County Council supports ending residential building moratorium

Council supports ending residential building moratorium

Growth policy could change to address school capacity, traffic congestion

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This story was updated at 2:28 p.m. on Nov. 10, 2020, to correct that the council supports a countywide moratorium and to clarify support for an amendment.

Montgomery County is likely to end a residential building moratorium that restricts development projects in certain school neighborhoods.

The county’s subdivision staging policy (SSP) determines when school service areas have a building moratorium because schools are too crowded.

The growth policy is also meant to measure the adequacy of transportation infrastructure alongside projected growth and future developments.

The county’s Planning Board must review the growth policy every four years.

Over the last few weeks, the County Council has discussed potential policy changes during work sessions and by taking straw votes on specific proposals. Through straw votes, council members say whether they support proposals, but the votes are not official or binding.

On Tuesday, the council will have another work session on the proposal to discuss remaining recommendations. It will review the straw votes it has taken and discuss their fiscal impact.

The council is expected to officially vote on the changes on Nov. 16.

So far, the council has unanimously supported most proposed changes to the SSP. The largest potential change is removing the moratorium in favor of allowing housing developments in areas that need more of them.

The moratorium prohibits approving residential development projects for at least a year or until school crowding problems are resolved. It is automatically placed in areas where schools have enrollments exceeding 120% of their capacity.

The council supports eliminating the moratorium in areas countywide.

The county has three school impact areas. Those include the “greenfield impact areas” that have higher enrollment because of increases in new single-family housing. The others are “turnover impact” areas, which produce fewer students connected to increases in multifamily units, and “infill impact” areas with low student enrollment growth because of turnover of existing single-family housing.

The greenfield area is in Clarksburg and has higher enrollment because of increases in new-single family housing. The turnover area contains the bulk of the county. The infill area includes smaller parts scattered throughout the county, reaching from Germantown in the center of the county down to Takoma Park and Friendship Heights.

Another large change the council is considering is classifying neighborhoods into the school impact areas based on their recent and anticipated growth instead of the current policy, which calculates student generation rates based on school clusters.

The SSP is tied to the impact tax and the recordation tax. The impact tax is collected from developers to help pay the cost of providing public facilities. The recordation tax is a transfer tax paid on the sale of real property, based on the value of the property.

Under the new policy, school impact taxes would be calculated at 100% of the cost of a “student seat” using student generation rates in school impact areas. Developers could get discounts for incentivizing growth in specific areas.

The potential change would place higher impact taxes on certain areas in Clarksburg, where the greenfield impact areas are.

In other areas, the proposal is to decrease the current rates.

Council Member Will Jawando previously cast a straw vote against the proposal to classify the neighborhoods based on recent and anticipated growth because of his interest in having two school impact areas, instead of three — eliminating the greenfield zone.

The impact tax would set up an unequal playing field for people looking to move around the county, he said in a council meeting on Oct. 20.

“If you make it more expensive and you have a higher rate in Clarksburg, you could actually disincentivize the very growth and housing that you want,” Jawando said last month. “Compound the revenue challenges of an already lowered tax rate that we’re doing for the turnover and infill areas.”

One potential change that passed 6-3 was a proposal by Council Member Andrew Friedson.

Friedson recommended applying a discount for desired growth areas (DGAs) to the transportation impact tax instead of the school impact tax. This would exempt the DGA in the Rockville and Red Policy Areas — areas with high-density development and availability of transit service, such as Metro stations or future Purple Line stations.

The County Policy Areas are four categories that help assess areas with certain transportation needs.

The discount would be 40% in Orange Policy Areas — town centers and corridor cities where transit is planned. It would be 32% in Yellow Policy Areas — low-density areas with mainly residential neighborhoods with commercial areas serving the community.

The fourth category is the Green Policy Area, which includes the county’s Agricultural Reserve and rural areas.

Council Vice President Tom Hucker and Council Members Evan Glass and Jawando opposed the recommendation to apply a discount for DGAs to the transportation impact tax.

Glass also opposed eliminating a school impact tax surcharge on residential units larger than 3,500 square feet. The surcharge is an additional $2 per square foot of gross floor area exceeding 3,500 square feet to a maximum of 8,500 square feet.

He was the only council member against removing the surcharge.

In another straw vote that wasn’t unanimous, Jawando did not support a recommendation to exempt any development in a Qualified Opportunity Zone, certified by the U.S. Treasury Department, from development impact taxes.

Council President Sidney Katz recused himself from that straw vote because of property he owns in the Qualified Opportunity Zone.

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

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