Almost 70 speakers turned out at two public hearings about how new development should proceed in Montgomery County.
The County Council is considering sweeping changes to the Annual Growth Policy, including a cap on the total number of new units to be approved each year and “impact fees” to be assessed on all new commercial and residential development.
The Annual Growth Policy is designed to ensure that new development in the county goes forward in places where the infrastructure can handle it. The county’s Adequate Public Facilities Ordinance states that no new development may occur unless there is enough infrastructure – primarily roads and schools – to serve the new development. If areas are not adequate, construction is not allowed to progress. It’s the job of the growth policy to define adequate.
It had been characterized by complex formulas, resulting in numbers that show schools that are not crowded and roads that are not congested, even though that runs counter to the public’s experience.
The newly proposed revision in some ways disposes of the concept of adequate public facilities by stating that even though facilities are not adequate, at least on a countywide basis, development will be allowed to occur.
In order to try to “catch up” with the need for infrastructure, the proposed growth policy, if adopted, would institute a substantial impact tax on new development, and would allow for approval of preliminary plans for new development that would allow growth of up to 1 percent a year. The number of approvals would then be allotted to different areas of the county, with the lion’s share going to areas surrounding Metro stations.
One councilmember said this plan works against itself. Marilyn Praisner (D-4) pointed out that while the plan expects to generate revenue from impact taxes, it limits the number of projects which could go forward. “[There are] assumptions about the level of funding that will always be there,” she said.
PUBLIC COMMENTS FOCUSED on the proposed 1-percent Preliminary Plan Approval Rate. Many characterized the rate as a growth cap, but the Planning Board had designed the rate with the idea that 10 years’ worth of projects have already received approval – in the so-called “pipeline.”
No one who commented on the proposed rate of growth liked the 1-percent rate.
Builders and the many land-use attorneys who spoke were in favor of discarding the cap altogether. “It would be far better to institute higher impact fees on new development as a means of targeting growth [through variations in fees],” said Nanci Porten James of the Maryland National Capital Building Industry Association.
Builders assert that the schedule of differing fees, typically lower around Metro stations and areas with better transit access, will allow market forces to direct growth to areas where planners want it, anyway.
They did not mention that the differences in the cost of land – more expensive where the impact fees are lower – could result in the rural areas still having lower costs and therefore not directing growth as efficiently.
“The executive [Doug Duncan (D)] does not support the Planning Board’s recommended 1-percent growth cap,” said Scott Reilly, assistant chief administrative officer for Montgomery County, speaking on Duncan’s behalf.
The rate could act as a growth cap when the economy needs more growth, Reilly said. Other criticism from Duncan: The rate does not offer a sufficiently direct connection to infrastructure, would not affect the amount of building and the formula for allotting growth is still too complex.
Affordable housing advocates were also skeptical of a cap, arguing that shutting off the supply of houses will increase the cost of housing for everyone.
“We have an affordable housing crisis in this county,” said James Brodsky of the Montgomery Housing Partnership. “The supply of affordable housing in the county is shrinking.”
Others think the cap is too high. Since it does not factor in projects in the pipeline, development in the cities of Rockville and Gaithersburg, or federal projects, the actual amount of development could far exceed 1 percent.
“The 1-percent cap would act as a floor, not a ceiling,” said Tina Brown, of Solutions Not Sprawl. She supported a 0.5-percent cap, coupled with prioritizing special exemptions within that limit.
“Growth must be slowed to substantially less than 1 percent annually,” said Steve Caflisch of the Sierra Club. He pointed out that the compounding effect of a percent-based system will lead to an ever-growing number over time.
“Whatever your definition of too much is, we’re going to reach that.”
Caflisch and others also argued against the proposed growth policy’s premise that growth is necessary at all. He believes that it is possible to expand economically with expanding physically. “It’s time to figure out how to grow our economy without having to grow our population and jobs,” he said.
IMPACT TAX DID not generate as much discussion. No one who spoke was opposed to the idea of the tax, but the amount was in dispute.
“With respect to the rates for the new school impact tax, we concur with the county executive [Duncan] that they should be set between the rate proposed by the Planning Board and the rate proposed in Bill 9-03,” said Porten James, the builder representative.
Bill 9-03 was proposed by Councilmembers Phil Andrews (D-3) and Tom Perez (D-5) last March and would have created impact taxes dedicated to schools. It did not pass.
Others came to speak in favor of higher rates. The Planning Board has calculated that a new house costs the county an average of $36,000 in new infrastructure. While groups in favor of higher rates recognize that charging that amount per unit is not politically feasible, they want citizens to be aware of new housing.
Even if the higher-end impact tax rates are put into effect, said Drew Powell of Neighbors for a Better Montgomery, “Every time you see a house go up, we’re going $20,000 in the hole.”
Porten James would also like the impact tax to guarantee that development could occur if the tax was paid. Further, she wants a “grandfathering” clause, to “exempt those projects which have already received preliminary plan approval prior to the effective date of the tax.”
Duncan supports this idea.
The Planning Board had considered allowing this exemption, but they decided that the county would lose a large amount of money by allowing the 10 years’ worth of development in the pipeline to go forward without paying the tax.
Duncan also wants to discard the proposed transportation impact tax for businesses. “The executive supports continuation of the rates already established. There rates are being phased in at the current time, and this process should continue as originally planned,” Reilly said.
Business groups agreed with Duncan. “We feel strongly that these new fees should be given a chance to work,” said Steve Robins, Montgomery County Chamber of Commerce president.
The Planning Board rejected the idea of simply maintaining those fees, based in part on testimony of Edgar Gonzales, deputy director of transportation policy for the Department of Transportation and Public Works.
During the Planning Board’s deliberation, Gonzales said that the revenues anticipated from the current transportation impact taxes were below what had been projected because the tax structure allowed for too many loopholes.