In brief

An overlay district is a common tool for establishing development restrictions, or extending development incentives, on land within a defined geographic area or characterized by specific physical features or site conditions. Adopted as part of a zoning bylaw, overlay districts are superimposed over one or more underlying conventional zoning districts in order to address areas of community interest that warrant special consideration such as historic preservation, or protection of a particular natural resource like shorelands or wildlife travel corridors.

Summary

Vermont planning statutes (§4414(2)) specifically authorize municipalities to adopt overlay districts to “supplement or modify the zoning requirements otherwise applicable in underlying districts in order to provide supplementary provisions for areas such as shorelands and floodplains, aquifer and source protection areas, ridgelines and scenic features, highway intersection, bypass, and interchange areas, or other features described in section 4411 of this title.”

Overlay district boundaries are drawn around resource areas that have been identified for special consideration. The most common application of overlay districts in Vermont are flood hazard districts, where certain types of land use and development are required to comply with site and building standards if the property is located within a mapped flood hazard area. Other common types of overlay districts include:

• Natural Resource – often utilized to protect hillside development, farmland, watershed protection and stream and wildlife corridors.
• Historic Preservation – examples include historic district design standards.
• Design Review – utilized to ensure new development fits into the existing community character. Examples include highway corridors and central business districts.
• Public Safety – often associated with airport hazard zones, fire safety zones and geologic hazard zones.
• Development Incentives – examples include parking districts, that reduce parking requirements in compact, mixed use areas, or Transit Oriented Development (TOD) Overlay Districts that grant incentives for compact, mixed use development within walking distance of transit stops.

The “special considerations” for development in an overlay district usually include different standards of review – for example, further limits on allowed uses, conditional use review of uses that require only administrative review in the underlying district, and/or district standards that apply to all uses in the overlay district. These supplement and are applied in addition to the underlying district’s standards.

Overlay districts are particularly well-suited for protecting wildlife corridors – which include forested areas that allow animals to travel from one large forest block to another in an attempt to meet their nutrition and mating needs. Large forest blocks may be protected in a single forest district, but the small patches of forest that link wildlife habitat sometimes fall outside those boundaries (and across multiple underlying zoning districts) and therefore need additional protection.

Related Issues
Community Design
Forest Fragmentation
Historic Preservation
Working Lands
Wildlife Corridor Protection

Related Tools

Design Review Regulations

Related Case Studies
Meadowland Overlay District-Warren
Scenic Overlay Districts-Charlotte
Wildlife Corridor Overlay Zone – Shrewsbury

Resources

“Balancing Development and Conservation,” Well Grounded: Using Local Land Use Authority to Achieve Smart Growth, by John R. Nolan. See “A. Overlay Zoning” in Chapter 6, p. 209-213.

“Overlay Districts,” Community Strategies for Vermont’s Forests and Wildlife: A Guide for Local Action. Chapter 14, p. 50.

Vermont Planning Statutes. This link provides the legal framework for overlay districts as referenced in the Vermont Planning Statute.