Neighborhood Development Areas

Since the 1970s the state has promoted development policies and programs that maintain and enhance Vermont’s historic development pattern of compact centers surrounded by a rural landscape. The Neighborhood Development Area program builds on this tradition by providing special permit and tax incentives for communities and developers that commit to building mixed-income housing within and adjacent to designated downtowns, village centers, new town centers, and growth centers. 

Program Essentials

The Neighborhood Development Area designation encourages municipalities and/or developers to plan for new and infill housing in the area within walking distance of its designated downtown, village center, new town center, or within its designated growth center and incentivizes needed housing, further supporting the commercial establishments in the designated centers. 

Areas eligible for designation must be within a neighborhood planning area defined as an area surrounding an existing state designated area, extending a 1⁄4 mile from village centers, and new town centers, and a 1⁄2 mile from downtowns (and areas within designated growth centers). Mapped neighborhood planning areas may be viewed at the Vermont Planning Atlas. Please set up a meeting with staff before submitting an application.

• Neighborhood Development Area Annual Report
• Neighborhood Development Area Designation Guidelines - guidance document for applying for and maintaining designation.
• Neighborhood Development Area Application (WORD) - fillable application form.  Use it to determine if ready to apply for designation

The benefits of Neighborhood Development Area designation include:   

• Qualified “mixed income” projects are exempt from Act 250 regulations  (To help find out if a project qualifies as a priority housing project that is exempt from Act 250 click here)
• Act 250 projects not qualifying for the exemption receive a 50% discount on application fees
• Agency of Natural Resources fees for wastewater review are capped at $50.00 for projects that have received sewer allocation from an approved municipal system
• Exemption from the land gains tax
• Limitation on appeals of conditional use permits for residential development
• Municipalities receive priority consideration for state grants

For those seeking NDA designation in a village without a sewer system, a community or alternative wastewater system approved by the Agency of Natural Resources is required.  ANR approval may be obtained at the conceptual stage, prior to permitting, in keeping with this policy.