have identified a major area of concern for us, which is how is the road rule implemented actually at the local level? Because our local planning officials need to know the answers to those questions. Like what if it is technically, just as you described it, I won't repeat it, but

[Marc Mihaly (Chair)]: Just to let you know, what we're going to do is we're expecting Joan, Joan is in house commerce, We hope she'll be here around 10:10, so what I think we'll do is we'll go till ten, so you have another nine minutes.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: Awesome.

[Marc Mihaly (Chair)]: Okay? It's Makes sense. Get to your point, whatever it is, and then we'll take a break Okay. And then we'll proceed to Joan and Mara just go directly.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: Okay, we're on the cusp of the big point. It's on the next slide. Is everyone sort of tracking right now? We have the regional maps that are done with the municipalities and the RPCs that say this is rural general, this is conserved land, this is appropriate for future growth, could be active at the exempt. Then we have the tier three map created by the LERB, which is in a draft form, which maps resources that includes these habitat connectors, steep slopes, headwaters, precious natural resources and natural communities, actually what the law says. And then

[Thomas "Tom" Charlton (Member)]: we have the road rule.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: And the road rule exists in law. So here's what we see happening that we think is really not servicing Act 181 and may be a real barrier to our housing goals. So the Habitat Connectors only happen where there's a road that goes between forests. So the road rule applies Act two fifty, creates new Act two fifty jurisdictions inside of the forest block and seeks to encourage growth along existing roads and areas of development and where there are existing structures. Then in between the forest blocks, you trigger tier three through the habitat connector. And in the draft map, this includes a significant amount of state highway and class two town roads, including places where the state highway is mainstream.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: So essentially you have one incentive saying, hey, don't build into the forest far away from the road. We don't want long driveways to keep people in dense areas where we have infrastructure, we have roads that'll save the forest. Then you have their new tier three conditions that say, well, along the road, if it's got trees, you can't build there either. There's a weird

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: Wait, can't with an activity permit.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: You can with an activity permit every.

[Marc Mihaly (Chair)]: Yeah. Yeah.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: More than 200 square feet is gonna be the new condition. And so you really can't build anywhere without an act two fifty permit. And this road, there's other roads, there's houses that exist there. This isn't wilderness is our point. And so if you look at this on a grand scale of Vermont, and if we've acknowledged that only 2% or 3% of the entire state's gonna be in a tier one area, are we able to meet our housing goals and build what we want? We don't think so. We think there's a lot of towns that are going to be stuck with 10 parcels in their village center on Main Street that are the only ones that are going to benefit from Act 181. And we may in fact be in a place where the existing Act two fifty temporary exemptions we have now is bigger than what we end up with Act 181 full implementation. Therefore, our recommendations you'll see are where we get to how we think this should be addressed this session.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: If I could just also address what is development, because it's sort of the last final trigger. So these are the new areas where Act two fifty eight jurisdiction would be applied for the road rule or for tier three. But then I admit it took me a long time to understand this, and I followed it very closely for three years. Act 181 says the LERB will define development. The current draft rule says that development includes all of these things. So improvements to existing structures, so improvements to homes, as long as the construction, if the total area of construction is over 200 square feet. So if you're really in a garage over 200 square feet, where there's an existing home, an ADU over 200 square feet where there's an existing home, ACU would be triggered in this jurisdictional area and even active duty permit. New wastewater treatment, so septics and wells, although they exempt improvements or repairs to existing septics and wells in the draft rule. The construction of new homes and structures, commercial mixed use, residential, including single family homes. And I want to point out this is not sort of Act two fifty as usual, where it was the five-five-ten rule. So five units within

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: 10 units within five years, within five miles.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: Yep. So you could do one unit in ten years time, but if you're in this jurisdictional area, still need an Act two fifty permit. Roads, driveways and utilities, unless it's 50 feet off of an existing transportation facility, road or driveway sidewalk. And then trails, so that includes municipal trails, state trails and trails, the majority of our public trail network in Vermont are awesome. Really successful public trail network in Vermont is actually on private land. So trails more than 100 feet. So that is the type of development that would require an active duty permit in these areas that I showed you on the map. So I'll pause there.

[Marc Mihaly (Chair)]: Oh, I think what we really want to do is get to your recommendation.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: Yeah, that's okay. So our number one recommendation is to extend the current exemptions. Our next slide is things we've done over the last few years together that have worked really well. The existing exemptions have to be at the top of the We know they're producing housing, and we know they're producing housing in the places where we agree it should be built, which is in the dense areas of our communities and historic settlement areas. The second thing is just to delay implementation of the road rule and tier three so that local communities, the public property owners and the state regulators, the LERD, can better understand the impacts of the new jurisdictional area, ensure equity town to town, region to region, and sort of sort out the nitty gritty of how to actually administer permits both locally and for Act two fifty, such as the 800 foot linear question. And then lastly, we already covered this, to eliminate the requirement to enforce Act two fifty exemption in Tier 1A, which we think will help there be just more Tier 1A.

[Marc Mihaly (Chair)]: Is there any bill doing this?

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: I don't think it's been introduced or has a bill number, but there is a rural caucus bill that covers most of these. I exemption extension, I think think the extensions in that bill are shorter than what we're saying of 2020 and 2030, but it does address a number of our concerns. Yeah.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: And then, so what is working well, we're gonna be really quick on this. We just said that Act two fifty temporary exemptions, believe this is Peter Khan in He talked to me when I was housing commissioner about its goals in that area. He said every time I trigger Act two fifty, I want to build less houses and it costs me too much. Soon as it was exempt, he put this project up. It was immediate and he's doing that in these smart growth areas.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: He went from nine to 24. So nine units under the old 10 unit, five, five, 10 trigger to 24 under the new-

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: He was literally building nine unit neighborhoods to avoid Act two fifty for decades. And then as soon as it was exempt, he built more. It was better for everyone. Municipal planning grants, we talked about the goals to get your zoning ready, those municipal planning grants help very small communities in particular pay for that and make sure that happens. We hear from communities, they see units coming online from VHIP, that is a smart small dollar investment. I think one new element that could further take VHIP into the next decade and decades is allow it to be also used for preservation, affordable housing preservation. Right now it's got the ten years that can expire, maybe it's a different dollar amount, but have the program make that an eligible use to continue these affordable investments. It's gonna cost less when we do perpetual affordable housing in the traditional sense, that perpetual affordability only comes with ongoing investments. They invest in every twenty years because things wear down, things break In order to fix it and keep people housed at an affordable rate, they're not to borrow money or raise the rents.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: And safe energy efficient units, which is the other thing VHIP does that people love.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: Brownfields, talked about that. Obviously the districts are where we're seeing a lot of housing and then CHIP is brand new, we have a lot of guidance coming out, that needs to be reinforced.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: So we're going to talk about that Friday. Are

[Marc Mihaly (Chair)]: you appearing Friday? Yes. Great. Well, let's keep our questions short because we're going to take a break for our next one, but go ahead.

[Emilie Krasnow (Ranking Member)]: Are the recommendations that you're making, so are you representing your members right now or are you representing VLTP? When you make the recommendations, are they based on surveys or what are they based

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: Our members is the LCT, and they adopted these policies, these priorities.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: Okay, and

[Emilie Krasnow (Ranking Member)]: do you survey your members? Yes, every year. And so these are based on surveys?

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: The nuance here of each of these isn't based on a survey, but they're based on a very large policy setting process that has committees and then a full member vote, and then the board votes on the higher level priorities, which happened in October.

[Emilie Krasnow (Ranking Member)]: And do you have a weighted membership? Do you allow for more members from bigger towns or is it one member per town?

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: Every municipality in Vermont is a member

[Emilie Krasnow (Ranking Member)]: of BLCT, including villages. Every municipality has one member?

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: No, every municipality is a member. They pay a membership fee. They have access to all the services that BLCC provides. And we represent each of those municipalities. Every municipal official, whether they're an employee, elected or appointed, volunteer, paid staff, mayors, board members, member of legislative body, volunteer citizen commission members, planning commission, housing commission, zoning administrators. If you have a title as a municipal official, you are a member of VLCT. So we have over 8,000.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: When it comes to the voting that we vote on our municipal policies every two years, and so these exist within those policies, each municipality designates a assigned voting member at an annual meeting.

[Emilie Krasnow (Ranking Member)]: That's what I'm trying to get at. Thank you.

[Samantha Sheehan (Director of Municipal Policy and Advocacy, Vermont League of Cities and Towns)]: And our policies were unanimously voted on by all present voting members last year.

[Marc Mihaly (Chair)]: Okay, thank you. Great. Hey, thank you so much. This has been a really interesting hour of a century.

[Ashley Bartley (Vice Chair)]: Thank you for the time.

[Marc Mihaly (Chair)]: Thank you answering questions. We're going to take a break. Please come back here before 10:15.

[Emilie Krasnow (Ranking Member)]: And then we have

[Marc Mihaly (Chair)]: Joan Goldstein, then we can go right in before she gets here at 10:30.