Council Mulls Building Moratorium

Council Mulls Building Moratorium

Developers cite concerns; Potomac projects affected.

A halt on new building permits and a proposed moratorium on nearly all new construction following the revelation of hundreds of building violations in Clarksburg have left county builders in limbo and some Potomac projects on hold.

ON JULY 7, the Montgomery County Planning Board found that builders in the new Clarksburg Town Center had committed more than 500 violations of height and setback regulations. The Board has delayed a meeting to impose sanctions on the builders until September, pending an Office of Legislative Oversight review of the Clarksburg matter. But on July 18, County Executive Doug Duncan and Planning Board Chair Derick Berlage announced a freeze of new building permits in zones requiring site plans — affecting most new building in the county — while the county works to verify builders’ compliance with height and setback requirements.

Projects already under construction or where builders already have permits in hand are not subject to the freeze, but 199 pending permits were affected.

The same day, four County Councilmembers led by Michael Subin (D-At Large) proposed a broader moratorium on new construction — which would freeze new permits for most residential construction and prevent builders with permits from beginning construction until either Nov. 1 or the Council receives a sign off from Berlage and Department of Permitting Services Director Bob Hubbard and has 15 days to review the project (whichever is earlier).

The Council was holding a hearing on the proposed bill, 22-05, at the Almanac’s press time July 26. As an expedited bill, it would require six votes to pass, and only seven Councilmembers were present, with Mike Knapp (D-2) and Nancy Floreen (D-At Large) on a trip to Israel. If passed, the bill would take effect immediately.

Potomac Team Leader Callum Murray of the Planning Board staff said the current freeze and proposed bill “raised more questions than answers.”

“I’m wondering who’s going to certify that in fact these buildings meet the site plans. I don’t know whether we’re going to rely on engineers hired by the developers,” he said, or those hired by the county. The Planning Board has had difficulty luring engineers, who fear that they will lose business from developers if they work with the Board, Murray said.

Raquel Montenegro, Associate Director of Government Affairs for the Maryland National Capital Building Industry Association also had concerns about the ambiguity of Bill 22-05. Her group supports clarifying the building certification process, and is comfortable with the limited scope of the current freeze, but strongly opposes a moratorium, especially one as hazy as the council proposal, she said.

She pointed to a lack of specificity in the bill about when construction legally begins, and the use of a blanket reference to “building permits,” which include a variety of types of permits.

“If the intent of the bill was to ensure that building height and setback violations not occur as they appear to have occurred at the Clarksburg town center, this bill far exceeds that intent,” Montenegro said. “And the number of innocent people caught up in this bill, that could be impacted is far beyond I think the original intent of the sponsors.”

“You have this incredible domino effect,” where builders become unable to repay loans, subcontractors lose promised business, and home buyers who may be moving to the area or have already sold their previous home will be left out in the cold when their homes are not completed on schedule, she said.

Montenegro said that she couldn’t put a dollar figure on the potential loss to her member organizations, but that 22-05 could certainly put small builders out of business.

“I would hope the Councilmembers would agree on clarifying the purpose of the bill,” she said. “I don’t know if all seven Councilmembers agree on what the issue is.”

The intent of 22-05 is “to take a step back and have the agencies involved verify and confirm for the council that Clarksburg is an isolated situation” Knapp said in a memo to other Councilmembers.

The Clarksburg Town Center Advisory Committee — the citizens group that brought the height and setback limitations to the Planning Board—called for a broadening of 22-05 to include non-residential construction as well as residential.

IN POTOMAC, Park Potomac Place, (formerly Fortune Parc) at Seven Locks and Montrose roads, is among the largest developments affected by the current debate.

Bob Youngentob of the firm Eakin/Youngentob, which is handling the residential portion of Park Potomac said that his company had sold 60 percent of the 150 planned townhouses and begun construction on about 30 percent of them.

The freeze could affect the timely delivery of new homes Youngentob said. He praised Montgomery County’s planning process and said the needed changes amount to “tweaks to the system rather than a whole overhaul.”

“Montgomery County has a very thorough process today. I still think it’s probably one of the best in the region,” he said. “To the extent that they can find a resolution to the concerns where you have Park and Planning more involved in the process … we have no problem supplying more information. … We know that we’re in compliance and we’re comfortable with that.”

He did not wish to comment on the Clarksburg violations but said, “Obviously, the whole idea of a moratorium we think is unfortunate.”

ONE GROUP sure to be affected by the building freeze is new home buyers. If new homes remain on hold, the price of the limited available stock will rise, said Potomac Realtor Bob Moorman of WC&AN Miller.

“It’s already increased enough, I don’t know how it can bear any more,” he said, but “we’ll know next month. We continue to be surprised every month.”