For more than 50 years, Montgomery County has required residential developers to set aside a specific percentage of units to be priced at rates affordable for those within certain income levels.
But as the county’s moderately priced dwelling unit (MPDU) program expands to include some communities and neighborhoods with household incomes that are 150% more than the area’s median income, county planners and local elected officials are questioning the program’s effectiveness at producing affordable housing.
The county’s MPDU program became effective in 1974 and is considered to be the first successfully implemented inclusionary zoning program in the country. According to the county’s Department of Housing and Community Affairs, the program aims to produce moderately priced housing, distribute low and moderate-income households across the county’s growth areas, expand and retain an inventory of low-income housing in the county and provide funding for future affordable housing projects.
Since the start of the program, 17,028 MPDUs have been produced from 1976 to 2023, according to the Department of Housing and Community Affairs. In 2023, 354 MPDUs were produced.
In a statement to Bethesda Today, Planning Board Chair Artie Harris said the MPDU program is “just one tool we have in our toolbox to meet the county’s housing goals.”
“Our county’s strength is in its diversity, and it is a priority for this Planning Board to help create opportunities for residents of all economic levels and backgrounds to live in vibrant neighborhoods with sought-after amenities,” Harris said. “When we are inclusive in our policies and laws, it can lead to better education, a healthier economy, and a stronger community for everyone.”
On Tuesday, the board sent a letter to the County Council outlining the new areas that were added to the program this year and their concerns about the program’s impact. The board suggested “it may be an appropriate time to review the current MPDU program to determine if changes are warranted to increase overall housing production and in turn more MPDUs,” the letter states.
Councilmember Natali Fani-González (D-Dist. 6), who served as a Planning Board commissioner from 2014 to 2021, also agrees it may be time to revise the county’s MDPU program.
“It was very revolutionary when [the MPDU program] was created in the ’70s. Maybe it’s time to update it and reflect on how it has done,” Fani-González told Bethesda Today.
In late January, the county Planning Board sent a list to the County Council of former and newly designated areas where new residential developments would be required to set aside 15% of units as MPDUs, representing an increase over the minimum requirement of 12.5% applied in other areas. The increased minimum in some areas is based on the median household income or was determined according to the county’s master plans for a given area.
New to the 15% requirement in 2025 are Olney, Poolesville, and the Kemp Mill and Four Corners communities in Silver Spring, according to planning staff. The communities join others tagged in 2024 with the higher requirement, which include Bethesda/Chevy Chase; Darnestown; Lower Seneca; North Bethesda; Potomac; and Travilah.
Other portions in the county are subjected to the 15% MPDU requirement based on master plans for those areas, according to planning staff. Those areas are covered by the Bethesda Downtown Plan, the Great Seneca Plan, the Takoma Park Minor Master Plan Amendment and the Silver Spring Downtown and Adjacent Communities Plan.
How effective is the MPDU program?
In 2018, the council passed legislation creating the 15% MPDU requirement for high-income planning areas where a minimum of “45% of the census tracts’ acreage [has] a median household income of at least 150% of the county-wide median household income,” according to county planning documents.
That means that each year, the Planning Board is required to designate the high-income planning areas for the 15% MPDU requirement based on county census data of the median household income.
County planning staff calculate the requirement using median income data for the county from the most recent five-year American Community Survey by the U.S. Census Bureau. According to planning documents, the most recent survey (which looked at income data from 2019 to 2023) determined the county had a median income of $128,733, and 150% of that median is $193,100.
So a minimum of 45% of the census tract area assigned to any given planning area must have a median income higher than $193,100 in order to be updated to the 15% MPDU requirement, documents state. For example, in North Bethesda, which has a 15% MPDU requirement, 55% of the census tracts assigned to the area have a median household income greater than $193,100.
During a late January board meeting, some Planning Board commissioners questioned the effectiveness and impact of the MPDU program while discussing sending the list of the newly designated areas to the council, as the board is required to do annually. In addition, the board noted in its council letter that Montgomery Planning staff recommended the council consider timing the January designation date for MPDU areas to better align with the release of the American Community Survey in July.
Commissioner Shawn Bartley said during the meeting he did not understand the reasoning behind increasing MPDUs in high-income areas of the county.
“It seems as though that if people are economically successful, they are called upon to have an increased density or affordable housing,” Bartley said. “And I find it curious that the more well-off the group of people [are], then their burden for MPDUs increases.”
Bartley also questioned whether an increase in MPDUs may cause the planning areas to “lose” their suburban characteristics and cause residents to move away. He noted the county needs to “come up with some kind of way where families can afford fair-market value houses.”
Board Vice Chair Mitra Pedoeem said she was also curious about how increasing the MPDU requirement may impact economic development in the designated planning areas.
Lisa Govoni, a lead planner with Montgomery Planning, noted during the meeting that planning areas that have the 15% designation have not seen much development – recently or historically.
“The exceptions would be North Bethesda, Bethesda, Chevy Chase and the master plan requirements through Silver Spring and Seneca – which are both fairly new,” Govoni said. “Later than 2018, we don’t have a lot of data that shows the impact of what the changes have been. This is largely because the number of units created [through the MPDU program] is pretty small.”
Govoni said an average of 300 moderately priced dwelling units – both rentals and for-sale units – are created each year and are primarily located in the down county area.
While the MPDU on paper “sounds good,” Pedoeem noted she is concerned that it may have the opposite impact of what planners intended.
Commissioner James Hedrick noted he viewed the MPDU program as an “economic integration” program rather than one focused on affordable housing.
“It’s not meant or designed to be an affordable housing program, or at least its practical outcome is not that we’re producing more MPDUs in Poolesville,” Hedrick said.
Hedrick also noted the MPDU program has become “counterproductive” due to the county’s “failure to address issues of zoning and construction and the supply of housing.”
“While we’re adding these [planning areas], we’re not getting any more MPDUs or any more affordable housing in Kemp Mill, Four Corners, North Bethesda, unless we do something to allow more construction in the first place,” Hedrick said.
He also argued the MPDU program was not a result of a lack of development but a result of exclusionary zoning.
“We have this [MPDU program that] we’ve topped onto it to attempt to assuage our guilt and what we are doing is assuaging our guilt, not creating more housing,” Hedrick said. “It’s an attempt at inclusionary zoning, but if it’s layered on top of an exclusionary system, it does not create anything new.”
Commissioner James Linden agreed, saying the change in designation to a 15% MPDU requirement indicates a “supply-constrained environment where households are generally getting wealthier because prices are being put up and moderate-income households are either leaving or getting priced out or out-bidded.”
Linden said the county needs to continue to evaluate policies concerning land use, zoning flexibility and diversity of housing types around the county. “This MPDU designation, it doesn’t exist in a vacuum. It’s evidence of the entire dynamic that we see,” he said.
A proposed solution?
On Tuesday, Fani-González and fellow councilmember Andrew Friedson (D-Dist. 1) introduced a legislative package that proposes allowing more residential building types – including duplexes, triplexes, townhomes and apartments – along the county’s transit corridors, with a requirement that 15% of the housing serve the local workforce.
The councilmembers are the lead sponsors of The More Housing N.O.W. (New Options for Workers) legislative package. The legislative package aims to increase access to more affordable workforce housing through two zoning text amendments, a subdivision regulation amendment and one bill that would change how developers of certain affordable housing are taxed.
The package’s introduction to the council follows the Planning Board’s passage last year of the Attainable Housing Strategies Initiative which outlines recommendations to the council for zoning changes in some single-family home zones in targeted areas of the county.
The attainable housing strategies proposal has sparked heated debate among public officials and community members. Critics cite concerns ranging from the potential destruction of neighborhood character to the belief that the suggested housing types would not be considered affordable for many potential homeowners. Proponents argue it would provide an effective way to increase homeownership opportunities for the middle class.
Friedson and Fani-González said Tuesday their legislative package was not based on the initiative but was inspired by the public conversations about it.
In addition, Fani-González told Bethesda Today that the legislative package does not address the MPDU program, but focuses on workforce housing, which she believes the county has “neglected.”
As for the MPDU program, Fani-González noted the county’s Department of Housing and Community Affairs is working with staff at Montgomery Planning on a report that is examining ways to “modernize” the program to “have a bigger impact.”
Fani-González said she expected the report may result in updates to the MPDU law. She likened the annual designation of areas to be subjected to a 15% MPDU requirement to a “Band-Aid to the whole system” and noted the MPDU program is not producing enough affordable units.
“So that’s another reason why the MPDU law needs to be revised and [we] see what kind of changes we need to make to ensure that we have more production of affordable housing besides the workforce housing,” she said.
