Montgomery County officials will take up legislation to reward developers that build commercial and residential high-rise buildings over Metro stations.
The bill, which will be introduced at Tuesday’s council meeting, calls for a developer to make payment in lieu of taxes to build on property leased by the Washington Metropolitan Area Transit Authority, or WMATA, at the 13 Red Line stations.
In return, the county would “exempt 100% of the real property tax that would otherwise be levied for a period of 15 years beginning in the year a use and occupancy permit is issued for qualifying development,” according to a staff report.
During a press conference on Monday, Council Member Hans Riemer, who spearheaded the bill, said the legislation could lead to the construction of buildings of at least eight stories, with around 8,600 new housing units ¬— 1,300 of which would be for the county’s affordable housing programs.
“If you go to most Metro stations in Montgomery County, you’re going to see surface parking lots and parking garages where we should have high-rise housing,” he said. “The problem is the market is not working to support the development of new high-rise housing. We have got to change the game for development at Metro sites. If there’s one place that we can all agree that we want as much housing as possible, it’s on top of a Metro station.”
There is a regional housing shortage, Riemer said, and the legislation is a solution that has regional potential. High-rise buildings could also include day cares, restaurants and cafes.
“That’s never going to happen unless a private sector entity is willing to take a risk and build here and if they can make enough profit to justify it,” Riemer said.
Council Member Andrew Friedson, co-lead sponsor of the bill, said the question isn’t whether the county can afford to do it, but whether it can afford not to.
“Are we going to let them stand as concrete and asphalt for parking? Do we want these sites to be places for parking or places for people?” he said. “This is a gateway. Every Mmetro site is a gateway for communities in which they’re located. … We need to make the choices today and not leave these things to chance.”
It’s expensive to build on top of an underground Metro station because of the infrastructure underneath the ground.
The key to the incentive is high-rise development — at least eight stories, Riemer said.
“The reason is it becomes very expensive to build at that level. So we would extend Metro’s property tax exemption to new development for 15 years for high-rise development on top of the Metro at Metro stations,” he said.
If the legislation passes, each eligible development could automatically take advantage of the incentive.
“We would certainly also review each development for a lot of different issues and we would perhaps find ways to increase affordable housing at each development,” Riemer said.
Although the county wouldn’t be collecting property taxes from the new construction for 15 years, Riemer said the county already doesn’t collect it from WMATA property anyway. People who live in the housing would still pay income taxes to the state and county, and developers would pay impact taxes to the county.
“There’s still a tax collection that’s coming in that’s very substantial,” Riemer said.
He said the county would continue to wait for developers if it didn’t decide to provide an incentive.
“Are we going to wait 20 or 30 more years for the kind of housing on Metro station sites that we know we need?” he said. “I don’t think we should. We should be moving now to make sure that we get that housing delivered as soon as possible.”
County officials approached WMATA with the idea for an incentive about three months ago, Riemer said.
Friedson said transit-oriented development doesn’t happen by chance. The government and private sector has to partner and collaborate to “make the economics actually work,” he said.
“We cannot achieve that if we don’t maximize the full potential of Metro station housing right on top of the most sustainable place to put housing — right on top of the most significant public investment that we make in our community, on transit.” he said.
Council Member Evan Glass said at the press conference that the legislation would have environmental impacts, as well.
“Once we have a vaccine for COVID-19 and people return at record numbers to taking public transportation, we are once again going to be concerned about the Earth’s health,” he said.
“Transit-oriented development is a way that we can reduce carbon emissions and help protect the Earth for generations and millennia to come.”
Briana Adhikusuma can be reached at email@example.com.