Right now the Vermont Legislature is considering adjustments to Act 181, the 2024 legislation that modernizes Act 250, Vermont’s land use law that has been in effect since 1970. The land use planning process is nuanced and so a path forward for Act 181 that allows for thoughtful implementation is being debated in the State House with S.325. S.325 makes targeted adjustments to Act 181 across four key areas: natural resource protections, housing policy, regional planning, and community engagement.

Here’s a breakdown of those areas and how these rules may affect the rollout of Act 181 in your community.

Natural Resources 

• The primary goal for S.325 is to provide more time for comprehensive rulemaking by delaying the implementation of Act 181’s natural resource protections (Road Rule, Tier 3, Act 250 Criterion 8C), which will allow more time for meaningful public engagement. The components of this expanded timeline will include the following:
  • Extension of the Road Rule deadline to 2030 (from the currently stated 2026 deadline). Other extensions within the natural protections provisions of Act 181 include Tier 3 implementation that is now proposed to take effect in 2028 and Criterion 8C with the updated deadline of 2028.
• S.325 also clarifies the authority of the Land Use Review Board (LURB) to limit which Act 250 criteria apply to Tier 3 and Road Rule-triggered developments, and to determine the circumstances under which Act 250 review is triggered at all — ensuring the law is applied in a focused and appropriate manner.

Housing 

• On housing, S.325 takes several steps to reduce barriers to development while maintaining support for affordability. It extends and expands the Interim Housing Exemptions from Act 250 through 2030, broadening their scope to include subdivisions and mixed-use developments so there is no gap in coverage. The bill also preserves the Priority Housing Projects program, which encourages private investment in affordable housing in areas already planned for growth.
• For communities in Tier 1A, S.325 eases certain planning requirements by removing the obligation to plan for the maintenance of rare species and to enforce existing Act 250 permit conditions. S.325 also calls for a report with recommendations on how to reduce discretionary review and appeals of residential development, with the goal of limiting subjective barriers to housing.

Regional Planning

• The latest version of S.325 includes several adjustments aimed at supporting regional and municipal planning processes. This allows towns to opt-in to Tier 1B status outside of the regular regional plan update cycle and extends deadlines for both regional and municipal plan updates, giving communities more flexibility to align their planning timelines. This bill strengthens smart growth elements of regional future land use maps through the accommodation of new growth centers. This adjustment to S.325 allows for an expansion of “downtown and village centers” to include non-historic centers, new or emerging centers, and also clarifies the intent that most towns in Vermont will have at least one village center (making them eligible for state benefits).
• Specifies that eligibility for the Downtown & Village Center Tax Credit Program only includes areas where a portion of the designated center is listed or eligible for listing in the national register of historic places.

Community Engagement

• To ensure Vermonters have the opportunity to weigh in on Act 181, S.325. provides funding for the Land Use Review Board to conduct additional public engagement and education. This investment reflects the recognition that the success of Act 181’s land use reform depends on informed and engaged Vermonters.