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Gov. Phil Scott signs housing package into law, creating new infrastructure program

A three-unit housing project under construction this month in Essex.
April McCullum
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A three-unit housing project under construction this month in Essex.

This story, by Report for America corps member Carly Berlin, was produced through a partnership between VTDigger and ¿ªÔÆÌåÓý.

Gov. Phil Scott has signed this year’s housing package into law, creating a new financing tool for infrastructure that supports housing construction and enshrining stronger fair housing protections for immigrants.

The marquee policy in the bill, , is the Community and Housing Infrastructure Program, which is intended to help cover costly infrastructure upgrades that are needed to make residential development possible.

Essentially a smaller-scale version of Vermont’s existing tax increment financing program, CHIP like roads, sidewalks and sewers for a housing project � and then use the increased property tax revenue from the homes to help pay back the debt.

If developers and municipalities take advantage of CHIP to its full extent, the program has the potential to unleash $2 billion in infrastructure spending over the next decade � a level of investment that proponents believe could help move the needle on Vermont’s severe housing shortage.

The bill’s passage was far from assured. The new infrastructure program was the subject of � � debate among lawmakers before most went home in late May. House Democrats pushed hard for more guardrails to the new initiative. Their primary concern was that any new development that might have occurred even without help from the tax incentive would result in foregone property tax revenue to the overstretched Education Fund.

Viewed through an open door, three men wearing suits sit at a cluttered committee table
Brian Stevenson
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¿ªÔÆÌåÓý
Reps. Charlie Kimbell, Marc Mihaly and Mike Marcotte participate in housing bill negotiations on behalf of the House on May 30, 2025.

The Senate � and the Scott administration � had pushed for fewer rules, arguing that a more flexible version of the initiative would help add more homes to the statewide grand list and spread out the burden of rising education costs. A new coalition of housing advocates, Chamber of Commerce lobbyists and the Vermont League of Cities and Towns also pushed for a less strict version of the initiative.

Lawmakers ultimately landed somewhere in the middle � significantly raising favored by House Democrats, but retaining a version of to determine whether a project would have happened without the public financing boost.

That proved enough to earn the Republican governor’s signature. But the infrastructure financing program is the only significant piece of that lawmakers followed through on this year.

The Scott administration had vied for changes to the municipal appeals process for housing projects. But legislators failed to agree on reforming how and when neighbors can challenge housing developments in court, vowing to return to the issue next year once they’ve received a report back . Scott had seen more room to amend the statewide development review law � which lawmakers � but legislators showed little interest in revisiting the subject this session.

S.127 also contains new housing protections for immigrants living in Vermont who lack legal status.

It adds citizenship and immigration status to the list of protected classes in Vermont’s fair housing laws, prohibiting discrimination on those grounds when someone is seeking to rent or buy a home.

The legislation also mandates that a landlord needs to accept a range of forms of identification on a rental application in order to conduct credit and background checks � not only a Social Security number. Several immigrants testified at the Statehouse this session that when they couldn’t provide the identifier. The advocacy group Migrant Justice pushed for the new protections.

The eclectic legislation also includes measures aimed at streamlining development on contaminated brownfield sites, a future study that would look at creating a statewide land bank for buildings that have fallen into disrepair, and a report on housing needs for people with developmental disabilities.

Carly covers housing and infrastructure for ¿ªÔÆÌåÓý and VTDigger and is a corps member with the national journalism nonprofit Report for America.

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