Montgomery County Council ends residential building moratorium

County Council ends residential building moratorium

Changes to growth policy will address school capacity, traffic congestion

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A residential building moratorium is ending in Montgomery County, making way next year for housing in areas where development had been restricted to address overcrowding in schools.

The county’s 2020-2024 subdivision staging policy — now known as the growth and infrastructure policy — determines the types of development projects allowed in certain school neighborhoods. It also looks at the adequacy of transportation infrastructure alongside projected growth and future developments.

The County Council on Monday unanimously approved changes to the policy, including the countywide removal of the residential building moratorium.

It will take effect on Jan. 1 and be applied to preliminary subdivision plan applications filed on or after that date. The changes will not apply to applications filed before Jan. 1, or any applications that include at least 25% affordable units filed before Feb. 26.

The county’s Planning Board must review the policy every four years. The board submitted its recommendations for changes to the policy on July 31. The council discussed the recommended changes during nearly 20 work sessions.

The biggest change is abolishing the moratorium, which prohibited 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 enrollment exceeding 120% of capacity.

The council replaced it with a utilization premium payment, which is separated into three tiers, and requires the payment to increase with increased level of overutilization.

Some council members have said the moratorium hurt the county’s ability to address a housing shortage.

Council Member Hans Riemer said in an interview with Bethesda Beat Monday evening that the growth policy will help the community benefit from growth, much like in other surrounding jurisdictions.

“The county’s progress has been a lot slower,” he said. “One of the other reasons that it has been a lot slower is that we have this moratorium in place that has been a decades-long tradition in Montgomery County. I think it is one of the problems that this county has been unable to shake for a long time. It has produced really negative outcomes.”

Riemer said he would have liked to see the council keep “greenfield” impact areas in the policy, which generate more students, but the impact of the removal is “fairly muted.”

“I think, in general, this policy — there are so many wins in here. … It is one of the biggest steps forward that we’ve taken in many, many councils,” he said.

Council Member Andrew Friedson said in a phone interview with Bethesda Beat Tuesday evening that reviewing the growth policy every four years is one of the council’s most important tasks.

“This sends a really loud signal to the region that we’re putting up a welcome sign where we used to have a wall,” he said. “That is a powerful statement for who we are and who we want to be. It’s a significant step forward to being a more welcoming place for new residents and a more affordable place for new housing and for private sector investment.”

Friedson said after the vote, a county-based housing developer told him that he was looking forward to doing projects in the county again under the changes to the policy.

“We weren’t able to make deals happen,” he said. “After the passage of this policy , that’s going to change things.”

Although the council unanimously approved the policy, Council Member Will Jawando said at the meeting that it still needed work and missed the mark overall.

The policy “dramatically” lowers fees and taxes in a “100% fashion” that won’t lead to more housing, especially affordable housing, Jawando said.

“Much of our policy is a wish and a prayer with taxpayer money. We hope things will happen. … I don’t think this policy on balance is going to do anything extra that wasn’t already being done,” he said.

Jawando told Bethesda Beat in a phone interview Monday night that the council needs to come back to some of the problems in the policy and he expects to work on trying to build some controls and checks into the policy.

He expects to propose changes, such as requiring more house affordability and profit transparency for developers, during the winter and spring.

“I questioned by whether reducing these impact taxes and fees, you’re not only taking what we need for our roads and schools, you’re also not producing any more affordable housing,” he said. “It’s a balancing act that I think we didn’t strike here and it’s from this premise that we need to build more housing to reduce the price. But show me where that’s happened.”

Developers will get discounts to produce housing, but the county will lose impact tax revenue during a pandemic, he said.

“I just think that if our schools are overcrowded, we need the money to support them. We’re already having a budget shortfall. But to just kind of give all of this away and reduce our revenue in this way is irresponsible without maximizing the public benefits,” he said, noting the projected impact tax revenue loss will be $11 million to $20 million a year.

Another change the council approved is for neighborhoods to be classified into school impact areas based on their recent and anticipated growth instead of the current policy, which calculates student generation rates based on school clusters.

School service areas will be used to analyze public school facility adequacy. The Planning Board must create annual school test guidelines by Jan. 1, which will be used to assess enrollment impacts of development applications on individual schools.

A large change for the transportation segment of the policy is requiring a Vision Zero impact statement for certain transportation studies, depending on a project’s size.

Friedson said the new growth policy is the first the county has adopted with a focus on the principles of Vision Zero, a goal to eliminate traffic, bicycle and pedestrian deaths.

“It phases out the outdated approach to infrastructure that prioritizes cars over people, that puts the speed of vehicles through an intersection ahead of the safety of people crossing the street,” he said. “[It] really emphasizes pedestrian and bike safety that we want — to create visible, walking, accessible communities that we want.”

The transportation study requirement for vehicle adequacy in Red Policy Areas — with high-density development and availability of transit service, such as Metro stations or future Purple Line stations — was also removed.

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

In a move to assist the response to the pandemic, the council also approved exempting bioscience facilities from all Local Area Transportation Review tests in the next four years to allow facilities that conduct COVID-19 research and offer major employment to be approved more quickly.

Another change included calculating school impact taxes at 100% of the cost of a student seat using student generation rates in school impact areas. The taxes were previously calculated based on 120% of the cost of a student seat.

To incentivize development in desired growth and investment areas, a discount will be provided on transportation impact taxes.

Other changes include exempting any development in a Qualified Opportunity Zone — certified by the U.S. Treasury Department — from development and school impact taxes, and a 60% impact tax credit for construction of three-bedroom units in “infill” school impact areas.

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

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