For Immediate Release: Tuesday, October 27, 2020
New law has the potential to generate thousands of affordable housing units and help spur economic growth, as regional leaders push to close a housing gap; law also endorsed by Sierra Club and Coalition for Smarter Growth
ROCKVILLE, Md., Oct. 27, 2020—Today the Council, by a vote of 7-2, reaffirmed its commitment to investing in housing based on smart growth principles by overriding the veto of Bill 29-20, called the “More Housing at Metrorail Stations Act.” Originally enacted by the Council on Oct. 6, this new law is a major housing initiative supported by the Sierra Club, the Coalition for Smarter Growth and leading housing advocates. Councilmember Will Jawando and Council Vice President Tom Hucker voted against the veto override.
Councilmember Hans Riemer, chair of the Council’s Planning, Housing and Economic Development (PHED) Committee, and Councilmember Andrew Friedson, member of the PHED Committee, were the lead sponsors of Bill 29-20. Councilmembers Evan Glass, Nancy Navarro, Council President Sidney Katz, Councilmember Gabe Albornoz, Council Vice President Tom Hucker and Councilmember Craig Rice were cosponsors.
The More Housing at Metrorail Stations Act will make a significant impact on the viability of building new housing on Metro station property. Presently, there are no high-rise developments underway on any Metro station property in Montgomery County, nor have there been for many years.
The County is committed to addressing projected housing shortfalls and increasing the overall supply of affordable housing. Incentives are required to spark the level of housing development needed for residents because it is not occurring on the open market.
The law takes effect in Jan. 2021 and incentivizes new housing construction by providing a payment in lieu of taxes (PILOT) for a period of 15 years for new high-rise developments that include at least 50 percent rental housing. The PILOT exempts 100 percent of the property tax that would otherwise be due for a project constructed on property leased from WMATA at a Metro Station in the County. Currently, WMATA does not pay property taxes to Montgomery County. The law allows a new development on a Metro station property to retain that property tax exemption for 15 years. The developers will continue to pay impact taxes, and residents living in the housing will pay personal income taxes.
In addition to including 50 percent rental housing, the new high-rise developments would need to include at least 15 percent affordable housing, with 25 percent of that figure being housing affordable to people making 50 percent or less of the median income in the County.
According to Metro, station properties in the County have the capacity to deliver at least 8,600 units of housing, which would provide a significant contribution to the County’s long-term housing shortage. The high-rise buildings also would include between 1,200 to 1,300 units for the County’s Moderately Priced Dwelling Unit (MPDU) affordable housing set-aside programs. The law changes the economics of high-rise Metro station development and delivers the essential housing on top of Metro that the County needs to fight climate change, promote housing affordability and spur economic growth.
“Montgomery County has a lot riding on getting high-rise development going at our Metro stations,” said Councilmember Hans Riemer. “To fight climate change, this is exactly the kind of location where we should have as much housing as possible. To promote economic development, we need new housing and jobs around the station areas, and these high-rise buildings should help catalyze the market. Our housing market is not producing enough new housing and that is creating affordability problems for young and working families and putting rent pressure on market affordable housing. With the potential for more than 8,000 units of housing, these measures should help us take a big stride towards our regional housing goals.”
“I’m pleased that the Council today stood strong in our continued commitment to meet ambitious housing and transit-oriented development goals so more people will have the chance to live in and contribute to our County,” Councilmember Andrew Friedson said. “While some who oppose new people moving into our community remain satisfied with the status quo of empty lots and parking spaces on top of Metro stations, we made it clear that we won't wait to address our housing and climate crisis or to invigorate our local economy.”
“This legislation is central to the Economic Development Platform that I authored, and the Council adopted during my Council presidency last year,” said Councilmember Nancy Navarro, who also serves as chair of the Government Operations and Fiscal Policy Committee. “This bill seeks to leverage WMATA sites to create additional residential units. As such, it actually touches on two pillars of the Economic Development Platform; the housing pillar, which calls on the Council to find ways to achieve the Metropolitan Washington Council of Governments’ housing targets; and the transportation pillar, as it would provide incentives for developers to construct housing in our activity centers near transit. This bill will help increase ridership in non-automobile transportation modes.”
According to projections by the Metropolitan Washington Council of Governments and the Urban Institute, Montgomery County is expected to become home to more than 60,000 additional households by 2040. Meanwhile, home prices are rising faster than incomes. Moreover in 2018, the Montgomery County Planning Department determined that the County’s median household income of $108,188 was below the $125,621 required to afford a home priced at the midpoint.
Montgomery County is not producing nearly enough housing to keep up with demand. Since 2010, the County’s population has grown by approximately 8,000 people per year, but the County has only added about 2,700 new housing units per year. Almost half of the County’s 120,000 rental households are cost-burdened, which means that more than one-third of their incomes go to pay for housing.
“Ridership on public transportation is at an all-time low because people are concerned about their personal health. Once we have a vaccine for COVID-19, we will once again have to protect the health of our planet, which means more public transportation and less carbon polluting vehicles,” Councilmember Evan Glass said. “Placing more homes near transit isn’t just good for housing affordability, it’s also good for the Earth.”
“Incentivizing housing at our Metro stations is a win, win, win all around,” said Councilmember Gabe Albornoz. “Transit-oriented development is good for our environment, our economy and our residents who need affordable housing.”
“Sierra Club Montgomery County enthusiastically supports this law proposed by Councilmember Riemer to expand housing by metro stations,” said Shruti Bhatnagar, chair of the Montgomery County Chapter of the Sierra Club. “The law aligns with Sierra Club priorities to address climate change through smart growth policies focusing on transportation, housing and land use. We need more total housing units in the County, and we can help reduce greenhouse gas by building most (at least 80 percent) of these new housing units within walking distance of transit stations, which also promotes a healthy active lifestyle. Sierra Club recommends making many of these units affordable to help the County move forward in its equity goals.”
“This is a promising approach,” said Jane Lyons, Maryland Advocacy Manager for the Coalition for Smarter Growth. “Housing on top of Metro stations is key to meeting housing demand without putting new cars on the road. This strategy will help the county meet its climate, economic development and housing goals.”
The Council staff report can be viewed here.
# # #
Release ID: 20-424