Senate committee debates municipal zoning changes, manufactured/modular housing and owner‑occupation rules; agrees to delay contested lines

The Senate Economic Development, Housing & General Affairs committee spent sustained time May 22 on Section 9 of S.328, which would amend municipal zoning to address mobile, modular, prefabricated and manufactured housing and to require some multiunit dwellings (four units or fewer) to be a permitted use in districts served by municipal water and sewer.

One committee member read the proposal aloud: "In any district that is served by municipal water infrastructure that allows residential development, multiunit dwellings with 4 or fewer units shall be a permitted use on the same size as a single unit dwelling." Members debated whether that default (permitted use) would spur small infill development or force municipalities to demand larger developments and thereby stall projects.

Senator Ron Hinsdale's proposed amendment would restore several provisions from S.775, including permitted use language and owner‑occupation/occupancy provisions. Supporters argued the language prevents neighbor‑driven delays that have stopped Habitat for Humanity and other infill projects; opponents and some Natural Resources committee members said they lacked time to take further testimony and were concerned about scope and unintended demands on municipal planning commissions.

On accessory dwelling units (ADUs) and owner‑occupation rules, members disagreed about whether ADUs financed with public dollars should require owner occupation and whether duplexes or triplexes should be so restricted. One member summarized the trade‑off: allowing non‑owner‑occupied ADUs spurs investment and production but can change neighborhood character in high‑second‑home communities.

Alex Farrell, Commissioner of the Department of Housing and Community Development, phoned in to explain the agency's view on advance funding for projects and said the department would exercise any authority to advance funds "very sparingly." Farrell also described how partnership organizations could be involved in recapturing funds if projects default.

After extended discussion and given calendar pressure, members proposed striking the contested lines for the current year but adding a report‑back or sunset so the issue can be revisited. One member proposed keeping permitted‑use language but adding a sunset or requiring a report back next year; others preferred simply striking contested subsections until joint testimony can be taken. The committee paused to go to the floor and planned to return with staff‑drafted amendments.