Moore Housing for Maryland

The Moore administration’s newly-unveiled housing agenda includes some courageous proposals – including preemption of local land use rules to upzone property for affordable housing near transit – but its geographic reach is limited and it does not apply to market-rate housing.

Here’s what’s in the governor’s three housing bills and what they are likely to mean:

The Housing Expansion and Affordability Act would preempt local zoning limits to add “density bonuses” and regulatory streamlining for residential development projects that are:

  • Within one mile of rail transit and include at least 25 percent affordable units
  • Owned by a non-profit organization and include 50 percent affordable units
  • Located on property formerly owned by the state and include 50 percent affordable units

Eligible projects could develop at densities 30 percent greater than allowed by local zoning. The bill also would allow “missing middle” housing types (with two to four units) in neighborhoods now zoned exclusively for single family houses as well as mixed-use projects with multifamily housing in areas not zoned for residential uses.

The bill would preempt “unreasonable restrictions or limitations on [eligible] projects that have an adverse impact on the viability, affordability, or density” would be pre-empted and local governments generally could require no more than one public hearing on these projects. It does not attempt to define the term “unreasonable” but says limits on density or height, parking requirements, or other development standards could be included.

Similarly, the bill would preempt adequate public facility ordinances (APFOs) that “impact [an eligible] project’s viability, affordability, or density” but does not specify whether, for example, transportation or impact fees would be capped or development moratoria based on traffic congestion of school overcrowding would be rendered inapplicable.

The bill also would preempt local codes excluding manufactured homes that can attach to a foundation from zones that allow other types of single-family houses.

The bill would clear the path for affordable housing in some areas, notably near MARC stations in parts of the state where resistance to both transit-oriented development and affordable housing has been persistently strong.

The total number of units generated, however, would be limited because the bill applies only to properties owned by non-profits, formerly owned by the state, or within a mile of rail transit and then only to projects with 25 to 50 percent income-restricted units. Moreover, Montgomery County neighborhoods near Metrorail and MARC stations generally have significant zoning capacity, and the local code already provides bonus density for projects that include a large proportion of affordable units.

Still, the bill represents a welcome step forward in recognizing that when local governments fail to accommodate badly-needed affordable housing preemption of local land use authority is appropriate and necessary. It also puts Governor Moore on record in favor of zoning reforms to allow for missing middle housing, an idea embraced by the Biden administration but resisted by many homeowners, even in progressive jurisdictions.

The Housing and Community Development Financing Act would establish a state-chartered organization to make loans using the federal government’s New Market Tax Credit (NMTC) program. The NMTC is similar to the Low Income Housing Tax Credit (LIHTC) program, where tax credits are sold to investors to finance affordable housing. NMTCs can provide subsidized loans for up to 20 percent of a project’s capital needs. Like LIHTC, the NMTC program allocates tax credits to participating state agencies, and developers submit proposals to compete for a share of the credits to finance specific development projects.

Symphony Park at Strathmore, where 3,000-square foot townhouses sell for up to $2 million

The bill also would expand eligibility for loans from the state’s Strategic Demolition and Smart Growth Impact Fund, which currently can be used to finance demolition, land assembly, architecture and engineering fees, and other pre-development costs in areas targeted for investment, such as Opportunity Zones.

Additional resources and financing tools for affordable housing are certainly needed, but the impact of the bill will depend on the availability of federal funding. The state also tends to allocate more LIHTC credits to projects in low-income areas, e.g., parts of Baltimore City, because the need is perceived to be greater and because the credits go farther in areas where the cost of land is lower, but the result is to make it harder for projects in the Washington suburbs, especially in Montgomery County, to compete for credits. The same factors may limit the impact of the NMTC program in the DC area.

The Renters Rights and Housing Stabilization Act would raise the eviction filing fee surcharge from $8 to $93, increasing the total cost of filing an eviction action from $15 to $100. The estimated $25 to $30 million in revenue generated by this fee increase would be split between legal representation for tenants and the state’s new rental voucher program.

The bill also would reduce the allowable security deposit for renters in Maryland from two month’s rent to one; provide renters with a right of first refusal (ROFR) upon sale of a rental property, and prohibit evictions in extreme weather or other dangerous conditions.

Owners and operators of rental housing will not love this bill, but they will likely be glad that the Moore administration has elected not to introduce a proposal for statewide rent control. The ROFR provisions could make it harder to buy and sell multifamily properties, and if experience with similar laws in other jurisdictions is any guide they are unlikely to result in many transactions where tenants wind up owning the buildings where they live.

Casey Anderson recently joined Rodgers Consulting as an adviser after more than a decade of service on the Montgomery County Planning Board