Move over Act 250 - Act 181 comes to Thetford

Most Vermont residents have heard the term Act 250, even though its purpose may be hazy to them or laced with negative connotations. It may surprise some that Act 250 had its origins with Republican Governor Deane Davis in 1969, as a response to rapid, uncontrolled development of towns with ski areas. While on the campaign trail, Davis toured some of these locations and found buildings "located on hastily improvised roads which were very steep and had curves in them that were entirely unsuitable for school buses or any large vehicle of any kind." He also observed "open sewers running into the ditches, which startled me. People were up in arms; even the real estate men who were engaged in the business of selling lots..."

Davis decided that regulating development was the solution, but he knew he had to obtain buy-in from a broad constituency. He appointed the Gibb Commission that included environmentalists, real estate people and businessmen. After hearing  from "a large group of witnesses" they unanimously recommended "a land-use management law at the state level."  Thus Act 250 came into being. It initiated a public, quasi-judicial process through which Act 250 District Commissions approved, modified, or, infrequently, rejected large-scale developments on the basis of ten criteria addressing environmental, economic and public welfare concerns. These include pollution of water and air, scenic impacts, historic sites, wildlife habitat, etc. Small developments were not subject to Act 250. It only regulated large-scale commercial, industrial, and residential development - projects of ten or more housing units, or projects over 10 acres (or one acre if a town lacks zoning and subdivision bylaws) or projects on steep slopes at over 2500 ft elevation. (Full statute here)

Overall Act 250 has been credited with protecting Vermont's signature landscape and wildlife habitat. However, rightly or wrongly it has also been blamed for project delays due to the hearing process and for contributing to the current housing shortage. In this vein it is noteworthy that, as of 2022, the states with the most severe shortages of housing are California, Idaho, The District of Columbia, Utah, Oregon, Washington, New Jersey, New Hampshire, Colorado and Minnesota. Despite Act 250, Vermont is not listed. 

The last decade or more saw a growing sentiment that Act 250 encouraged rural sprawl and forest fragmentation by only regulating large multi-unit development. Simultaneously housing advocates decried the lack of "middle housing" that is affordable to average working people like teachers, auto technicians, store clerks, etc, because, due to escalating costs, single-lot developers could only profit by building luxury homes.

After extensive research and years of debate among many different interests the VT General Assembly in 2024 passed an innovative bill that modernized Act 250. This new legislation, Act 181, facilitates construction of workforce housing while at the same time seeking to better protect the most important natural resources. 

Rather than focusing on size of development, Act 181 applies the regulations of Act 250 based on the location of a development. It uses "tiered zoning" to focus development into planned "smart growth" areas and away from sensitive natural areas.

The Act 181 zoning tiers are as follows: 

Exempt from Act 250:

Tier 1A:  No Act 250 requirements for residential, commercial, or industrial development in mapped areas directly adjacent to cities and towns with municipal planning, zoning and subdivision bylaws that support growth around compact centers; adequate planning staff; public infrastructure for sewer and water; flood hazard and river corridor bylaws; zoning that protects sensitive natural and historic features. (There are no Tier 1A areas in Thetford.)

Tier 1B:  No Act 250 requirements for construction of projects with 50 or fewer housing units located on 10 acres or less in mapped areas directly adjacent to towns and villages that have municipal zoning and subdivision bylaws; public sewer and water infrastructure OR soils that can support compact development; flood hazard and river corridor bylaws; adequate planning staff or ability to contract such services. (Because each designated village gets a Tier 1B area, Thetford has five Tier 1Bs. By contrast most other towns, such as Norwich and Fairlee, have but one.)

Act 250 Applies:

Tier 2: These locations comprise most of the state's area. They are characterized by tracts of natural resources, working farms and forests, and development at a low density. Development in Tier 2 locations falls under Act 250 regulations with the addition of a new road rule that spurs the clustering of units and creates a review process for long roads which cause forest fragmentation. Act 250 review applies to roads longer than 800 ft, or a network of roads and driveways that are longer than 2000 ft in total.

Tier 3: This will encompass Vermont's most critical natural resources. Act 250 will be applied due to the sensitivity of these areas, but it will not preclude some development. Other programs or permitting processes may be applied too. Tier 3 areas are still being formulated in a rulemaking process led by the Land Use Regulatory Board and the Agency of Natural Resources.

Act 181 also supports working lands enterprises like on-farm and wood product businesses and provides Act 250 exemptions for conversion of hotels or motels to affordable housing. There are in addition some exemptions for housing projects in designated growth centers and in urban areas of over 50,000 residents.

Developers will be happy to know that Act 181 also limits the ability of abutters and residents who would use the appeal process to stop or delay a housing project. Appeals can no longer be based on how the "character of the area" might be affected, and the law raises the number of persons required to launch an appeal.

Regarding Thetford, the Two Rivers Regional Planning Commission (TRORC) has already mapped the provisional Tier 1B areas abutting five villages: Post Mills, North Thetford, East Thetford, Thetford Hill, and Thetford Center. Chief Planner Kevin Geiger presented the maps to the Thetford Selectboard on February 2nd with some additional information: The maps of Tier 1B areas will only apply if the selectboard "requests Tier 1B as part of the Regional Plan." Then any Tier 1B areas requested in Thetford must be approved by the Land Use Review Board that is tasked with transitioning Act 250 to location-based jurisdiction as well as creating new areas of Act 250 exemption to promote responsible development.

Rather confusingly TRORC also says "This (Act 250) exemption is currently in place through 2026 in the five villages.... After 2026, this exempt area will expire, and such an exemption will only continue in new ‘Tier 1B’ areas that are in the process of being established." In practice this means that when the Regional Plan is adopted by 2027 any Tier 1B areas already approved by the selectboard will become permanent. Any Tier 1B areas not approved by 2027 will expire, but the selectboard can request to approve them at any time. 

TRORC goes on to say that from 2027 onward "Act 250 would no longer apply to housing developments of 50 units or less on parcels of 10 acres or less within those areas. Development is not limited to affordable housing or big buildings. Importantly, Thetford's zoning and subdivision rules would not change and would still apply. Various other things like wastewater and water supply permits would still apply as well."

Act 250 will no longer be relevant for Tier 1B areas and local zoning regulations alone will hold sway. Conceivably that could task Thetford's Development Review Board of volunteers with applying the Town's zoning bylaws to a 50-unit development, a scenario in a town where single homes and "mother-in-law" units are the norm. 

In fact, something similar happened in the building boom of the early 1980s before Thetford had its current, more capable zoning bylaw. A 56-lot subdivision was proposed for 79 acres in Post Mills, located where Crossroad Farm now stands. Fortunately for Thetford, the size of the development, the prime agricultural soils, competition for water, impact on the school system and other issues triggered an Act 250 environmental review. The developers scaled back their plans. Then financial headwinds set in and they went bankrupt after building just one house. This allowed Cross Road Farm to expand beyond its original 15 acres. The caliber of Thetford’s then rudimentary land use bylaws in tackling a complex proposal was not fully tested.

Currently the Thetford Planning Commission is again updating the zoning and subdivision bylaws. Perhaps they could, with advice from TRORC, fine-tune the bylaws for this new era of flying solo in Tier 1B.