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Is Affordable Housing Worth the Cost?

Planners tackle first set of proposals designed to stimulate building of more affordable housing.

A contentious debate looms over how to reform the county’s affordable housing program. At question is how to fairly compensate developers while requiring them to build affordable units and how to make it easier to create low-cost housing without undermining county master plans and residents’ expectations.

The Montgomery County Planning Board met Sept. 9 to make recommendations on four Zoning Text Amendments and one Subdivision Regulation Amendment that would ease certain zoning and building restrictions when builders provide affordable housing, Moderately Priced Dwelling Units (MPDUs), on the site of new developments.

The recommendations come as the County Council prepares to consider changes to zoning along with two Council Bills reforming affordable housing legislation in a public hearing scheduled for Sept. 23.

In August 2003, then Council President Michael Subin directed Council staff to conduct a comprehensive review of the County's 30-year-old Moderately Priced Dwelling Unit (MPDU) program, which was started in 1973. The resulting report was released in February, 2004.

Planning Board Chair Derick Berlage will formalize Planning Board recommendations to the County Council in a letter that is currently being researched and discussed by Parks and Planning Commission staff. Some of the measures, especially ZTA 04-13, which would relax master plan conformity requirements, were intensely debated.

“I’ve struggled over this legislation, as I now hear that many of us have,” said Commissioner Meredith Wellington during the meeting. “It’s the first time any legislation that I’ve ever seen [is] severing the zones from the Master Plan."

"Normally we have language that says it has to be consistent with the Master Plan," Wellington said. "This doesn’t do that. And so, the way it’s written now, we have a situation where either density or height or both could be completely different from the Master Plan and you don’t know it.”

Montgomery County guides all land use of public and private lands through the master plan process. Potomac’s Master Plan, a 20-year blueprint for land use, was approved in March 2002 after several years of research and community input.

Potomac resident Ginny Barnes testified on behalf of the West Montgomery County Citizens Association, and echoed Commissioner Wellington’s concerns.

“I spent four years of my life on the Potomac Master Plan. I considered that well spent," Barnes said. "But I never envisioned that I would look up a few years later and see, potentially, such a sweeping package of legislation that threatens to force Master Plans to be driven by an MPDU program.”

She added, “This is a public trust issue as much as anything else.”

John Clarke, of the Maryland National Capital Building Industry Association, spoke in favor of the proposed amendments, but said they didn’t go far enough in allowing more development. "We believe Council staff was given a blank slate to write bold new legislation," Clark said, reading from a prepared statement, "And all they did was play around the edges."

"Today, our developable area per parcel is less" than it was when the MPDU program was created 30 years ago, "and development costs are much higher. We need to find ways to achieve base and bonus density," he said.

TWO SITES IN POTOMAC — the Cabin John Center at the corner of Tuckerman Lane and Seven Locks Road and the Hanson Farms bounded to the south by Travilah Road and to the east by Quince Orchard Road — could be particularly affected if the zoning amendments are passed.

"We came up with plans that we thought provided the opportunity for development and provided protections for the communities that were around Cabin John," said George Barnes, president of the West Montgomery County Citizens Association. "Both of these sites could have their density increased, the height limits on buildings changed and other things that were not anticipated by the planners, by the community.”

Both Planning Board members and staff expressed concern about the vagueness of the phrases “as necessary” and “to the extent necessary,” which appear in several of the proposed zoning changes. The Planning Board's letter to the County Council will recommend limits to some aspects of the proposed amendments that were considered too broad.

An underlying issue is the question of “buyouts.” Under current law, developers may make a payment to the county’s Housing Initiative Fund as an alternative to providing the affordable units that they are required to build under zoning law. Critics of the zoning ordinance’s buyout provisions say that the buyout amounts are often too low and that allowing the payments weakens the affordable housing program.

“If we just hadn’t allowed the buyouts in 2000 … we might not even be having to be going through this whole rigmarole,” Wellington said.

Council Bills 24-04 and 25-04 aim to reduce the number of buyout agreements by providing some off-site alternatives for the creation of affordable units and significantly increasing the per-unit payments when a buyout is negotiated. Both bills also propose to extend the rent and sale control period imposed by the county for affordable units developed under the MPDU law. Bill 24-04 would extend the period to 30 years and Bill 25-04 would extend it to 99 years. The price controls are currently 10 years for sale and 20 years for rental. The bills are conceptually similar but differ in degree and in several significant details (see box). They would both also lower the threshold number of units above which developers are required to provide MPDUs from 35 to 20.

Potomac Master Plan

The Potomac Master Plan is available online at http://www.mc-mncppc.org/community/plan_areas/potomac/intro.shtm

County Council Staff 30-Year Review of the MPDU program:

http://montgomerycountymd.gov/content/council/2004news/0205mpdu.pdf

Proposed Zoning Changes

Source: Planning Board staff reports

* ZTA 04-11

Introduced by Councilmembers Floreen, Silverman, Subin, Knapp and Leventhal

Proposed: Would reduce to 20 percent the amount of green space required when building a development in multifamily residential zones and eliminate the “coverage requirement” when affordable units are provided on-site.

Planning Board staff recommends: Planning staff recommended that the zoning change be adopted with the green space requirement being reduced to 35 percent rather than 20 percent.

* ZTA 04-12

Introduced by Councilmembers Floreen, Silverman, Subin, Knapp and Leventhal

Proposed: Would allow a further increase in unit density or residential floor-to-area-ratio for developments in central business district zones and transit station zones that already qualify for a density bonus by providing affordable units under the county’s zoning laws. In addition, the amendment would reduce to five percent the amount of public use space required for developments in all six types of central business district zones, when MPDUs are provided on-site. In some cases, the public use space could be provided off-site.

Planning Board staff recommends: Planning staff recommended adoption of the reduction of public use space requirement only when developments are built under the Standard Method of development. (Zoning law includes an "optional" method of development which allows greater densities on the condition that certain facilities and amenities are provided. Planning staff recommended denial of the portions of ZTA 04-12 that would allow a reduction of public use space under the optional method.)

* ZTA 04-13

Introduced by Councilmembers Floreen, Silverman, Subin, Knapp and Leventhal

Proposed: Would allow developments that include MPDUs on-site to exceed master plan, sector plan, and urban renewal plan limitations on building height and density, up to the maximum height and density allowed in the zone.

Planning Board staff recommends: Approval of the amendment with the requirment that MPDUs are provided on-site.

* ZTA 04-14

Introduced by Councilmembers Floreen, Silverman, Subin, Knapp and Leventhal

Proposed: Would allow up to 100 percent of the housing units in a single-family residential zone to be a single type of unit (attached, semi-detached, or townhouse) if the exception would allow the creation of affordable housing. Under current law, only 50 percent of units may be of the same type for most residential zones.

Planning Board staff recommends: Approval of the measure.

* SRA 04-1

Introduced by Councilmembers Floreen, Silverman, Subin, Knapp and Leventhal

Proposed: Would allow a reduction in the required width of tertiary streets when the reduction is necessary to create more affordable units.

Planning Board staff recommends: Adoption of the measure if MPDUs are provided on-site and the proposed development is compatible with surrounding ones. The staff also added a clarification that master plan density limits may be exceeded by the amount of any MPDU density bonus allowed under zoning law.

Council Bill 24-04

Introduced by Councilmembers Floreen, Silverman, Subin, Knapp and Leventhal

Control Period: Raise the control period to 30 years for both rented and owned MPDUs.

Alternatives to on-site MPDUs: An equal number of MPDUs may be provided at an alternative location within the same planning area, when deemed appropriate by the Department of Housing Director and/or Planning board.

Buyout approval: Permits the director of Department of Housing and Community Affairs to approve alternative payment agreements only if an indivisible package of services and facilities in the development would render the MPDUs unaffordable or if the Director finds that the public benefit of additional housing elsewhere outweighs the benefit of locating the MPDUs in that subdivision.

Buyout amount: The buyout amount would be 125 percent of the developer’s profit on the substituted market unit. Profit is the difference between the actual selling price of the market unit that is substituted for the MPDU and the maximum allowable price of the MPDU that would have been built. For example, if a developer chooses to buyout and sells a market unit for $300,000 in place of an MPDU that would have had a maximum price of $150,000, then the developer must pay 125 percent of the $150,000 profit, or $187,500.

Bedrooms: Make the required number of bedrooms in MPDUs reflect the mix available in the market-rate units of the subdivision.

Council Bill 25-04

Introduced by Councilmembers Praisner, Leventhal, Perez and Andrews

Control Period: Raise the control period to 99 years for both rented and owned MPDUs.

Alternatives to on-site MPDUs: An equal number of MPDUs may be provided at an alternative location within one-half mile of the the development, when deemed appropriate by the DHCA Director.

Buyout approval: Mirrors 24-04’s provision that allows the Director of DHCA to approve an alternative payment agreement if an indivisible package of services and facilities in the development would render the MPDU unaffordable. The only other opportunity of buyouts is when the subdivision consists only of senior citizens and special needs housing or when the public benefit of additional affordable senior and special needs housing outweighs the value of locating MPDUs in each subdivision throughout the county and the payment will further the objective of providing a broad range of housing opportunities throughout the county.

Buyout amount: The buyout amount would simply be the total cost of providing all of the MPDUs on-site.

Bedrooms: Increase the required number of bedrooms from two to three in single family unit subdivisions.