Two Days After Signing the Act 181 Rollback, Scott’s Housing Chief Calls It ‘Not a Housing Bill’
A Compass review of the bill’s version history found it deleted housing expansions the Senate itself had written.
At a June 18 press conference two days after signing the partial repeal of Act 181, Gov. Phil Scott credited rural landowners and the broken supermajority for the reversal — then faulted lawmakers for stalling his housing proposals. His housing commissioner, Alex Farrell, said S.325 “does not represent progress on housing.” A Compass review of the bill’s version history found it deleted housing expansions the Senate itself had written.
Two days after he signed the partial repeal of Act 181, Gov. Phil Scott stood before reporters on June 18 and did little celebrating. He credited the rollback to the rural landowners who organized against the 2024 land-use law and to the narrower partisan margins that followed the November 2024 election, which broke the Democratic supermajority. He praised the Legislature’s reversal as an act of political nerve — it “takes courage to admit you’re wrong and be willing to change course,” he said — and then turned the event into a critique of what lawmakers have not done on housing.
The sharpest line came from his own housing chief. S.325 “is not a housing bill” and “does not represent progress on housing,” said Alex Farrell, commissioner of the Department of Housing and Community Development, who noted that several of the governor’s proposals were left out this year. Scott pressed the same point, faulting lawmakers for campaigning on the housing crisis while declining the permitting changes his administration seeks — among them a rejected rule to narrow the state’s wetland buffer from 50 feet to 25 feet, which the administration estimates would have cleared the way for roughly 2,000 housing units. (Compass will examine the wetland-buffer dispute in a separate piece.)
Senate Minority Leader Scott Beck, R-Caledonia, went further, casting the 2024 passage of Act 181 over Scott’s veto as a supermajority overreach and the rural backlash as long overdue. Vermont, he said, does not “need special interest groups and enviro groups to tell us how to manage land.”
The lawmakers who wrote Act 181 tell the story differently — and the bill Scott signed is narrower than either side’s framing suggests.
What Scott signed
Scott signed S.325 on the evening of June 16, repealing two of the most contested pieces of Act 181: the “road rule,” which would have required an Act 250 permit for private roads longer than 800 feet across much of the state, and the “Tier 3” review that would have added permitting scrutiny near headwater streams, habitat connectors, and other sensitive areas. Both were repealed before they took effect. Most of the act takes effect July 1, 2026; the new farm-business exemptions take effect a year later. (Office of the Governor; VTDigger / Vermont Public)
What survives is the deregulatory side of Act 181 — the Tier 1A and Tier 1B permit exemptions designed to speed housing in already-developed areas. Compass examined the bill’s version history when it cleared the Legislature in May: the final text removes the 2024 law’s conservation provisions while leaving its development exemptions intact, and along the way it deleted housing expansions the Senate itself had written into the bill.
S.325 reached the governor’s desk by an unusual route. It began the session as an unrelated study bill and was rewritten in committee into the vehicle for changing Act 181 — first to delay the law’s rollout, then, after the House Environment Committee acted in the spring, to repeal the road rule and Tier 3 outright. The House adopted the final conference report on a voice vote, with no roll call on that final step — though it had given the underlying repeal proposal near-unanimous approval weeks earlier, putting members’ support on the record. The Senate adopted it 28-2 on May 27 — after a 27-3 first vote and a motion to reconsider — with Sens. Martine Gulick, a Chittenden County Democrat, and Tanya Vyhovsky, a Chittenden County Progressive, the only recorded opposition. (VTDigger, May 7; Compass analysis)
Act 181 itself became law in 2024 over Scott’s veto, when the Democratic supermajority of the time passed it despite the governor’s objection that it leaned too far toward conservation and not far enough toward housing — the same objection at the center of this year’s rollback. (Vermont Public)
What the repealed measures would have done
Act 181 restructured Act 250, Vermont’s 1970 development-review law, around a tiered, map-based system. Tier 1 zones — generally downtowns and already-developed areas with existing infrastructure — were exempted or eased to encourage housing. The Tier 2 “road rule” would have triggered Act 250 review for private road construction over 800 feet in much of the state, aimed at limiting forest fragmentation. Tier 3 would have added review in mapped sensitive ecosystems. As the state rolled out draft maps over the past year, opposition from rural landowners, municipal officials, and housing advocates intensified. (VTDigger, May 27)
The final bill strikes Act 181’s road-jurisdiction and Tier 2/3 sections outright and repeals the related Tier 3 rulemaking and Tier 2 reporting requirements; the section-by-section breakdown is here.
The case for the rollback
Landowners who organized against the law argued its conservation measures amounted to an overstep of property rights set by distant planners, would devalue their land, and would make establishing new homesteads prohibitively expensive. The grassroots group that formed in opposition, which VTDigger reported in June is now called Rural Vermont Rising, says it has over 15,000 members in a Facebook group and is organizing local chapters. Sen. Russ Ingalls, R-Essex, who helped organize a March demonstration at the Statehouse, framed the movement as a lasting political force, saying rural Vermont “has found their voice.” Neil Ryan, a Corinth cattle farmer and a prominent leader of the movement, said after the signing that the Statehouse needs “a refresh or a reset.” (VTDigger, May 27; June 16)
The case for the original protections
The lawmakers who built Act 181 had cast the tiered system as a single bargain: loosen review where the state wants growth, tighten it where forests and water are most vulnerable. Rep. Amy Sheldon, D-Middlebury, chair of the House Environment Committee and an architect of the law, reversed her earlier resistance, telling colleagues on the House floor that the conservation measures “were alienating rural landowners and were not the right tool for the job.” She and other conservation-focused legislators have suggested future protections should rely on incentives rather than mandates. Sheldon, who faced intense online blowback this spring that drew a rebuke from legislative leadership, is not seeking reelection. (VTDigger, May 7)
The conservation advocates Beck alluded to — among them the Vermont Natural Resources Council and Audubon Vermont — had testified as the bill moved and have long championed the habitat and headwater protections Tier 3 would have established.
The signed bill does not close the conservation question so much as defer it. It funds a $30,000 study to design a future public-engagement plan — down from roughly $300,000 the Senate’s version had carried for model housing plans and Tier 3 public engagement — and it creates a standing Joint Legislative Environmental Oversight Committee of six lawmakers, three from each chamber, with continuing oversight of the Land Use Review Board and Agency of Natural Resources permitting, set to sunset July 1, 2029. (Compass analysis)
Analysis
The dueling framings at the signing — a rural-rights victory on one side, a stalled housing agenda on the other — both describe S.325 without quite explaining it. The bill did not unwind Act 181. It unwound one side of it, and trimmed the other.
The 2024 law paired two moves: easing Act 250 review in places marked for growth, and adding review in places marked as ecologically sensitive. This year’s bill removed the second move — the road rule and Tier 3 — while leaving the first in place. That is the kernel of truth in Farrell’s “not a housing bill”: the housing side did not emerge enlarged. The Senate’s own version of S.325 had extended the existing Act 250 housing exemptions to 2030 and added a new exemption for designated village centers; the House cut the timeline back to 2028 and deleted the new exemption, and the conference committee restored neither. The deregulatory architecture that pro-development advocates wanted survives, but the additional housing tools the Senate had attached to this very bill did not.
Whether that means the bill does nothing for housing is contestable — supporters of the repeal argue that removing the road rule and Tier 3 itself clears barriers to rural homebuilding, and the Tier 1 exemptions that survive were Act 181’s central housing play. What is not contestable, on the version record, is that the bill ended the session carrying less housing policy than the Senate sent over.
For a developer building inside a designated downtown or already-developed area, the Tier 1 path remains open. For a rural landowner who would have faced new review for a long private road or for building near a mapped sensitive area, a permitting requirement that was set to arrive has been removed. For a Vermonter who valued the forest-fragmentation and headwater protections, those rules are not delayed but repealed, with replacement routed into a study whose outcome is undefined.
The repeal also leaves the question Scott raised in 2024 unanswered. The law’s housing targets and the regional Future Land Use mapping that determines where housing can be built with Act 250 relief are unchanged; Farrell has urged regional commissions “to be more expansive with their mapping” to meet those targets. The bill directs his department to report by Jan. 15, 2027 — after the next election — on whether the development exemptions already in law have produced primary homes, second homes, short-term rentals, or some mix. The rollback removed two conservation tools while commissioning a study to find out what the surviving tools are building.
The fight now moves to the ballot. Ingalls and others have signaled that the coalition built around Act 181 intends to stay organized through the August-to-November cycle, and several of the law’s original architects — Sheldon among them — will not be on it.
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