View the complete text of this act
ACT SUMMARY 2007-2008

SUMMARY OF THE 2008 ACTS AND RESOLVES View the complete text of this act

ACT NO. 176


Vermont neighborhoods; Act 250; taxation

This act establishes a designated Vermont neighborhood program, as part of the downtown chapter. In order to qualify, a municipality must demonstrate that it has an approved plan, a confirmed planning process, zoning bylaws, and subdivision regulations. A designated area may be located in a designated downtown, village center, new town center, or growth center. It also may be outside but contiguous to a designated downtown (being no greater than 100 percent of the size of the downtown), a designated village center (no greater than 50 percent of the size of the village center), or a new town center (no greater than 75 percent of the size of the new town center). A successful application must also contain substantially all the following: any contiguous land must complement an existing designated entity by integrating housing units with existing neighborhoods, facilities, and transportation networks, and must be consistent with smart growth principles; it must be served by municipal sewer or an approved community or alternative waste system; it must have minimum residential densities of no fewer than four units of detached single-family dwellings per acre or higher densities of multi-family housing; it must incorporate design that promotes pedestrian-oriented development patterns and networks of paths for pedestrians and bicycles.

The act establishes a designation process which includes per se approval for an application entirely within a designated downtown, village center, new town center, or growth center. If an application is from a municipality that lacks a designated growth center and proposes to create a Vermont neighborhood outside but contiguous to a designated downtown, new town center, or village center, the designation decision will be made by the expanded downtown board, after opportunity for public comment, within 45 days of submission of a completed application. A positive designation decision shall include a determination that the applicant has demonstrated compliance with the requirements, which includes the fact that residents hold a right to utilize household energy-conserving devices. A designation decision shall not be subject to appeal.

Incentives include: a $50.00 cap on certain agency of natural resources wastewater application fees, not applicable in case of delegated programs; a 50 percent reduction in Act 250 fees; and no land gains tax on the first transfer of each parcel following the original designation. Designation shall last for five years and shall be renewed concurrently with the underlying designation. If a successful applicant becomes out of compliance, the board may require corrective action, the removal of designation, and the prospective limiting of benefits.

The act increases to 170 acres the maximum size of a new town center that is located in a municipality with a population of greater than 15,000 persons, if needed to facilitate redevelopment in accordance with smart growth principles.

The act amends Act 250 by increasing its jurisdictional thresholds with regard to the amount of mixed income housing or mixed use that will trigger review, depending upon the population of the municipality in question, for projects located entirely within a designated growth center or a designated downtown. The threshold range is from 200 housing units in a municipality with a population of 15,000 people or more down to 25 units in a municipality with a population of less than 3,000. The act also provides that certain demolition of historic buildings shall not create Act 250 jurisdiction if the division of historic preservation determines the demolition will have no adverse effect or that any adverse effect will be adequately mitigated. It establishes jurisdictional thresholds at similar housing unit levels, given community sizes, for Vermont neighborhoods that consist entirely of mixed income housing and that are not located within designated growth centers or designated downtowns. It provides that within a designated downtown, growth center, or Vermont neighborhood, housing units shall be counted together to determine jurisdiction only if the housing units are part of a discrete project and located on a single tract or multiple contiguous tracts of land. With regard to permanently affordable housing, it provides that jurisdiction shall be determined only by considering the housing units in a discrete project on a single tract or multiple contiguous tracts of land, regardless of whether they are located within a designated entity.

The act revises the Act 250 definition of “mixed income housing” to include owner-occupied housing in which at least 15 percent of the units have a purchase price at first sale that does not exceed 85 percent of the new construction targeted area purchase price limits established by the Vermont housing finance agency or in which at least 20 percent of the units do not exceed 90 percent of those purchase price limits. For rental housing to qualify as mixed income housing, at least 20 percent of housing must be rented by occupants whose gross annual household income does not exceed 60 percent of the county median income or 60 percent of the standard metropolitan statistical area income. If applicable, the total annual cost of housing cannot be more than 30 percent of gross annual household income, and there must be a duration of affordability of no less than 30 years.

The act denies the ability to appeal a conditional use determination under the planning and zoning chapter if the decision by an appropriate municipal panel is that a proposed residential development seeking conditional use approval within a designated downtown, growth center, or neighborhood will not result in an undue adverse effect on the character of the area affected.

The act requires the secretary of natural resources to report to specified legislative committees by January 15, 2009, with regard to the agency’s implementation of and compliance with the municipal pollution control priority system rules and as to the impact of these rules on development.

The act repeals a scheduled sunset of provisions that allows the Vermont Housing Finance Agency to finance housing when at least 20 percent of the units are for occupancy by persons and families of low and moderate income. The act increases from $125 million to $155 million the cap on moral obligation bonds. It creates an income tax credit for developers who build non-rental affordable housing and enables the Vermont Housing and Finance Agency to award tax credits of up to $500,000 a year to qualified developers. It reduces the property transfer tax on a home purchased with certain subsidized mortgages by eliminating the tax on the first $110,000 of purchase price.

The act amends the composition of the downtown board to remove the secretary of human services and the commissioner of housing and community affairs and to add a member appointed by the governor from a list of three persons nominated by the Association of Chamber Executives and another member appointed by the governor from a list of three people nominated by the Vermont Natural Resources Council, the Preservation Trust of Vermont, and Smart Growth Vermont, respectively.

The act establishes a smart growth study committee to consist of four legislators and 10 others from specified organizations. The committee is required to study Act 250 criterion 5, relating to traffic; criterion 9(H), relating to scattered development; criterion 9(L), relating to rural development; and other criteria identified by the committee to determine the effectiveness of those criteria to promote compact settlement patterns, prevent sprawl, and protect important natural resources, and to make recommendations to improve the effectiveness of these criteria in preserving the vitality of Vermont’s existing settlements and preventing sprawl. The committee also is directed to evaluate the development potential of existing downtowns, new town centers, and village centers and evaluate the community and natural resource impacts of developing surrounding lands. It is to make recommendations for incentives to encourage municipalities to preserve Vermont’s working landscape and to develop Vermont neighborhoods and new housing. The committee is also to develop recommendations for how best to conduct periodic assessments of the designation programs under chapter 76A of Title 24. The committee is to elect a chair from among its legislative members and is to report to relevant legislative committees by January 15, 2009.

The act requires the secretary of commerce and community affairs, in consultation with others, to compile and inventory surplus state lands located in close proximity to a designated entity that would be appropriate for the development of housing; to develop program recommendations for housing development that includes a substantial amount of affordable housing; and to recommend mechanisms for transfer of the land. The act requires the Vermont pension investment committee to consider investing up to $17.5 million with the Vermont housing finance agency to assist in its homeownership financing programs for persons and families of low and moderate income. It authorizes the treasurer to establish a short-term credit facility for the Vermont housing finance agency in an amount of up to $50 million to be used as interim financing for its homeownership mortgage loan program.

The act requires that by January 15, the secretary of commerce and community affairs, in collaboration with the regional planning commissions, will report to specified legislative committees on the status of the Vermont neighborhood program. The report is to include: the number of applications and designations; information on the housing units permitted and constructed; with regard to projects of 20 housing units or more, the average cost of permitting; descriptions of rental housing constructed and the rental charges; fees charged, by region, and how fees are used; and an evaluation of municipal incentives and disincentives to participation in the Vermont neighborhood program. The tax department is to track new construction residential housing transfers and make this information public. The act requests each regional planning commission by January 15, 2009, to inventory and map locations that are served by municipal sewer and water and that are suitable for infill development and redevelopment, giving due regard to the location of important natural resources and primary agricultural soils.

The act establishes a safe rental housing study committee, to consist of 14 specified members, which is required to issue an interim report by January 15, 2009, and a final report by January 15, 2010. The committee is to consider: the development of a simplified rental housing code, to include lead safety, habitability, and basic life safety standards; a priority for inspections; procedures for various inspections; standards for licensed rental housing inspectors; a funding structure to implement an inspection program; a procedure for issuing a certificate of habitability; procedures to assure enforcement and compliance; recommendations regarding the role of town health officers with regard to rental housing; training and education resources for landlords and tenants, including a self-assessment checklist and a central resource; incentives for municipalities to establish an inspection program; an implementation schedule; staffing levels; an appropriation sufficient to fund the certification program, licensing, complaint-driven inspections, and enforcement; a system for coordinating displacement services; a program and the identification of resources for repair and improvement. The amount of $30,000 is appropriated to assist the committee.

The act requires that, prior to 2012, the department of housing and community affairs shall give priority to grants for downtowns, new town centers, growth centers, and Vermont neighborhoods. The act requires the natural resources board and the agency of commerce and community development to ensure adequate financial and staffing resources for the designation programs in the downtown chapter and authorizes redeployment of staff and resources.

Effective Date: The first 23 sections of the bill are effective upon passage, except as otherwise provided.

Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont