Rural Development's Silent Killer
Decentralized septic is crushing small-scale developers' efforts to build up our rural Main Streets.
Hey — Jonah here. This is Brick + Mortar where I talk about the acquisition, financing, design, construction, and operations of small-scale real estate development projects.
Here’s a shitty stat for you (pun most definitely intended).
Only 125 of Vermont’s 355 villages are connected to a municipal sewer system.
That’s right.
65% of our village centers (and 55% of our households) rely on decentralized septic systems for wastewater disposal.
Not only is this well above the national average of 25% [households reliant on decentralized systems]. But Vermont actually has the highest ratio across the entire country.
You might be thinking — big whoop! Vermont has a ton of land, this shouldn’t be an issue.
Welp, buckle up.
Let me show three examples of why decentralized septic is one of the largest obstacles hampering smart growth across our state.
Example #1: Restricting the use of a downtown building
512 Main was a vacant gas station a few partners and I purchased in 2023. We’re converting it to retail space and are wrapping up construction this spring.
It’s the perfect location for a food business and our initial goal was to find an operator during construction to do just that.
As luck would have it, we had interest from three different concepts: a wood-fired pizzeria, a taqueria, and a bakery.
All three would have been a home run for our village center.
To convert uses, we would clearly need a new septic system with more capacity and a built-in grease trap so we brought in our septic designer and the state septic engineer for a walkthrough.
We started to get excited — imagine all the activity that would be generated by having just one of these businesses in town!
Our buzz didn’t last very long.
Nowhere on the 9,000sf site is there apparently a suitable location for a new septic. No exceptions. Just a definitive denial of change in use.
Sure, retail will be just fine there. But there’s a real opportunity cost to not having the ability to put a restaurant or similar use that promotes social gathering and interaction.
What’s most disheartening is that this is the type of business that the community is clamoring for.
We have the site, the funding, and the operators — a trifecta that rarely comes to fruition here. Yet, we end up being derailed by the inability to get rid of some wastewater.
Example #2: Taking up an inordinate amount of land
The site plan above irks me.
In a town with municipal sewer, the 1.5 acres behind 501 Main become easily developable. The land is on Main St and in the zone earmarked for dense, residential development.
But, in Fairlee, the conversation ends there.
Between 501 Main, Chapman’s General Store, and the apartments at Chapmans, we were required to install three separate septic systems and dedicate enough land for the replacements of those systems should the originals fail.
Not only does this add $75,000+ in cost to our combined development efforts, but it effectively eliminates any future development on the back lot.
That’s roughly 30 housing units forgone.
And tens of thousands in additional tax revenue.
Not to mention the hundreds of thousands (more?) in lost economic activity.
Vermonters are proud of their staunch aversion to sprawl (me included). But the irony is that this is exactly the policy being inadvertently promoted. By drastically inhibiting our ability to develop dense projects in our village centers, we’re forced to build outwards.
Example #3: Limiting the size of Main St infill developments
Across the street from the above example (and directly adjacent to the gas station at 512 Main), we’re in the early stages of designing a 3-story mixed use building.
Again, this is an area designated by the town for dense development.
Quick caveat — the above site plan was sketched by me using ratios of leech fields to apartments that I’ve installed elsewhere.
It’s very rough but illustrates the point:
Instead of the continuous line of buildings you might expect driving down Main St, we’re instead left with a gaping hole on the south end of the lot.
But green space is good! — you might be thinking.
I agree. But we already have a half-acre park directly across the street.
If it were up to me, I would much prefer to have some retail and housing occupying that space. Main St is supposed to be an economic corridor, not a dead zone where there are more parks than residents to enjoy them.
Case in point — we actually worked to turn that same vacant site into a pseudo park a few years ago with benches, a gazebo, murals, and trees. And 99% of the time it gets zero use.
So now, even after we spend $3m+ redeveloping the vacant site (where coincidentally there used to be a building occupying most of the lot), we’ll be left with the equivalent of a missing tooth alongside our nice new set of veneers.
So, what’s the solution?
The solution is obvious.
Getting there is the hard part.
Not only does it take years of planning and good leadership, but there are several other obstacles to overcome:
Site selection
Funding for both planning and implementation
Buy-in from the community, particularly around the issuance of a bond
BUT —
From the sounds of it, there doesn’t seem to be any shortage of state and federal funding available to municipalities. Especially given the urgency in addressing the housing crisis.
Warren, VT was actually made into a national case study by the EPA for their success in implementing a municipal sewer system. It’s worth a read.
Until next time.
— Jonah 🧱
P.S. Want to connect? Find me on LinkedIn.
And Jonah on top of this the truth of the matter is that virtually every single town in Vermont has plenty of bonding power to make investments like this. But oh my God, we might add a nickel to the tax rate. Oh my God.
Red Clover bikes should move into 512! That is a gorgeous spot for a bike showroom.