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[Marc Mihaly (Chair)]: Thank you, welcome everybody to the House Committee on Temple of Housing, and today, believe it or not, is 05/27/2020 '6, and this committee as part of the House is still, believe it or not, in session. What we are considering this morning is 28, just for context, S three twenty eight has become kind of the omnibus housing vehicle. It has all of the housing provisions that the Senate and the House have mostly agreed on, that our committee has had in it, and it has come back from the Senate. We received it from the Senate, we added things into it, we sent it back to the Senate, the Senate concurred with instances of amendment. Three or four of those instances relate to land use, and we have our land use council and zoning council here with us now to take us through those sections. Cameron Wood, our counsel on the housing sections, is at the moment on the floor with, guess what, 8,772. Wow. So, the Senate floor, and so he's not with us right now. When he's available, we'll let you know, perhaps we'll hear from him this afternoon between sessions, we'll just have to see. If he walks in the door sooner than that, we'll keep going. So, with that, Ellen, welcome back. Take Ellen it
[Ellen Czajkowski (Office of Legislative Counsel)]: Chittendenkowsky, Office of Legislative Counsel. So, today you are looking at draft 3.1 of what was Senate proposal of amendment, but it was a floor amendment from the whole Senate Economic Development Committee on S-three 28. So probably about half of this document is provisions related to land use. So, first I'm gonna talk about the fifth instance of amendment, which at the top, start at the top of page two. When they received S-three eight or S-three 28 had this language in it in section nine, but they've added some additional language. So, first on page two, section nine is 24 BSA 4,412. This is the required provisions and prohibited effects for municipal zoning. The language in subdivision B on page two should look very familiar to you. It has appeared in most of your bills. Think it's regarding allowing manufactured, defabricated modular and mobile homes in any zoning district that allows your own residential development.
[Marc Mihaly (Chair)]: Ellen, just a technical question. When, let's say this should become law, let's say it did, and let's say S by becomes seven fifty law, and then the session is over. Do you guys, as part of your work in the summer, do you guys conform everything and amend the code and all that kind of stuff and deal with these kind of situations? How does
[Unidentified Committee Member]: that work? If it's the exact same language,
[Ellen Czajkowski (Office of Legislative Counsel)]: in both bills? If it's the exact same language, it layers on top, and it's fine. Okay, and if it's slightly different? And if it's not, the bill that is passed later in times is what is enacted. That's interesting. Live and learn. So, yes, you will recall it. So what happened earlier this year, actually, H-nine 40 was the miscellaneous energy bill, and it had an update to the energy planning municipal zoning statute that was also being worked on in S-three 25, the Act two fifty and zoning bill. And so I had to ask very nicely for them to put it into s three twenty five, or it would have been overwritten over overwritten and overwritten by the bill passed later in time. And I don't think all of you wanted that since you passed the bill first.
[Marc Mihaly (Chair)]: Is it passed in both houses later in time? It's enacted into law. Enacted into law, signed by
[Ellen Czajkowski (Office of Legislative Counsel)]: the government. Yes. Okay.
[Marc Mihaly (Chair)]: Sorry to interrupt, but I did learn something.
[Ellen Czajkowski (Office of Legislative Counsel)]: It's a fun thing to keep in the back of your mind if you're ever trying something at the end of the session. You can like I've seen one more game. Okay, we'll slip it the budget because that's always the last thing signed.
[Marc Mihaly (Chair)]: Let's see this here. Right? Okay.
[Ellen Czajkowski (Office of Legislative Counsel)]: Okay. So the other things that are in here, there's some new language in here. So page two into page three, this is about duplexes for first change. So first, at the top of page three, in any district that allows year round development, duplexes shall be a permitted use. You have talked about this before as well. I do think you'll pass this out going from an allowed use to a permitted use.
[Marc Mihaly (Chair)]: Does everybody remember the Yeah.
[Ellen Czajkowski (Office of Legislative Counsel)]: Still on page three, at the end of this paragraph, this is the provision about multi units with up to four units. So, in any district that is served by municipal sewer and water infrastructure, I'm on line five to six here, that allows residential development, multiunit dwellings with four or fewer units shall be a permitted use on the same size lot as a single family dwelling. There's also this language that says unless that district specifically requires multiunit structures to have more than four dwellings. And so, this language is being struck so that in these districts, towns have to allow multi units with up to four dwelling units. But
[Marc Mihaly (Chair)]: what if a town has zoning, I know that there's another section that then becomes law later, whatever, just to be clear, let's say a town, probably one of the bigger towns, the bigger cities, has a place where they have a minimum size of six units. I don't know if it has that happened anywhere? Yes. Okay. Have a minimum size of six units. They still can do that. They if this strikeout happened, they it doesn't invalidate that zone. Right?
[Ellen Czajkowski (Office of Legislative Counsel)]: It may. Striking out this language would require that a town in those districts allow multi units with four or fewer units. So if their zoning was structured to say nothing can be built here unless it's a multi unit with more than six units, that would be invalidated. If it was any number of multi units, it could be 12, this area would not be invalidated.
[Marc Mihaly (Chair)]: Are there towns that have minimums above four units?
[Ellen Czajkowski (Office of Legislative Counsel)]: Yes, there are a few. A few. Yes. That is why this provision appears in the next section with a sunset provision. So this provision is being struck temporarily because in the next section it has a sunset on this. And so there's a sunset being added of 01/01/2028, I think, to be potentially further discussed next year.
[Marc Mihaly (Chair)]: Okay, go ahead. I'm not sure I understand that, but you're going to explain it. Right. This section is section nine. Yes. And it has, it's effective July 1 this year. Yes. Okay. All right.
[Ellen Czajkowski (Office of Legislative Counsel)]: That language will be removed from the statute and towns will have to allow in these districts multi units with up to four units. Starting 01/01/2028, if the legislature takes no further action, this language that's being struck will be reinstated, saying that towns could allow or could require that that district have only structures with more than four units. So if I'm a
[Unidentified Committee Member]: town Why would I want to
[Marc Mihaly (Chair)]: do this? I'm going to ask you why the hell would anyone want to do this, but to clarify, if I'm a town somewhere in the state that has a minimum number of buildings and units of say six, for one year my zoning is illegal, then it becomes legal again.
[Unidentified Committee Member]: It's not just legislature act. Is it basically a way to maximize the use of this public infrastructure? Like we don't want somebody to just build a minimum number of housing when we've invested all this public interest money or Do somebody has invested into building sewer and
[Marc Mihaly (Chair)]: you know what I would be the
[Ellen Czajkowski (Office of Legislative Counsel)]: am not then involved in much of the testimony. I can only relay some information, what I have heard. I think there are arguments on both sides because towns have very different setups in their bylaws. I think a reason why you would want to do this is if a town had set a very high number of minimum units, and so the property is not being built because they can't find a developer for 20 or more units on that property and not allowing smaller infill development. Perhaps what you were saying is also true. Maybe they want to maximize and have larger unit development there. There's a lot of variation across towns, but there, I think, have been concerned raised that towns are basically This is a way to get out of the requirement for small infill development in some areas by making it very difficult to develop there. So,
[Marc Mihaly (Chair)]: if I was a town that had a minimum of six units, and I happen to pay attention to what the legislature did by some small chance, I could just add the words up to. Yes. And then it would be legal, and then I could take them out in a year if I wanted to.
[Ellen Czajkowski (Office of Legislative Counsel)]: Yes. Whether the zoning is legal or not, I don't think is really an issue, because whether or not a town updates its zoning to reflect this, developers will still be allowed to apply under what's legal under the statute. So it's not gonna invalidate their whole zoning as opposed to just allow people to develop to this
[Marc Mihaly (Chair)]: smaller lots. Got it. Any questions so far on this piece of wonderful?
[Unidentified Committee Member]: Yeah, I want to go over to that real quick because I skipped over and said yes to the difference between permitted, but I remember we were having a conversation about what permitted meant, what definition did folks land
[Unidentified Committee Member]: on? No definition.
[Unidentified Committee Member]: Okay. So, in this sense,
[Ellen Czajkowski (Office of Legislative Counsel)]: permitted means? Whatever it means in a town zoning currently. Okay.
[Marc Mihaly (Chair)]: Yeah, so usually what it would mean is, let's say I'm a developer, and I wanted to build a duplex on a lot, in a zone that was an R1 zone, residential single family. If I wanted to build a regular old single family house, I wouldn't need to go and get a zoning administrator or some permit like that. I'd usually in most towns walk in the door to get a building permit. You know, I'd have to comply with whatever their building permit code was or whatever. That's all, because in most residential zones, a single family house is a permitted use. There's no discretion on anybody. There's just some building permit person at the counter who checks off, did you do everything that you had to do for a building permit? What this does is to make it the same for duplexes. Yes, I just wanted to make sure I was clear on that. Tom, do you feel I have said this correctly? That's wow, I understand it. My decision is correct, but that's how I understand it. Which in a way is cementing This was out of the Home Act. What this is doing without opining on it, it's sort of completing If the Home Act wanted to make it equally easy to build duplexes as single family houses. This kind of completes that, because if it's an allowed use, which is the law as it is now, a town could say no. Any of the use that's allowed doesn't mean it's approved. Permitted use is much harder to say no. They could still have a section that says that the design review board has to make sure that they approve the color and it has to be one of the following seven colors or something like that.
[Unidentified Committee Member]: Does this also, the towns that have like this 10 acre rule. Lot size? Yeah, lot size. How does that, does this play into that at all or no?
[Ellen Czajkowski (Office of Legislative Counsel)]: So the rest of that sentence does go on to say that duplexes have to meet the same requirements for single families. And so there can't be additional land or lot size required, but they can have it match their single family or single unit lot sizes. So if in a town there is a required minimum of 10 acres to build a single unit dwelling, they must apply that also to duplexes. So
[Unidentified Committee Member]: in your opinion, isn't striking out that last sentence going to enable more housing or less housing to be built? Just language wise, are we limiting or expanding allowed development?
[Ellen Czajkowski (Office of Legislative Counsel)]: I am not a practitioner of zoning or development. I think there has been testimony on both sides.
[Marc Mihaly (Chair)]: It depends on the ordinance. If it's an ordinance, no, it would depend on the situation. So, for example, I want to just say, therefore, I can't answer you. I can think of a couple of different alternatives. If it's a town that says, oh, you've to build 20 units or more on this lot, And nobody's building, nothing's happening, and someone wants to go and build four, and they can't. Well, under this, they could. And so at least you get four units before you were getting nothing.
[Unidentified Committee Member]: The other hand, a neighbor doesn't want 20 units built, they're going to go to this say no, you can only
[Marc Mihaly (Chair)]: build four. If someone comes in with a 20 unit project, this would allow them for a year to say no. Unless the town just amended their ordinance to say up to 20 units. But
[Unidentified Committee Member]: I think it also frees up some of the stuff, the restriction that I was thinking about specifically, when we heard the testimony about, we passed this for more housing to be built, but they were single family homes. And so, in essence, this would allow more multi unit homes, but not excessive, right? So it's not going to be 20 units, but more than a single family unit. Yeah, I just don't get why we would legislate that if like the
[Ellen Czajkowski (Office of Legislative Counsel)]: It's weird. Yeah, it is, it is, it's It's weird that it
[Marc Mihaly (Chair)]: says there for a year. Yeah.
[Ellen Czajkowski (Office of Legislative Counsel)]: It
[Marc Mihaly (Chair)]: might be that there's some development that somebody's got in mind, I don't know.
[Ellen Czajkowski (Office of Legislative Counsel)]: Sorry, it's there for a year because requires the legislature to come back and discuss it.
[Marc Mihaly (Chair)]: Well, does it require that?
[Ellen Czajkowski (Office of Legislative Counsel)]: Well, it's not a set. But people will. I mean, I think that it's often a function a sunset. This was a compromised position.
[Marc Mihaly (Chair)]: Yeah. I see. So it's it's there for a year. Okay. You want to take us further? Sure.
[Ellen Czajkowski (Office of Legislative Counsel)]: Next, so these next two provisions, don't think you have heard of before. They only came about in the last week. So on page three, subdivision E is amending the requirements for dwelling units. And so currently in statute, municipalities are required to not exclude one accessory dwelling unit from a property so long as it is. There's a size limitation, but it does currently require that it be on an owner occupied lot, meaning the ADU can be where the owner lives or the owner can live in the larger unit. So this provision is striking that it be an owner occupied lot, meaning the owner will not be required to live there.
[Marc Mihaly (Chair)]: So for example, someone could have an ADU on a vacation home. Someone could have an ADU on a short term rental. But I do want to summarize prior testimony. ADUs are unfortunately not being, they're not being utilized much, because they're expensive, difficult and often require amendments and changes, physically expensive changes to septic systems. Personally, despite the legal impact of this, I'm just not sure it's going to have much physical impact. Yes?
[Unidentified Committee Member]: I just want to try to understand, so if someone has a home and it's a vacation home, but they have an ADU, they They want an ADU. They want an ADU. If they, they could rent that out full time, but they wouldn't be able to rent out short term if it's a vacation home.
[Marc Mihaly (Chair)]: No, no. This isn't about short term rentals.
[Ellen Czajkowski (Office of Legislative Counsel)]: Well, it's about any type of rental though, regardless of short term or long term. Yes, it needs to be a residence as opposed to a short term or long term rental. And the
[Unidentified Committee Member]: owner could occupy the ADU, now the property is occupied.
[Marc Mihaly (Chair)]: Yeah, they could.
[Unidentified Committee Member]: So it could open up a primary relocation for somebody who doesn't want to live here, but knows that they can do better renting out the whole house and they don't
[Unidentified Committee Member]: mind living in the ADU, it will help them pay it off and
[Ellen Czajkowski (Office of Legislative Counsel)]: then they can move in
[Unidentified Committee Member]: if they wanted to eventually.
[Marc Mihaly (Chair)]: Right, I think they're actually, now that I think of it, I guess I want your comment, but I think this is the case. A lot of people I know who are aging, what they are doing is building a smaller house on their lot and giving their house to their kids, who are not owners, their kids are not owners, but they are, and they live in the ADU, a kid can make it do this under this.
[Ellen Czajkowski (Office of Legislative Counsel)]: But this is not So actually, that was allowed under the prior amendment, which I think happened in the Home Act. So previously, the language did say that the owner had to live in the larger structure and that the ADU did not have to. But in the Home Act, you changed it to owner occupied lot, allowing for the owner to live in the smaller unit. But this is getting rid of any ownership requirement, both units can be rented. I would just say another piece of information is that VHIP can be used for the construction of accessory dwelling units. That program requires owner occupancy of one of the structures. And so that was sort of why Southern Economic Development thought that striking it from the bylaw requirement would mean that at least some of the units would still have owner occupancy requirements and wouldn't just become full time rental. Okay. Yes. So
[Unidentified Committee Member]: with VHIP, the ADUs do not have to be within the same building? Correct.
[Marc Mihaly (Chair)]: Do they
[Unidentified Committee Member]: currently do when we're changing that?
[Ellen Czajkowski (Office of Legislative Counsel)]: Correct. The definition of an ADU is that it can either be located within or pertinent to, so on the property, so over the garage or
[Unidentified Committee Member]: Okay, but it doesn't have to be attached, does it have to
[Ellen Czajkowski (Office of Legislative Counsel)]: be attached to the structure, fixed to the structure?
[Unidentified Committee Member]: No. Okay, thank you. And then one more question about ADUs while we're talking about them. Does any of this cover manufactured ADUs or would those be considered different? I know when we looked at the manufactured homes, they also make ADUs and so that are smaller. So, it's not a single wide, it's not a double wide, they're smaller one bedroom units. Would that be considered an ADU or is there building requirements?
[Ellen Czajkowski (Office of Legislative Counsel)]: Under the rest of this paragraph, they're subject to the same review as a regular or a conventional unit. And so, I think depending on what the municipality already says. And so I think they could be.
[Unidentified Committee Member]: So just to be absolutely clear, this actually allows for the possibility of one short term rental becoming two short term rentals.
[Marc Mihaly (Chair)]: Is that right? Yes. Or one rental becoming two rentals.
[Ellen Czajkowski (Office of Legislative Counsel)]: Full time, short term rentals because I don't know, sometimes people go out in Burlington though. And there's different town requirements. So there's a little bit more language related to this. This is one of the last pieces at the top of page four. Subdivision 15 is being added. No bylaw shall require a duplex to be constructed on an owner occupied lot. So again, this is a municipality cannot require in their bylaws that duplexes be on owner occupied lots. And so there's some similarity here with the ADU language, but a two unit dwelling, the municipality cannot require it to be owner occupied.
[Marc Mihaly (Chair)]: They can permit it, they can't require it.
[Unidentified Committee Member]: Yes. So
[Ellen Czajkowski (Office of Legislative Counsel)]: this is the other provision that is in the next section, 9A, that has a sunset.
[Marc Mihaly (Chair)]: 9A, everybody, as you will see at the very end of this, instead of expiring, instead of becoming effective 07/01/2026, becomes effective 01/01/2020 Yes.
[Ellen Czajkowski (Office of Legislative Counsel)]: So there's a couple different ways to draft sunsets, or perspective repeals is what they're called usually, but this is a different format maybe than you have seen before, but in the sixth instance of amendment, section 9A is again 4,412. It would be putting back in the language at the bottom of page four that is being struck on the prior page, and it would also be repealing subsection 15 should the legislature take no other action next session.
[Unidentified Committee Member]: We call that a sunrise provisions.
[Ellen Czajkowski (Office of Legislative Counsel)]: So sunrising is what is what's happening in 03/25. Think it's really easy
[Marc Mihaly (Chair)]: do a sunrise.
[Ellen Czajkowski (Office of Legislative Counsel)]: Yay. This isn't a sunrise because it's repealing something. It's sort of is a very awkward Repealing it in two years though is a perspective repeal. Yeah. All right.
[Marc Mihaly (Chair)]: So, I
[Ellen Czajkowski (Office of Legislative Counsel)]: think the Senate's intent on this was a compromise because these two provisions were very passionately argued about. And so allowing them to take effect for one year allows the legislature to come back next year and discuss if any additional changes are needed or if they're fine. Okay. But we don't know who is arguing. I mean, think it's clear on YouTube, the players, right? I mean, Senator Rum Hinsdale, Senator Clarkson, Senator Watson, I think there are other members of the Senate, but this is about four units versus other members of the Senate Economic Development Committee, also Senate National Resources went back and forth on this language. The Seventh Intent of Amendment is my last piece. I think you may have seen this language before. I'm sorry, I'm getting very confused by all of the things
[Marc Mihaly (Chair)]: we Actually, we only saw it briefly, because what we did was cut this out and sent it over to House environment, which considered, I think took testimony on it, but did not include it in three twenty five, and whether they just didn't get to it or had feelings about it, I'm not sure.
[Ellen Czajkowski (Office of Legislative Counsel)]: Yeah, so section 9B is amending 24 VSA 5,803. This is part of the State Community Investment Program, the successor program to the designated area program. Under the designated area program, the sort of main designations were downtowns, village centers, and new town centers. The new town center designation was created because there was this category of towns that couldn't meet the threshold requirement of the other categories, which were that they had to be historic in nature and eligible for listing, and that requires 50 years old or more.
[Marc Mihaly (Chair)]: So the downtown and village centers, under the current law, have to be historic. There is another designation, what's it called? Newtown Centre. Newtown Centre, that has similar effects, but doesn't have to be historic. Correct. Okay.
[Ellen Czajkowski (Office of Legislative Counsel)]: We're currently in the process of transitioning to the new program, the Community Investment Program, and in the initial language, it says that all three of those designations would be eligible for the benefits of the new program. However, on page six of your amendment, it does show that currently those requirements to be listed or eligible for listing on the National Register of Historic Places is part of the new program. That leads out new town centers. This is proposing to add language that says, unless recognized as a pre existing designated new town center, that would give those towns access to the incentives under step two and step three of that program.
[Marc Mihaly (Chair)]: Before we go on, Emilie, you have your hand up. I'm sorry, I didn't see it.
[Emilie Krasnow (Ranking Member)]: That's fine. It wasn't up for very long. Basically, I just wanted to say that I really This is why I really don't like legislation by amendments because I haven't really had time to check-in with my community, see, you know, review everything. It's just continues to be problematic. But I guess two of the senators on that committee represent my community. So if, you know But I just I still continue to struggle with this, like just not having enough knowledge and time to be transparent with my community, but that's kind of my just thoughts in general.
[Marc Mihaly (Chair)]: Thank you. I would like it if I'm still not sure I fully understand. If you go back over this, under the existing law.
[Ellen Czajkowski (Office of Legislative Counsel)]: For the State Community Investment Program? Yeah.
[Marc Mihaly (Chair)]: The state can tell us about that program and how it works in step one, step two, step three, etcetera.
[Ellen Czajkowski (Office of Legislative Counsel)]: Sure. So previously, there were under the designated area, five designated areas. Now, under the Community Investment Program, there are two types of designated areas, the main one being downtown center or village center. But then within that, there are three steps: step one, step two, and step three. If you look Wait, at the
[Marc Mihaly (Chair)]: downtown and village, but not new town.
[Ellen Czajkowski (Office of Legislative Counsel)]: The requirements for this center includes new town centers. It includes areas that were both previously designated under the prior program. It also potentially expands it to allow other towns that have not previously had access to these designated areas. There are a list of requirements in the statute, and that's why this sort of step system was created that based on the number of requirements you meet, you land on a different step, each one having increasing access to additional benefits and incentives. So step one is the most basic. Most towns will be eligible for it so long as they have a plan and a planning process. It does not require zoning. But step two and step three have additional requirements, including in the statute that a portion of the center be listed or eligible for listing on the National Register of Historic Places. But that brings back the issue that there are a number of towns that are not historic. They were, however, some of only three of them or four of them were previously designated as new town centres, meaning they weren't at least 50 years old. The amendments in this section would allow those previously designated new town centers to qualify for incentives under step two and step three of this program. There is a caveat on that, which is addressed somewhat in S-three 25. One of the main incentives, though there are actually, I think, more than 10 other incentives. It's a long list of incentives. They're money incentives and And scoping and priority for grants, access to a couple of the grant programs. One of them is the Downtown and Village Center Tax Credit Program. New town centers do not have access to that program because the program itself requires listing on the National Register of Historic Places and buildings that meet the age requirement.
[Marc Mihaly (Chair)]: They're historic tax. There's a form of historic tax credit.
[Ellen Czajkowski (Office of Legislative Counsel)]: So, adding them to this bill here will give them access to the other incentives on step two and step three. But not the historic, yes. This
[Marc Mihaly (Chair)]: is sort of like the federal historic tax credit, have to be historic, yeah, right. And the step three is the same, they've done the same thing. Yes. And they have conforming language, a portion of the center, which was the conforming part. Yes. Questions by the committee. So this, essentially, this last one, allows Newtown centers access to the benefits of the designation program except for the historic tax credits.
[Ellen Czajkowski (Office of Legislative Counsel)]: Yes.
[Marc Mihaly (Chair)]: And those benefits, you want to tell us a little more about those benefits?
[Ellen Czajkowski (Office of Legislative Counsel)]: Sure, I didn't bring that list with me, but the Better Place So, there's a few of the different grant programs, like the Better Places programs, Better Connections programs. There is a cap on the fee for wastewater permits. There's a cap on the fee for something else. There's exclusion from the land gains tax. So there's a couple, and then priority in the funding consideration under a couple other grant programs. So it ranges between actual access to incentives to priority, as well as there's a couple of statutory ones, including there's the one related to can appeal on a character of the area. That's for designated areas.
[Marc Mihaly (Chair)]: So if anything, to the extent one is in favor of building more in these designated centers, regardless of whatever they are, this slightly liberalizes and allows more incentives to be present in these centers.
[Ellen Czajkowski (Office of Legislative Counsel)]: It's the state investment, community investment program, so we have access to these investments for that area.
[Marc Mihaly (Chair)]: Members of the committee, any further questions of our esteemed counsel? Ellen, thank you so much for taking time, this has been really helpful and educational and I'm glad to learn about the later in time rule, which I think we will refer to from here on out as the Chikowsky Way. Thank you. Members, it turns out that 772 is still on the floor, So Cameron Wood has been rescheduled for our afternoon break, which will, you know, whenever it is. And that's it. Is there any further Please stay glued to your phone, it's going to be like this, and it's going to be this way with 772 as well. Who knows, it's just, this is end of session stuff.
[Unidentified Committee Member]: Yes. We don't have to vote on that amendment to a straw poll? Amendment?
[Marc Mihaly (Chair)]: Not yet, 03/28. We will. We'll do a we're just not ready yet. We haven't heard from Cameron on all the other amendments, and also I committed that we would not do a straw straw poll until we had at least attempted to reach an understanding with the leadership of the spirens, which is important. Okay. All right, thank you everybody, and we are now going to adjourn until mid afternoon. Is that all right? Any last words before we go offline? Thank you everybody.