County’s Affordable Housing Program Is Getting Its First Major Update in More Than a Decade

Riemer’s bill requires more lower-cost units in affluent areas; Floreen’s gives county officials added flexibility

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The county's moderately-priced dwelling unit program provides lower-cost homes to rent and buy.
VIA MONTGOMERY COUNTY

The county’s decades-old affordable housing program is in for some changes, designed to give county officials more freedom in bargaining with developers and increase the number of modestly priced homes in affluent areas.

The County Council last week passed two bills that reshaped the moderately priced dwelling unit program founded 45 years ago to integrate workforce housing into larger development projects. One of the proposals, introduced by council member Nancy Floreen, takes a sweeping look at the program, allowing the county’s housing department to exercise greater flexibility in determining the location, size and type of affordable housing units.

“The whole objective of all this is to maximize housing for people of moderate means, and the department, they didn’t have a lot of negotiating ability with the providers of housing,” Floreen said.

The second bill, brought by council President Hans Riemer, raises the bar for developers to provide affordable housing in wealthier parts of the county. The general standard calls on developers of 20 or more homes to make at least 12.5 percent of their housing units affordable to low- or moderate-income families, although the county is pushing for 15 percent in certain parts of the county, such as downtown Bethesda and the Rock Spring area. Riemer’s proposal would also apply the 15 percent standard in other affluent parts of the county–right now, those would include North Bethesda, Potomac, Travilah, Darnestown and the Lower Seneca and Goshen planning areas.

“The overall goal is to promote economic integration,” he said. “To mitigate against concentrations of poverty and to open the door for attending schools where families of low to moderate incomes just wouldn’t be able to buy a home.”

 

Riemer’s bill would raise the affordable housing requirement to 15 percent in more affluent areas of the county, shown here in light yellow. Credit: Montgomery County government.

Through the affordable housing program, more than 5,400 modestly-priced units currently exist in the county, some of them rentals, some of them owned by individuals or nonprofits and some of them owned by the Housing Opportunities Commission. These lower-cost homes are accessible to people of modest means—the income guidelines cover a three-person household with an annual income of up to $74,000, so teachers, police officers and professionals early in their careers might qualify.

But the laws governing the program haven’t seen a significant update in about 13 years, according to a county press release. Floreen said about a year of work went into the proposal that cleared the council last week.

Among other things, Floreen’s bill would:

  •         Enable the county’s housing and community affairs department to calculate the required affordable housing in terms of square footage rather than unit count;
  •         Give the department more leeway to accept payments or approve offsite affordable housing in lieu of incorporating moderately priced units into projects;
  •         Require developers of smaller projects–between 11 and 19 housing units–to pitch in by paying into the county’s Housing Initiative Fund; and
  •         Simplify the rules for how the Montgomery County executive should set the sales price for moderately priced units.

Council members voted unanimously in favor of both bills during last Tuesday’s meeting following a lengthy discussion that delved into some of the alternatives to the affordable housing requirement. In certain cases, builders can pay a fee–which Floreen’s bill sets at 3 percent of the sale price of each market-rate unit in a project–instead of building the lower priced homes. In others, the developers can put the lower-cost homes somewhere outside their project site.

However, many officials and advocates want to safeguard against these alternative options becoming commonplace, since the overarching goal is to weave affordable housing into each neighborhood rather than concentrating it in certain places.

Floreen’s legislation makes it easier for county housing officials to work out these alternative arrangements with developers, but she and housing officials assured council members that the substitutes would only be used in rare cases.

“I do want to say that alternative payment is an exception to the exception to the exception. This is not something we do every day,” Clarence Snuggs, director of housing and community affairs, said last week.

A 2017 report showed the alternatives had only been used for 29 projects in the moderately-priced dwelling unit (MPDU) program’s history and only three times since 2008.

“Our absolute preference is to have the units onsite,” Stephanie Killian, who heads the division of housing, said. “If we can’t, our second preference is in the immediate area. … But there are instances when the MPDUs would not be affordable to MPDU purchasers, and in those instances, we need to have some flexibility to solve that problem.”

In one recent case, she said, the $600-per-month condominium fees in one community would’ve made living there too expensive for a person of moderate income.

However, Floreen’s bill does stipulate that offsite affordable units have to be in the general location of the project in question or the council must be notified. There’s a similar rule for the alternative payment: Either it must be spent on supplying moderately priced homes in the vicinity of the original project or the council is alerted.

Robert Goldman of the Montgomery Housing Partnership, a nonprofit housing developer that seeks to increase the availability of affordable homes, said his group generally supported both pieces of legislation.

One plus is that allowing county officials to assess the affordable housing requirement based on square footage rather than unit count could result in the construction of larger homes more suitable for families, he said.

He said his organization did have some concerns about easing the rules for alternative options.

“We wanted to make sure that there were enough safeguards so people weren’t totally buying out of units or doing them outside the planning areas,” he said.

The requirement for council oversight in outlier cases largely allayed these reservations, he said.

And Riemer’s bill could open the door for more middle-earners to move into affluent parts of the county, he added. Still, Goldman said he’d like to see the 15 percent requirement cover the entire county.

Riemer said he’d given the idea consideration but concluded that a blanket hike could stifle growth in less expensive areas.

“The last thing we want is for housing construction to shut down in communities that are affordable,” he said.

One of his primary objectives is to create more educational opportunities, he said, pointing to a 2010 study that found economically integrated communities support academic success.

County Executive Ike Leggett was generally supportive of both affordable housing proposals and is expected to sign both into law.

Bethany Rodgers can be reached at bethany.rodgers@bethesdamagazine.com.

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