Natural Resources & Energy committee weighs S.328 zoning changes and 2,000‑foot service‑area proposal

The Senate Natural Resources & Energy committee met March 17 to review S.328 (draft 3.1), a housing and economic‑development bill that would change municipal zoning rules to explicitly allow manufactured housing, make duplexes a permitted use in residential districts, and require municipalities served by water and sewer to permit multi‑unit dwellings of four or fewer units on the same lot as single‑family homes. Legislative counsel Mr. Chowosk briefed the committee on the bill's zoning and definition changes.

Counsel summarized the proposed definition change in section 8 that would treat an "area served by municipal water and sewer infrastructure" as any parcel within 2,000 feet of municipal water and wastewater systems. "This is proposing that that be within 2,000 ft those systems," Mr. Chowosk said, describing the distance‑based option added to the statutory definition.

Katie Gallagher of the Vermont Natural Resources Council said her group supports the bill's underlying goal of encouraging housing in areas with infrastructure but urged caution about a fixed 2,000‑foot rule. "The impact of that could be creating ... a kind of disconnect between what we are writing in statute and ... signaling on the ground that infrastructure is available when it is not," Gallagher said, adding that planners who testified to the Senate Economic Development Committee recommended shorter distances (she cited a planner recommendation of about 1,300 feet) and that many municipal connection expectations are commonly closer to 50–150 feet.

Gallagher warned the 2,000‑foot measure could have the practical effect of preempting local zoning choices and creating community distrust of planning processes. She said towns are permitted to conserve areas and decline new housing but that the statute limits their ability to allow single‑family connections while denying multifamily. "If a town decides that they don't want to have any new housing along this infrastructure, they are allowed to do that," she said, but noted limits when municipalities permit single‑family connections yet try to exclude multifamily.

To address those concerns, Gallagher proposed three alternatives: tie any distance metric to regionally mapped future land‑use or infrastructure service areas (so the rule only applies inside locally and regionally identified growth areas), reduce the fixed radius to a more conservative figure (she suggested 300 feet as an example), or add a provision that the mere presence of a water line should not, by itself, establish that an area is planned for additional residential density absent an adopted municipal plan or identified service area.

Committee members and staff discussed the tradeoffs. Several members said the requirement's intent is to encourage housing in areas identified for growth, but they questioned whether a one‑size‑fits‑all distance would fit on‑the‑ground realities such as road corridors where infrastructure runs long distances without an intent to serve all adjacent parcels. One member noted that the planners who provided options to the Senate Economic Development Committee suggested a maximum nearer 1,300 feet and that most municipal codes anticipate shorter connection distances.

The committee also reviewed related changes in S.328 meant to reconcile new town center designations with existing downtown and village center designations. Counsel described the drafting awkwardness that arises when moving an existing program into a consolidated designation structure and cautioned that the legal transition may require cleanup in future years.

No formal motions or votes were taken. Members indicated they are likely to request additional testimony and that committee amendments are under consideration; the chair reported the Senate Economic Development chair is open to amendments. The committee agreed to seek more technical input before deciding whether to offer committee amendment language and to refer the bill to appropriations if necessary.

What happens next: committee staff said they will collect additional testimony and consider a possible committee amendment to S.328; no vote was taken at the March 17 meeting.