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Montgomery County Council Passes New Bills to Enhance Flexibility of Moderately Priced Dwelling Unit Regulations

July 26, 2018

New legislation modernizes the moderately priced dwelling unit program and increases the percentage of MPDUs in higher income planning areas of the county

Silver Spring, MD – The Montgomery County Planning Department, part of The Maryland-National Capital Park and Planning Commission, participated in County Council committee work sessions to change the county’s moderately priced dwelling unit (MPDU) law. The resulting new bills were both passed unanimously by the County Council on Tuesday, July 24, 2018.

Bill 34-17, Housing – Moderately Priced Dwelling Units (MPDUs) – Amendments, was sponsored by Councilmember Nancy Floreen and co-sponsored by Councilmember Craig Rice, and was

introduced on October 31, 2017 to address the need to increase housing opportunities for low and moderate income residents.

“Bill 34-17 modernizes our MPDU program so it can provide even more affordable homes to meet our ongoing and growing demand,” says Councilmember Floreen who chairs the Planning, Housing and Economic Development Committee (PHED).

Bill 38-17, Moderately Priced Dwelling Units (MPDUs) – Requirement to Build, was sponsored by Council President Hans Riemer and co-sponsored by Councilmember Sidney Katz. Under current law, the minimum MPDU requirement countywide is 12.5 percent, unless expressly increased by a master plan such as Bethesda that has a 15 percent minimum.

The new law increases the MPDU minimum requirement to 15 percent in any planning area in which at least 45 percent of the United State Census tracts have a median household income of at least 150 percent of the countywide median household income.

Public hearings on the bills were held in December 2017. PHED Committee work sessions, when Planning Department staff participated, were held in March and June 2018.

Planning Department’s Rental Housing Study Influence on Bill

Findings and recommendations from the Planning Department’s 2017 Rental Housing Study influenced the changes in the MPDU law. The study found that 68 percent of households with incomes between 50 and 80 percent of area median income pay more than 30 percent of income for rent and 15 percent report being extremely rent-burdened, paying more than 50 percent of income for rent.

New Changes to MPDU Law

The bills make several changes to the county MPDU law to enhance administrative flexibility and clarify provisions of the law. These changes will take effect on October 31, 2018 and include:

  • Connecting MPDU eligibility expressly to household income as opposed to the MPDU sale price and financing information.
  • Allowing the MPDU requirement to be calculated based on floor area ratio instead of a percentage of total units. The FAR-based method permits market-rate projects to satisfy the MPDU requirement as a percentage of square feet of the building, allowing units to be larger than are offered as a percentage of total market-rate units.
  • Requiring a payment to the Housing Initiative Fund (HIF) for developments of between 11 and 19 units. Currently, developments of fewer than 20 units are not subject to any MPDU requirements.
  • Removing provisions related to density bonuses from Chapter 25A of the Montgomery County Code and placing them in Chapter 59 of the Zoning Ordinance. A related zoning text amendment (ZTA 18-06) has been introduced to ensure consistency between Chapter 25A and Chapter 59. A public hearing for the ZTA is scheduled for September 11, 2018.
  • Providing flexibility for the Montgomery County Department of Housing and Community Affairs to accept alternative payment and alternative location agreements. Alternative payments allow an applicant to satisfy MPDU requirements via a financial contribution to the Housing Initiative Fund. Alternative location agreements allow an applicant to satisfy MPDU requirements off-site from the proposed development by allowing an alternate payment or alternative location agreement to be used or placed in a different planning area than that of the development if the location is one of the county’s higher income planning areas, or after notice of “good cause” and a 30-day comment period is provided to the County Council.
  • Requiring 15 percent MPDUs in planning areas in which at least 45 percent of the United States Census tracts have a median household income of at least 150 percent of the countywide median household income.

For more information, contact Lisa Govoni at lisa.govoni@montgomeryplanning.org or 301-650-5624.