Act 181 reaction: Thetford declines Tier 1B

On Monday, March 16th, the Thetford selectboard considered whether to adopt Act 181's Tier 1B areas that are deregulated to spur growth around village centers. After deliberation the board decided against opting-in at this time.

Leading up to this decision is the 56-year long history of land regulation under Act 250 and the 2024 effort by the Vermont legislature to modernize it with Act 181 in response to the current housing shortage.

Act 250 was preceded by the building of I-91 and I-89. Before the coming of interstate highways, Vermont’s population had grown hardly at all in the 20th century. The ready access afforded by interstates resulted in an unprecedented flood of tourists, spurring runaway development, particularly around ski areas, and a rise in second home ownership. Republican Governor Deane Davis initiated Act 250 to manage this tide of development and protect the natural resources and aesthetics of the Vermont landscape that are central to the Vermont identity and its tourism economy, worth $4.2 billion  as of 2024.

The Vermont legislature wrote Act 250 to encourage towns to adopt local zoning and subdivision bylaws using a carrot and stick approach. In towns that adopted Zoning and subdivision regulations, Act 250 applies to commercial development only if the parcel is ten acres or more (regulation by size). Also a developer is allowed to create up to ten lots by subdivision before Act 250 is invoked, which is more than in a town without a subdivision bylaw. In towns without zoning and subdivision bylaws, commercial development on a one-acre parcel triggers Act 250, while subdivisions cannot create more than six lots.

When Act 250 is triggered, it regulates a project according to the following ten criteria: 

1) Air and water pollution

2) Adequate water supply

3) Impact on existing water users

4) Soil erosion

5) Impact on local and state transportation infrastructure

6) Burden on local schools

7) Burden on municipal services like fire and police

8) Aesthetics and natural resources like scenic beauty, historic sites, wildlife habitat and rare natural areas

9) Conformance with Capability and Development Plan, addressing impacts to agriculture, forestry, energy, settlement patterns and more

10) Town Plan and Regional Plan conformance

Even though Act 250 detractors claim that it impedes development, more than 98% of projects reviewed under Act 250 are approved. One aspect of Act 250 that invokes ire is that it provides for local input, something that may be used by residents to launch hostile appeals against a project.

Act 181 came about through consensus among diverse stakeholders, including the Vermont Chamber of Commerce, environmental groups, regional planning commissions, affordable housing advocates, realtors, engineers, state agencies, and many others. It differs fundamentally from Act 250 in that it regulates a project based on its location rather than its size. 

The Vermont Planning Statute prioritizes development according to Smart Growth principles that encourage housing and other development in areas of Vermont that are suited to growth, contain the necessary infrastructure (e.g. water, wastewater), and have sufficient local zoning regulations in place to adequately regulate development. Under Act 181 these areas have been designated in the Future Land Use Maps created by Regional Planning Commissions that link state government with local municipalities. They provide local planning assistance with the aim of keeping their region aligned with state goals.

Act 181 was crafted to de-regulate certain areas to allow rapid housing growth (deregulation by location), while in exchange applying more protection from development to the rest of the state. 

Act 181 seeks to ramp up development by removing certain locations from Act 250 altogether. These are Tier 1A and Tier 1B zones in municipalities with zoning and subdivision bylaws. Tier 1A  are areas around Downtown Centers, Village Centers and Planned Growth areas. Tier 1B are areas surrounding more rural village areas, like Post Mills or Thetford Center. 

Act 250 does not apply at all in Tier 1A, no matter how large the project. (Thetford has no Tier 1A zones.)

In Tier 1B, Act 250 jurisdiction is limited to projects of over 50 housing units. In other words, ONLY local zoning and subdivision bylaws can be used to regulate projects of up to 50 units in size. Post Mills, Thetford Center, Thetford Hill, and East Thetford qualify for Tier 1B zones. North Thetford is omitted presumably because it overlaps with the FEMA flood zone of the Connecticut River. Towns may choose to adopt Tier 1 zones or maintain their status quo under Act 250 .

Outside of Tier 1A and Tier 1B areas, most of the land falls into Tier 2. Here, Act 250 applies to projects of ten or more housing units. 

Tier 2 addresses the fragmentation of formerly intact forest by rural residential development. This creeping rural suburbanization is degrading over 14,000 acres of forest per year according to the Forest Service. Since 2007, the state has lost 6% of its forest cover completely, and many thousands of acres suffer from parcelization into disjointed patterns of ownership that are no longer viable for forestry and incur negative ecological impacts. Indeed, in 2007 Republican Governor Douglas' Climate Commission recommended that Vermont’s "Green Bank" consisting primarily of forests should be kept intact as it stores carbon and puts the brakes on climate change. Thus Act 181 proposes to encourage more compact, less sprawling future development in Tier 2 lands that are mostly forested, through the Road Rule. 

The Road Rule proposes that an Act 250 permit be required for new private roads over 800 ft long or a combined road and driveway network of over 2000 ft. Improvements to unpaved Class 4 roads also fall under the Road Rule. This reduces fragmentation of habitat, road erosion and runoff into waterbodies, and the cost to towns of maintaining long remote roads.

A very small fraction of the state is mapped as Tier 3. This Tier was originally conceived as protecting the most critical of Vermont‘s natural resources. It has been whittled away by opposition to only encompass the most important wildlife road crossings (habitat connectors), stream headwaters, significant natural communities, and high elevation forest (that would not be developable anyway).

As for neighbors’ appeals of development projects, Act 181 raises the threshold for appeals thus: Act 181 Sec. 59: “Anyone in the category of “any combination of voters, residents, or real property owners within a municipality listed in subdivision” needs to put together a group of 20 co-appellants.” This is an increase over the 10 permitted under the original Act 250.

Returning to the decision of the Thetford selectboard to forgo Tier 1B designation for any of its villages: while Thetford has well-developed zoning and subdivision bylaws, the question became, “Are they sufficient to handle a development of 50 units without the protective umbrella of Act 250?” Not all of the ten criteria are covered by local zoning. The selectboard decided to take a "wait and see" approach and observe how it goes in the neighboring towns that are adopting Tier 1B zones.