Council overrides Elrich veto on bill for Metro development tax incentives

Council overrides Elrich veto on bill for tax incentives for Metro station development

Hucker, Jawando disagree with council majority

| Published:

The Montgomery County Council overrode County Executive Marc Elrich's veto on a bill that would provide a tax break for housing developers for constructing high-rise buildings on top of Metro stations.

File photo

The Montgomery County Council won a tug-of-war with County Executive Marc Elrich on Tuesday, overriding his veto of a bill giving tax incentives to developers for constructing high-rise buildings on top of Metro stations.

The council voted 7-2 in favor of the override of Elrich’s Oct. 16 veto, which is the first veto he has made in office. A minimum of six votes was needed for the override.

The council’s majority vote was the same as the one that approved the measure on Oct. 6.

The bill would provide a break on property taxes to eligible developments for 15 years.

The county has estimated that at least 8,500 housing units could be developed at Metro station properties, which currently have no high-rise buildings. Up to 1,300 of those units could be affordable housing.

Elrich and the council have battled over whether the incentives are a way to jump-start development and expand the supply of affordable housing or an unnecessary giveaway to developers.

Council Vice President Tom Hucker and Council Member Will Jawando voted against overriding Elrich’s veto.

The two council members were also the only members to vote against approval of the bill on Oct. 6, citing concerns of county budget projections, loss of property tax revenue and whether it was the best way to incentivize housing.

The county is collecting no property taxes on Metro property that Washington Metro Area Transit Authority (WMATA) owns.

Council Member Craig Rice said he was disappointed that Elrich did not call him to say why he was vetoing the bill. Rice noted that former County Executive Ike Leggett would call each council member to explain each veto while he was in office.

“I’m wondering what would be the purpose of vetoing a bill if you never even bothered to pick up the phone to say, ‘Hey, this is what I’m thinking and why I’m really concerned about why this bill is moving forward and why I would hope you would do something else,’” Rice said.

“For me, it’s kind of an exercise in futility. It really is a case for him to write a letter and put it in [the] public to try and chastise and make us look bad without even talking about the very issues that are before us that we’re debating that are valued on both sides of the fence.”

Elrich told Bethesda Beat in an interview Tuesday night that Rice’s allegation that there was no communication was not true. He said he spoke with nearly every council member, including Rice, before the council initially voted on the bill.

“I think I was pretty clear I was going to veto it. … I raised this with a number of council members that I didn’t think it was a good idea,” he said.

Elrich said he specifically told some council members that he would veto it.

“It’s a lot of money that we don’t have in a time that we’re going to be hard put for revenues. It just doesn’t make any sense at all, especially for market-rate housing,” he said. “I just hope the council knows where to draw the line because the more revenues we give up, the harder it is to meet the needs of the residents of the county. It’s not like it’s a few hundred thousand dollars. This is significant money we’re talking about.”

Elrich said no council members attempted to contact him after he sent the veto.

“I vetoed one thing and I’m hardly on a string of running vetoes,” he said.

Jawando said during the meeting on Tuesday that the bill wasn’t urgent and officials could wait and see what happened to market demand. There have been developments on WMATA property in the past, he said, and high-rise developments across the street from some Metro stations are doing well.

“We’re subsidizing the highest-cost, highest-rent housing with very, very limited affordability requirements. … I think we should have done more for the taxpayer in this instance and current law would have allowed for that,” he said.

The cost for developing the Metro station properties is not the same for each project, Jawando said, which means county staff members should have been able to decide the amount of tax abatement for each project.

Jawando previously proposed an amendment — which failed 6-3 — that would have let the county’s Department of Housing and Community Affairs review development projects on Metro sites and determine how much of a tax abatement each project would get. A minimum of 80% of an abatement would have been required and the review would have had to be done within 90 days.

“If you don’t like Marc Elrich, get in line,” Jawando said. “He’s going to be here for two years, maybe . These tax credits are going to last well past many of our time on the council and maybe even some of our lives. We have to do what’s right for the future and allow government to do its job and kick the tires for the cost that this is going to have for our residents.”

Hucker said the legislation was more “sweeping” than he was comfortable with.

“We have a very uncertain budget picture at all levels — the federal level, the state level, the county level. This might turn out to be a great idea, but there’s no need necessarily to enact it right now until we know in particular what’s going to happen with Question A and Question B,” he said, referring to two ballot questions for the general election that could change the county’s tax policy.

Council Member Hans Riemer, a co-lead sponsor on the bill, said Metro station properties have property that could be developed, but hasn’t been touched in decades.

“If we don’t pass this incentive, I truly believe we will not get that housing for years, decades or longer — perhaps never,” he said. “This plan we passed will not only deliver housing, but office building sites, shopping destinations, so many other key quality of life indicators that our community is really seeking.”

Council President Sidney Katz and Council Members Gabe Albornoz and Evan Glass said the bill wasn’t perfect, but there is a housing shortage and more is needed to attract more people to the county.

Briana Adhikusuma can be reached at briana.adhikusuma@bethesdamagazine.com.

Back to Bethesda Beat >>

Leading Professionals »

Newsletters

* indicates required

Dining Guide