Developers tell House General and Housing Committee Vermont rules, fees and infrastructure costs are blocking new homes

Two private housing developers testified to the House General and Housing Committee on Feb. 12 that state and local permitting, fees and the cost of infrastructure are key barriers to building new homes in Vermont.

Zeke Davison, chief operating officer of Summit Properties, and Evan Langfelt, president and CEO of O'Brien Brothers, described projects in Middlebury and South Burlington and urged clearer, faster processes and targeted infrastructure investment to reduce costs and unlock more housing.

Why it matters: Vermont faces a shortage of homes, witnesses said, while per-unit construction costs have risen so high that many markets cannot support new development without subsidies. Committee members asked for specific legislative fixes and for the developers to submit a short bulleted list of recommended changes.

Davison summarized the scale and constraints from Summit Properties’ recent work: "We currently have under management about 1,400 units, about a thousand of those have some affordability component" and said the firm has a master-plan approval for 254 units in Middlebury, has broken ground on 80 of them and is building 45 for-sale homes in the first phase. He said the project is subsidized: "We started construction on the first 80 ... we've received in a $50,000,000 project over $30,000,000 worth of subsidy to do that." He added the first phase was still more than $2 million short until Middlebury College filled the gap.

Langfelt described O'Brien Brothers’ Hillside East at O'Brien Farm in South Burlington as "Vermont's first 100 percent carbon free climate-resilient neighborhood" with rooftop solar, home batteries and a microgrid. He said costs for for-sale single-family and townhome units have risen sharply: "When we launched the first phase of Hillside in 2018 ... we were selling it at a market rate basis at $335,000. I can't even build that unit for that cost at this point." He gave price ranges for current product: professionally affordable three- or four-bedroom units around $320,000; cottages in the roughly $600,000 range; townhomes and single-family starting in the low $700,000s.

Cost drivers and fees: Witnesses identified several specific cost drivers and fees discussed with the committee: average development cost for an affordable rental unit now exceeds $500,000; Vermont construction costs run 10–15% above neighboring states, a portion of which Davison attributed to labor and Langfelt partly to higher wage and energy-code requirements. Davison said Vermont's energy-code changes add "$10,000 to $15,000 extra per unit." Langfelt described a mix of duplicative state and local fees that added materially to project budgets: he said South Burlington applied an education impact fee that ranges from about $3,500 for a one-bedroom unit up to $12,500 for a four-bedroom, and described prime-agriculture mitigation charges and a separate ANR grassland-bird impact fee that, on his site, amounted to roughly $600,000 and $200,000 respectively.

Permitting, appeals and duplicative review: Both witnesses told the committee that the length and redundancy of permitting — local development review processes followed by Act 250 review — increases cost and delays. Langfelt said a South Burlington phase went through an 18-month permitting period for 115 units and another phase took three years, with much of the work duplicated between local and Act 250 reviews. Davison said developers avoid sites outside designated centers because of Act 250 risks. Both called for tightening or shortening appeal opportunities, faster resolution of appeals and clearer rules on when a site qualifies for statutory "by-right" treatment if sewer and water service are already in place.

Infrastructure funding and geography: Both developers urged more and clearer state support for horizontal infrastructure (streets, water and sewer mains, sidewalks, stormwater systems and related site work). Davison said roughly 10% of the cost for his Middlebury project's first 80 units was infrastructure and that without public or philanthropic investment such costs make projects unfeasible in many rural towns. Langfelt suggested targeted finance tools, including a residential tax-increment financing (TIF)-style approach or other public funding for infrastructure in places where market-rate prices cannot carry upfront site costs.

Labor and supply: The witnesses described a constrained construction labor market. Davison and Langfelt said labor shortages are the largest cost driver; Langfelt noted the state's construction workforce is older and decreasing, while Davison emphasized that labor premiums in Vermont make projects more expensive compared with neighboring states.

Policy suggestions and next steps: Both witnesses urged legislative and administrative fixes: reducing appeal windows or adding consequences for repeated or baseless appeals, clarifying the definition of served sewer and water areas for by-right density, limiting duplicative local/state fee exposure, and accelerating infrastructure funding targeted to places identified for growth. Chair Mahali asked the witnesses to submit a concise set of bullet points with specific language; Davison said he had "10 bullet pointed items" and agreed to provide them to the committee.

What the hearing did not decide: The committee did not vote on any bills or adopt formal policy at the hearing. Members said they would consider the witnesses' written recommendations and continue an infrastructure-focused hearing the next day with the Commerce committee.

Ending: Committee members thanked the witnesses and scheduled follow-up work. Davison and Langfelt told the committee they would continue to provide examples and proposed statutory fixes for consideration.