Carla Occaso
MONTPELIER — There is more than one way to entice housing developers to Montpelier. That was the word at the Sept. 9 city council meeting where City Manager Kelly McNicholas Kury introduced the subject of adjusting Montpelier’s building fee schedule. This was in response to an earlier request for the staff to research permits and fees as they relate to the budget revenues and expenses. But the Housing Committee has an alternate proposal, McNicholas Kury said.
The current municipal budget anticipates an annual revenue of $35,000 in zoning fees and $100,000 in building fees. These do not include water and sewer hookup fees.
Planning Director Mike Miller presented information on the recent trends for income and expenses relating to zoning and building fees. He said the city collected $200,000 in building fees in 2019, but that dropped to $100,000 in 2020 at the start of the COVID-19 pandemic. And then there was a dip in 2021 through 2025, but this year was “a very robust building year,” Miller reported, with the projected revenue of $35,000 collected in zoning fees.
Miller proposed lowering building fees from $8.50 per $1,000 of construction cost to $8.00 per $1,000 to match the state of Vermont permit fees. He also suggested switching to a fixed cost (such as $200 for a residential unit plus $150 for each additional unit).
Councilor Paul Costello asked if developers have been complaining about fees. He said he has heard developers want clarity and “rapid answers.”
Miller said developers don’t complain when they come in to get permits, but they do complain in public hearings.
“We do have a bad reputation, and we have difficulty getting rid of that perception. We issue administrative permits within five days — some the same day,” Miller said. Developers are delayed when additional studies are needed, such as “deep slope studies” and things that must be determined by engineers, he added.
Costello said public appeals against development are also a concern. “Some housing projects drag on for eight years,” he said.
Following Miller’s presentation, former City Councilor Lauren Hierl, vice chair of the Montpelier Housing Committee, suggested offering a “fee holiday” to allow developers to build without paying for permits “given the challenge of inadequate housing.” This could combat the “broader narrative” that Montpelier is a harder place in which to build than are other communities. Hierl suggested implementing a three-year fee holiday to incentivize housing in order to bring “new children to our schools and foot traffic to businesses.”
Councilor Jim Sheridan noted that while zoning fees only bring in $35,000 to the overall budget, that money adds up if you combine all permits and fees.
“I would like you being a former councilor who knows that we are not going to be the only people asking for a reduction. … this is going to fall on the people. I am concerned about putting money in big developers’ pockets who are richer than most everybody else in town,” Sheridan said.
Sheridan also said offering 20 acres for $1 is already a generous incentive, referring to the RFP that went out to potential developers of the city-owned Country Club Road property. Creating a fee holiday would put the cost of building on the “back of the taxpayers and this is a high tax city.” Housing has been opening up in town, anyway, Sheridan said. “There hasn’t been this many apartments available since the ‘90s,” he said, adding that six apartment units had been posted on Zillow the previous day.
Costello suggested possibly waiving fees on a case-by-case basis. McNicholas Kury said they have offered tax stabilization to some developers, and Miller noted they offered permit fee holidays in the wake of emergency flood rebuilding. Councilor Ben Doyle said he would like to increase the tax base by increasing housing.
Councilor Pelin Kohn suggested going with Miller’s proposed fee structure while also considering other incentives. The city needs to attract developers while at the same time making responsible budget decisions, she said.
The city council then voted unanimously to approve the revised fee structure as presented.
