On paper, S.325 is a study bill. It does not rewrite Vermont zoning law. It does not amend Act 250. It does not eliminate local hearings. What it does is create a task force.

But what that task force is being asked to design could significantly reshape how housing is approved in Vermont.

S.325 establishes a nine-member task force to develop a detailed proposal for “Residential Opportunity Overlay Districts.” These districts would be governed by model zoning bylaws drafted at the state level. Municipalities would be allowed to adopt those model bylaws in designated areas. If adopted, residential development that meets the model code would receive a certificate of compliance from a zoning administrator. There would be no hearing before a development review board and no appeal.

That procedural shift is the heart of the bill.

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The Promise of “Clear and Objective Standards”

The bill describes the model bylaws in broad, aspirational language. They are to use “clear and objective standards,” address “critical land use issues,” embed “New England town-building principles,” and integrate flood and historic protections. Grants would be available to municipalities that adopt the model codes. A state agency would oversee adoption to ensure designated districts allow sufficient housing density to meet the municipality’s share of statewide housing targets.

What the bill does not do is define those terms.

“Clear and objective standards” is a phrase commonly used in zoning reform efforts around the country. In practice, it generally refers to measurable criteria: height limits, setbacks, frontage, lot coverage, unit counts, dimensional specifications. If a project meets those standards, approval is administrative rather than discretionary.

In contrast, many current local zoning systems rely on broader language such as “neighborhood character,” “compatibility,” or “community impact,” which require interpretation by development review boards and often result in public hearings and appeals.

S.325 does not spell out what the model standards would look like. It leaves that work to the task force.

The same is true for other phrases in the bill. “Critical land use issues” are not defined. “New England town-building principles” are not explained. The integration of flood and historic protections is mentioned but not detailed. No draft overlay district or sample bylaw language accompanies the bill.

At this stage, the concepts are placeholders. The content would come later.

The Act 181 Context

S.325 is being discussed in the broader context of Act 181, passed in 2024. Act 181 created Future Land Use Maps and established housing density expectations tied to state planning goals. Legislators have been clear that Act 181 does not override municipal zoning authority. Towns still write and adopt their own bylaws.

S.325 does not formally contradict that principle. Municipalities “would have the option” to adopt the model bylaws. Nothing in the bill mandates participation.

However, the structure of the proposal introduces incentives that could shape local decision-making.

Municipalities that adopt the overlays would have access to grants. Developments that comply with the model code would bypass discretionary hearings and appeals. And a state agency would oversee whether adopted districts allow enough density to meet housing targets.

For communities facing housing pressure, litigation risk, or lengthy permitting processes, the promise of administrative approval and reduced appeals could be attractive. For communities that decline to adopt the overlays, the existing permitting structure remains in place, including hearings and potential appeals.

The bill does not compel adoption. But it creates a pathway that may prove difficult to ignore.

A Shift in Procedure

If adopted in a municipality, the overlay districts would change how projects are reviewed. Instead of appearing before a development review board for a public hearing, a compliant housing proposal would be reviewed by a zoning administrator. If it meets the objective criteria, it would receive a certificate of compliance.

There would be no hearing and no appeal.

That is a significant departure from Vermont’s traditional development culture, which places strong emphasis on public hearings and the right of neighbors to challenge approvals.

Supporters argue that objective standards create predictability, reduce uncertainty, and encourage housing production. Critics may see the approach as limiting local discretion and public participation.

S.325 does not resolve that debate. It initiates it.

What Comes Next

The task force outlined in S.325 would include legislators, a representative from the Vermont Association of Planning and Development Agencies, the Commissioner of Housing and Community Development, representatives from the Vermont Natural Resources Council and the Vermont League of Cities and Towns, a representative from Let’s Build Homes, an affordable housing development representative, and a town planner.

Its charge would be to develop illustrated model codes, propose how they would be administered, determine which entity would oversee them, and recommend the process for municipal adoption.

In other words, the details that are currently absent from the bill would be developed over the next year.

For now, S.325 does not alter zoning in any town. It does not eliminate appeals statewide. It does not override Act 181’s assurances about local control.

What it does is lay the groundwork for a model zoning system that could streamline housing approvals in participating municipalities and shift certain decisions from discretionary review to administrative compliance.

Whether that framework ultimately represents modernization, centralization, or something in between will depend on how the task force defines the standards—and whether Vermont towns choose to use them.

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Dave Soulia | FYIVT

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