Vermont’s Governance Gridlock: How a Housing Standoff Exposed the State’s Structural Paralysis
While headlines have focused on political fighting, a deeper look reveals a more significant issue: until the process itself is updated, Vermont remains powerless to act on its most pressing issues.
In late 2025, the State of Vermont found itself in a constitutional bind. On one side sat Governor Phil Scott, attempting to use his executive authority to slash regulations and address a desperate housing shortage.
On the other sat Attorney General Charity Clark and the state’s legislative leadership, arguing that the Governor’s actions violated the separation of powers.
While other headlines have focused on political fighting, a deeper look reveals a more significant issue: Vermont’s government structure may be too rigid to handle modern, slow-moving emergencies.
This report explains how Executive Order 06-25 was signed, why it was blocked, and why the ensuing stalemate highlights a need for structural reform to prevent future paralysis.
The Catalyst: A Housing Emergency
To understand the legal battle, one must understand the economic reality that preceded it. By the fall of 2025, the Governor’s administration identified a “severe housing shortage” as a threat to the state’s economic viability, formally citing a need for decisive action to address the crisis.
Official estimates indicated that Vermont needs between 30,000 and 40,000 new housing units by 2030 to meet demand. As a result of this scarcity, the cost of housing has escalated, with median home prices doubling in the last decade.
Governor Scott’s administration argued that this inflation was driven not just by market forces, but by a web of regulation that adds time and expense to projects. Specifically, the administration criticized the 2024 energy codes and wetland rules for effectively banning the construction of affordable “starter homes” by making them too expensive to build.
The Action: Executive Order 06-25
Frustrated by what he viewed as legislative inaction and a budget stalemate, Governor Scott signed Executive Order 06-25 on September 17, 2025. The Order was a directive intended to bypass standard regulatory timelines to lower building costs immediately.
The Order attempted two major changes:
Energy Code “Option”: It directed that builders should have the option of complying with older, less expensive 2020 energy standards rather than the stricter 2024 Residential Building Energy Standards (RBES).
Wetland Deregulation: It sought to make housing an “allowed use” in certain wetland buffer zones, removing the need for time-consuming permits in designated growth areas.
The Legal Blockade: Why the Order Failed
The response from the state’s legal apparatus was swift. A coalition of environmental nonprofits and legislative leaders formally requested a legal review, questioning the Governor’s authority to unilaterally change environmental protections.
Attorney General Charity Clark issued a legal opinion concluding that the Executive Order was unenforceable. Her reasoning was not based on housing policy, but on the Administrative Procedure Act (APA).
The “Force of Law” Doctrine
Under the APA, once a state agency adopts a rule (like the energy code), that rule has the “force of law” and is binding upon the agency and the public.
Attorney General Clark’s opinion rested on a strict interpretation of Vermont law:
Rulemaking requires process: To amend or repeal a rule, the state must go through a formal process involving public hearings and legislative review.
No shortcut: A Governor cannot simply sign a piece of paper to suspend a law, even if he believes the law is burdensome.
No “Emergency” Declaration: While Vermont has laws allowing the suspension of rules during disasters, the Governor did not invoke these specific “Title 20” emergency powers, likely because legislative oversight of emergency powers restricts them to acute disasters like floods, rather than chronic economic issues.
Consequently, the Attorney General’s opinion is legally valid. It protects the democratic process by ensuring that one person cannot rewrite laws behind closed doors.
The Result: Bureaucratic Revolt and Paralysis
The strength of the Attorney General’s opinion was proven by what happened next: The Governor’s own agencies refused to fully implement his order.
The Agency of Natural Resources (ANR) and the Department of Environmental Conservation (DEC) issued implementation guidance stating that current wetland rules remain in effect.
This created a unique form of governance paralysis:
The Executive commanded deregulation.
The Attorney General declared it illegal.
The Bureaucracy prioritized statutory compliance over the Executive Order to avoid legal liability.
The Legislature was out of session and unable to intervene.
The outcome was a stalemate. Municipalities like South Burlington were left aware of challenges to the Order’s validity, leaving developers uncertain about which codes applied and nullifying the immediate cost relief the Governor sought.
Structural Reform: The Path Forward
This episode exposes a vulnerability in Vermont’s “citizen legislature” model. The state faces a full-time crisis (housing) but relies on a part-time legislature and a procedural system designed for stability, not speed.
The Attorney General was doing her job by upholding the law, and the Governor was attempting to do his job by solving a crisis. Yet, the system pitted them against each other, resulting in inaction.
What Happens Next
Without structural changes, this cycle of executive overreach and legal blocking is likely to continue.
Immediate Future: The 2024 energy codes and wetland rules remain the law of the land. Builders must comply with them, despite the Governor’s objections.
Legislative Return: When the General Assembly reconvenes, the battle will likely return to the Budget Adjustment Act, where legislators have previously raised concerns about the Governor’s use of housing funds.
Long-Term Reform: This standoff suggests Vermont may need to explore structural reforms. This could include creating a streamlined mechanism for “emergency rulemaking” that addresses economic crises without violating the constitution, or moving toward a more full-time legislative body capable of responding to issues year-round.
Until the process itself is updated, Vermont risks remaining powerless to act on its most pressing challenges.