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NO. 62. AN ACT TO STIMULATE THE DEVELOPMENT OF AFFORDABLE HOUSING.

(H.483)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. PURPOSE

(a) Vermont is experiencing an extreme shortage of housing for both rental and purchase. Failure to address this shortage will stunt the state’s economic growth and curtail the creation of new jobs. The housing shortage has regional, as well as local, impacts. Therefore, all of Vermont’s cities and towns must work together to create additional housing through renovation and new construction in municipalities throughout the state.

(b) Much of Vermont’s housing stock is old and is in need of capital investment to bring it into compliance with contemporary health and safety standards. By developing new approaches and adapting existing state programs that provide technical and financial support, Vermont can retain and rehabilitate its housing stock and make it habitable and safe. This effort will also help to decrease the record number of deadly fires that has put Vermont first in the nation in residential fire deaths.

(c) Vermont’s housing shortage affects families of all income levels. Despite recent economic prosperity, many low and middle income Vermonters, even those who are employed, cannot find housing of any kind. Many families in which two adults are employed may still have insufficient income to pay for decent housing or, in some cases, any housing.

Sec. 2. STUDY COMMISSION; MUNICIPAL AND REGIONAL

PLANNING AND DEVELOPMENT ACT

(a) The municipal planning review commission is created. The commission, with the administrative support of the Department of Housing and Community Affairs, shall review 24 V.S.A. chapter 117, subchapters six through nine, the regulatory component of the municipal and regional planning and development act, and recommend changes designed to encourage and promote responsible development of affordable housing throughout Vermont. The municipal planning review commission shall be composed of 11 members who shall represent a balance of interests and represent different geographic areas of the state. The commission shall include: the Commissioner of Housing and Community Affairs, or the commissioner’s designee, who shall be the chair, the Secretary of Natural Resources, or the secretary’s designee, and nine members to be appointed by the governor. The members to be appointed by the governor shall include: a representative of the regional planning commissions; two representatives from the development and real estate community, one from a nonprofit organization and one from a for-profit organization; an individual with experience and expertise in natural resources management; an individual with experience and expertise in Act 250; an individual with experience and expertise in municipal and zoning law; a municipal zoning or planning official; a land use planner experienced in smart growth concepts; and a representative from the Vermont League of Cities and Towns.

(b) The commission shall review 24 V.S.A. chapter 117, subchapters six through nine, with the purpose of reviewing the law and proposing amendments designed to motivate and facilitate the development and appropriate distribution of affordable housing throughout Vermont without sacrificing the law’s original intent, which was to assure responsible municipal control of land use. At a minimum, the commission shall consider the following:

(1) Approaches that will increase flexibility in the management of land development and conservation to meet state land use goals, with the focus on development of affordable housing.

(2) Methods to improve the efficiency and effectiveness of the municipal regulatory process, including reconciliation of the municipal planning law with Act 250, the alignment of local zoning ordinances with municipal plans, and the frequency of zoning ordinance updates to assure consistency between those ordinances and regional and municipal plans.

(3) Advisability of implementing a state review of any local decision that denied or limited affordable housing development, or a comprehensive permit review process for affordable housing.

(4) Methods to improve the coordination between the state and local permit review processes in order to eliminate redundancy and reduce the time and expense involved in developing affordable housing.

(5) Strategies to increase the efficiency of the environmental court in deciding appeals from local permitting decisions, including an analysis of resource and personnel needs, the scope of the definition of "interested party," expedited appeals for affordable housing projects, and other procedural approaches.

(6) Methods to encourage municipalities to adopt inclusionary zoning practices and establish minimum housing density standards.

(c) On or before January 15, 2002, the commission shall issue a written report to the General Assembly in which the commission outlines the procedures and techniques used in its study, its conclusions, recommendations, proposed revisions, and the rationale for each.

Sec. 3. AGENCY OF COMMERCE AND COMMUNITY DEVELOPMENT; REGIONAL AND MUNICIPAL PLANNING; TRAINING; HOUSING AND ECONOMIC DEVELOPMENT GUIDELINES

(a) The Secretary of Commerce and Community Development, in cooperation with the 12 regional planning commissions, shall design and implement a program that provides regular training to members of municipal planning and zoning commissions and development review boards, and provides support and incentives to those commissions and boards to encourage longer and more effective service by their members. At a minimum, the training program shall be designed to:

(1) Encourage the formation of municipal development review boards.

(2) Increase awareness of the importance of affordable housing to each community, emphasizing that regional and municipal plans require a housing component, and that the federal Fair Housing Law also requires recipients of community development block grants to affirmatively promote affordable housing development within their municipality.

(3) Promote more effective use of planning tools to stimulate affordable housing development within their communities.

(4) Promote application of smart growth concepts and increase certainty, speed and efficiency in the local permitting process.

(b) This program shall be implemented no later than November 15, 2001. The agency shall submit a written report to the General Assembly on or before March 1, 2002, describing the design, implementation, substance and success of the program to date.

(c) The secretary shall review guidelines and criteria within the agency, particularly in regard to the Vermont Economic Progress Council, and propose changes that will link economic and job growth with housing development and availability, particularly affordable housing. The secretary shall issue a written report no later than October 1, 2001, that outlines appropriate guideline changes and recommends legislation that would increase the interface between housing and economic growth.

Sec. 4. DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS; AFFORDABLE HOUSING; DEVELOPMENT INCENTIVES; VERMONT HOUSING BUDGET; HOUSING INVESTMENT PLAN

The commissioner of housing and community affairs shall:

(1) Compile a list of discretionary loans, grants and other funding over which the Agency of Natural Resources, the Department of Labor and Industry and the Department of Transportation, or any other state entity, has discretion or control, and for which the addition or adaptation of criteria would create incentives for communities and developers to build more affordable housing. On or before November 15, 2001, the commissioner shall submit to the General Assembly a written report outlining recommendations for program or criteria changes that will provide incentives for affordable housing development.

(2) Create a Vermont housing budget designed to assure efficient expenditure of state funds appropriated for housing development, to encourage and enhance cooperation among housing organizations, to eliminate overlap and redundancy in housing development efforts, and to ensure appropriate geographic distribution of housing funds. The Vermont housing budget shall include any state funds of $50,000.00 or more awarded or appropriated for housing. The Vermont housing budget and appropriation recommendations shall be submitted to the General Assembly annually on or before January 15, and shall include the amounts and purposes of funds appropriated for or awarded to the following:

(A) The Vermont Housing and Conservation Trust Fund.

(B) The Agency of Human Services.

(C) The Agency of Commerce and Community Development.

(D) Any other entity that fits the funding criteria.

(3) Annually, develop a Vermont housing investment plan in consultation with the Vermont housing council. The housing investment plan shall be consistent with the Vermont consolidated plan for housing, in order to coordinate the investment of state, federal and other resources, such as state appropriations, tax credits, rental assistance and mortgage revenue bonds, to increase the availability and improve the quality of Vermont’s housing stock. The housing investment plan shall be submitted to the General Assembly, annually on January 15, and shall:

(A) target investments at single-family housing, mobile homes, multifamily housing and housing for homeless persons and people with special needs;

(B) recommend approaches that maximize the use of available state and federal resources;

(C) identify areas of the state that face the greatest housing shortages; and

(D) recommend strategies to improve coordination among state, local and regional offices in order to remedy identified housing shortages.

Sec. 5. Sec. 10a of No. 103 of the 1997 Adjourned Session is amended to read:

Sec. 10a. SUNSET OF JOINT HOUSING COMMITTEE

Chapter 21 of 2 V.S.A. (Joint Housing Committee) shall sunset on *[July 1, 2001]* July 1, 2005.

Sec. 6. TASK FORCE ON REDEVELOPMENT OF UPPER STORIES OF DOWNTOWN BUILDINGS; NEW TOWN CENTER DEVELOPMENT INCENTIVES; REGULATORY REFORM

(a) The commissioner of housing and community affairs and the commissioner of labor and industry shall establish a task force composed of 15 members to consider and recommend statutory, regulatory and policy reforms and other incentives that would:

(1) Promote redevelopment of the second and third floors of older and historic buildings in municipal centers.

(2) Encourage development of housing and mixed-uses in town and village centers, downtowns and new town centers.

(b) In addition to the two commissioners, or their designees, the task force shall include two representatives, appointed by the speaker, and two senators who are members of the joint housing committee, appointed by the committee on committees, the state historic preservation officer, and eight additional members to be appointed by the secretary of commerce and community development to include a business owner, a developer of older and historic buildings, an architect, a fire safety official, a land use planner, a municipal government official, a local downtown program manager, and a person with extensive knowledge of the Vermont law regarding accessibility standards for public buildings and parking and the Americans with Disabilities Act (ADA). The legislative members of the task force shall be entitled to compensation and expenses as provided in 2 V.S.A. § 406.

(c) The task force shall report to the general assembly on or before January 1, 2002 their recommendations for incentives, including statutory, administrative and policy changes that would permit and encourage the redevelopment of second and third stories in historic downtown buildings and housing and mixed-use development in municipal centers.

Sec. 7. 32 V.S.A. § 5930u(g) is amended to read:

(g) In any calendar year the state board shall not award a total amount of tax credits to all applicants under this subchapter in excess of *[$100,000.00 ]*$150,000.00.

Approved: June 16, 2001