Governor's Housing Order Sparks Constitutional Clash
A Vermonter's Impartial Guide to the Debate Over Executive Power, Regulation, and the Housing Crisis
On September 17, 2025, Governor Phil Scott issued Executive Order 06-25, a directive aimed at cutting regulatory red tape to spur housing construction. The move immediately created a high-stakes confrontation, pitting the administration’s “all-hands-on-deck” approach to the housing crisis against a broad coalition of environmental, civil liberties, and good-government groups.
According to the Governor’s office, the order is a necessary and legal step to address a crisis. According to its challengers, it’s an unconstitutional power grab that “shortcuts the rule of law.”
The dispute is more than a simple policy disagreement; it’s a fundamental test of the separation of powers in Vermont. For Vermonters trying to understand the issue, the key isn’t just what the order does, but how it attempts to do it—and the complex legal question at the center of the fight.
The Problem: A Housing Deficit
The context for the Governor’s order is Vermont’s severe and persistent housing shortage.
The Goal: State economists forecast that Vermont must build over 40,000 new housing units by 2030 to meet demand, according to reports cited by the Governor’s office.
The Burden: This scarcity has driven up costs, with the administration noting that a quarter of Vermont renters spend more than 50% of their income on housing.
The Rationale: Governor Scott has stated that “despite many agreeing, we haven’t done anywhere near enough” and has characterized existing land use and energy policies as “counterproductive.” In his view, the legislature has not acted with sufficient urgency to reform the regulations that, he argues, delay projects and increase costs.
The Order: What Does It Actually Do?
The 10-page executive order, set to last through 2027, makes several immediate and significant changes to state rules. The most contentious provisions include:
Rolling Back Energy Codes: The order directs that new construction projects “shall have the option of complying” with the older, less stringent 2020 energy standards instead of the mandatory 2024 standards. Proponents, like the Vermont Builders and Remodelers Association, claim this change could save an estimated $12,000 on the construction cost of an average new home.
Reducing Wetland Protections: In designated growth areas like downtowns, the order seeks to shrink the required protective buffer zone around Class II wetlands from 50 feet to 25 feet. It also states that state permits would no longer be required for impacts to unmapped Class II wetlands in these areas.
Mandating Speed: The order directs all state agencies to give “priority processing” to housing-related applications and aims to halve the time to review and approve projects.
Creating “Default Approval”: The order introduces a “deemed approval” mechanism, where a permit could be automatically approved if a state agency fails to act on an application within its established deadlines.
The Core Legal Fight: A Constitutional Showdown
This is where the issue becomes complex. The central question is: Does the Governor have the authority to unilaterally change laws and rules that were passed by the legislature?
The Challengers’ Argument: “An Illegal Overreach”
A coalition of six organizations—including the Vermont NaturalResources Council (VNRC), Conservation Law Foundation (CLF), and the ACLU of Vermont—has formally challenged the order, calling it illegal.
Their core claim is that the order violates the Vermont Constitution’s separation of powers clause, which states the legislative, executive, and judicial branches must be “separate and distinct.”
The challengers argue that the Governor’s job is to enforce laws, not rewrite them. They contend that the energy codes and wetland rules were created through a proper, public legislative and rulemaking process, and the Governor cannot simply “disregard” them with an executive order.
Lauren Hierl, Executive Director of VNRC, called the order an “aggressive short cutting of the rule of law,” while Elena Mihaly of CLF warned it “sets a dangerous precedent.” By including the ACLU, the coalition frames this not just as an environmental issue, but as a fundamental threat to the democratic process.
The Governor’s Defense: The ‘Missing Piece’ of the Puzzle
The Governor’s office maintains the order is a “constitutional and legal exercise” of executive authority. His legal justification likely rests on a specific and little-known state law: 3 V.S.A. Chapter 41.
This statute addresses the Governor’s power to reorganize the executive branch.
Critically, one section of this law states the Governor may “propose by Executive Order changes... which are not consistent with or will supersede existing organization provided for by law.”
The Catch: This statute includes a legislative check. Any such order must be submitted to the General Assembly, which then has 90 days to pass a resolution to “disapprove” it. If they don’t, the order becomes effective.
This statute is the heart of the legal ambiguity. The challengers would likely argue this law was intended for administrative changes—like merging two departments—not for making sweeping, substantive policy changes to environmental and energy law. The administration’s position is that the statute provides a legitimate, existing pathway for exactly this kind of action, with the legislative veto serving as the constitutional safeguard.
This conflict is the latest in a series of similar disputes. Legislative leaders previously accused the Governor of “flouting the separation of powers” in disagreements over the “Vermont Strong” license plate program and, more recently, changes to the emergency hotel housing program.
The Stakeholders: ‘Crisis’ vs. ‘Process’
Vermonters are split on the order, with the division falling along predictable lines.
Proponents (Builders & Business): The Vermont Builders and Remodelers Association and the Vermont Chamber of Commerce strongly support the order. They argue it provides much-needed “flexibility, speed, and predictability” and is a long-overdue measure to cut the red tape they see as the primary barrier to building affordable housing.
Opponents (Environmental & Democracy Groups): The coalition challenging the order states they “explicitly support” building more housing but insist it must be done through the proper legal channels. They also raise a practical concern: by circumventing the law, the Governor may have created more uncertainty. They argue that any developer who uses the order’s rollbacks (like the 2020 energy code) could be sued by a third party, potentially halting their project and leading to costly delays.
A Sudden Twist and the Path Forward
The legal challenge has already had a major impact. In a significant development, Natural Resources Secretary Julie Moore announced that her agency would not immediately implement the controversial wetland changes.
Instead, she will pursue those changes through the formal, and much slower, administrative rulemaking process. According to Seven Days, Secretary Moore acknowledged the legal risk, stating that the order’s approach could “be self-defeating” if it creates more uncertainty for developers.
This partial retreat highlights the practical and legal vulnerabilities of the order. For Vermonters, the entire dispute now appears to be heading down three potential paths:
The Judicial Path: The coalition may sue the state. This would likely send the case to the Vermont Supreme Court, which would be forced to rule definitively on the scope of 3 V.S.A. Chapter 41. Such a decision would set a major precedent for the power of all future governors.
The Legislative Path: When the General Assembly reconvenes, it can exercise its power under that same statute. Lawmakers could pass a “resolution of disapproval” to nullify the remaining parts of the executive order, such as the energy code rollback.
The Collaborative Path: The administration, legislative leaders, developers, and environmental advocates could sit down to negotiate a legislative solution. This is the path the order’s opponents say should have been taken from the start, arguing that a durable solution to the housing crisis must be found with the democratic process, not in spite of it.