Regulatory tools to support housing

Municipal planning ordinances that require or incentivize developers to set aside a certain percentage of affordable housing units for low and moderate-income residents.

Zoning bylaws that require large minimum lot sizes  (≥2 acres per dwelling unit) require developers to purchase more land for each unit and these costs are ultimately passed on to homebuyers or renters. Towns can promote the development of new affordable housing by changing their zoning bylaws so that less land is required for each lot. 

Zoning bylaws that require unnecessarily large unit sizes can prevent developers from building smaller, more affordable housing units. Municipalities can adjust zoning requirements to allow for studios, or micro-units or compact units in some instances.

Zoning bylaws often set a maximum density level (number of homes permitted in an area) without regard for the size and type of those homes. Instead, more units could be permitted in the same area if they are physically smaller in some circumstances. This is often seen with accessory dwelling units (ADUs) or in senior housing, which can allow smaller unit sizes in exchange for shared community spaces within a development.

Municipalities often have distinct residential zones for high-density, multi-family buildings and others for low-density single-family homes. A change in the bylaws could be made to allow single- or two-family homes to be built more densely. This practice may overlap with cluster or cottage development practices.

Additional living quarters on single-family lots that are independent of the primary dwelling unit. ADUs can offer more options for affordable housing, as they can be inexpensively constructed and do not require additional land for development. According to Vermont law (24 VSA §4412), municipalities must allow accessory dwelling units. However, municipalities may choose to adjust local bylaws to actively encourage the construction of ADUs.

Municipal planning ordinances that allow developers to increase the maximum allowable development on a property in exchange for making a certain percentage of the housing affordable. May be incorporated into inclusionary zoning requirements

Tools such as inclusionary zoning require developers to create housing that meets definitions of “affordable” by its rent or purchase price. Some municipalities additionally require long-term or perpetual affordability of the unit. Municipalities can ensure that the units remain accessible to future residents through stewardship by a housing trust and/or by setting rent or resale price restrictions.

Transit oriented-development (TOD) seeks to maximize residential, business, and leisure development within walking distance of public transport. TOD promotes long-term affordability of housing by reducing transportation-related costs of households, while also saving energy and reducing emissions. Zoning bylaws can include development standards to address transportation efficiency, including requiring bicycle racks, transit shelters, and connections to existing sidewalks and bicycle pathways, where appropriate. TOD is sometimes called "smart growth".

Areas created to promote certain types of development. Municipalities create separate zoning rules for the overlay district to encourage the intended type of development in addition to pre-existing zoning rules for the larger area. Many areas have overlay districts to protect natural resources or historic neighborhoods, but they can also be used to encourage affordable housing.

PUDs are municipal regulations that allow developers exemptions from certain zoning requirements in exchange for developing properties with desirable criteria. Some municipalities include PUDs within overlay districts. By allowing greater flexibility in the configuration of buildings on a site or allowing mixed usage of a site, a municipality can encourage more creative and efficient use of a space than is typically allowed in local zoning laws. It can also result in lower infrastructure costs and better coordination of development across an area. PUDS are common, but municipalities can choose to make affordable housing a condition for allowing PUDs.

Cluster developments are a permitted use in which density regulations are determined for an entire specified area instead of a lot-by-lot basis, allowing more smaller units to be constructed in the area. Cluster development allows the developer greater flexibility in designing projects but preserves the overall density in an area. This can naturally encourage the construction of low-cost and therefore more affordable housing units. Municipalities can also require affordable housing to be developed as a condition of approval for adjusting density requirements. It also has the benefit of preserving open spaces and protecting natural resources. Cluster development is very similar to PUDs, but typically limited to housing use.

Allowing building proposals that fit within the specifications of local zoning policies to proceed "as of right", without additional review. Developers still need to secure a building permit and fulfill customary regulatory requirements, but the approvals process is generally less contentious and/or time-consuming than the process for proposals that require an exception from current zoning regulations. Through the revision of zoning policies, jurisdictions can significantly broaden the types of housing that are allowed as of right, thus simplifying and reducing the cost and time of delivering homes.

Streamlining the process of receiving permits for desirable housing projects. Can include leveraging technology to facilitate the permitting process and implementing shorter review timelines for permit approval.

Allowing permit fee reductions, waivers, or deferments for affordable housing projects.

Reducing or waiving impact fees for affordable housing projects. Impact fees are important for municipalities because they require developers to pay their fair share of the costs of providing public services to the new development. However, impact fees can be an additional barrier to developing affordable housing projects.

Allow for reductions or waivers of typical public works requirements (such as widening roads, improving sidewalks, expanding sewer capacity, or creating recreational facilities) for development of affordable housing

Requires housing units torn down by developers to be replaced with a specified percentage of new housing units to maintain housing stock within a community. In some areas developers have the option of paying a fee in lieu of constructing new housing units, which may be placed in a housing trust fund.

Housing trust funds (HTF) can support construction or rehabilitation of owner or renter homes, including creating Accessory Dwelling Units. HTFs can be used to encourage young families to move in and renovate homes through grants, low-interest loans, or loan forgiveness over time.  Communities may work with state, regional, and county housing trust funds, or may choose to develop a local housing trust fund. Funding sources for HTFs include local options taxes, a percentage of property tax revenue, fund balances, bond proceeds, general fund appropriations, and dedicated fees. 

Promote and enforce safe and healthy living conditions for rental properties. Vermont has some rental housing laws, but municipalities may supplement those laws with municipal rental housing codes.

Allows testimony from hearings before a municipality’s planning commission, zoning board, or development review board to be incorporated into appeals heard by a Vermont court. This prevents municipalities and plaintiffs from having to reproduce expert testimony at every stage of an appeal, potentially saving significant time and expense. Municipalities have the option to implement this approach into local law under Vermont statue 24 V.S.A. § 4471(b).

The state of Vermont allows municipalities to “designate” specific geographic areas of their community as centers of economic importance. The five designations each offer a range of tools and incentives for towns to shape development or revitalization in the specified area. The available designations are Village Centers, Downtowns, New Town Centers, Neighborhood Development Areas, and Growth Centers.

Vacant and abandoned properties are not only missed housing opportunities, but also can harm the surrounding neighborhood. Municipalities can enact vacant property registration ordinances that require individuals to register vacant land. Owners may be required to pay fees for vacant properties, which may be increased the longer it remains vacant, incentivizing owners to redevelop. Concept can overlap with land value taxation. 

Land banks are government-created nonprofit corporations designed to convert tax-delinquent and abandoned properties or land donations into affordable housing or other community uses.

Municipalities may own land they can donate or sell at low cost for housing development.