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The Montgomery County Council has the chance to better the County’s future by voting to approve the County Growth Policy

We’ve grown accustomed to the idea that developers are expected to pay a large part of the cost of building schools, based on the eminently reasonable theory that the construction of new housing generates demand for classroom space as families move into the housing, have children, and send them to local schools. If the schools get too crowded, county rules impose a moratorium on the development of new housing until classroom space is made available to “catch up.”

The logic behind this approach appears unassailable. If new housing produces a need for more seats in schools, it follows that the developers of that housing should pay at least a substantial share of the cost of providing those seats. If they can’t or won’t build or pay for the necessary school buildings, why should the rest of us be expected to pick up the tab or tolerate the resulting school overcrowding? To many people, a development moratorium seems to be a creative and plausible solution to the problem of overcrowded schools.

As H.L. Mencken pointed out, however, “there is always a well-known solution to every human problem — neat, plausible, and wrong.” On closer examination, the moratorium policy rests on premises that are so factually flawed — despite how reasonable they seem in theory — that the policy not only fails to achieve its objectives, but in some ways makes it harder to build school capacity where it is needed. Even worse, the moratorium policy worsens shortages of affordable, attainable, and appropriate housing. That undercuts our economic competitiveness by reducing our ability to attract and retain the workforce high-quality employers need while compounding the difficulties of residents struggling to find housing that meets their needs.

1. New development is not driving school overcrowding.

With the possible exception of Clarksburg, the surge in school enrollment faced by MCPS in recent years is attributable to turnover in housing built decades ago.

Percent of New Enrollment Growth Attributed to New Development

Unit Type Units Built Share of 2010-2015 Enrollment Growth
Single Family Detached 2,606 (16.1%) 10.9% 19.1%
Single Family Attached 3,403 (21.0%) 8.2%
Multifamily Low-rise 3,498 (21.6%) 2.6% 4.3%
Multifamily High-rise 6,660 (41.2%) 1.7%
Source: SDAT, MCPS Enrollment


2. Moratoria have failed to solve the overcrowding problem and cut off a source of funds to build schools.

Some argue that even though turnover is largely responsible for overcrowded schools, the moratorium serves a useful purpose in generating political pressure to solve school capacity shortfalls, and that the threat of a moratorium will force elected officials to focus on the issue.

The short answer is we tried it and it didn’t work. The Walter Johnson, Blair, Northwood, and Einstein clusters all went into moratorium in July 2019 despite real estate developers warning that housing development projects in these areas would be delayed or killed. The deadline came and went, the projects were put on ice, and no funding for capacity expansions was accelerated from any source.

A moratorium also makes it more difficult for MCPS to deal with their capacity issues because impact taxes help fund the cost of capacity projects. The Planning Board has proposed adding additional payments in overutilized clusters that would require higher payments (utilization premium payments) in more crowded school clusters, but the idea is the same: new development pays more than its “share” and stopping development cuts off a needed supply of funds for the school system’s other needs.

The fact that moratoria are allowed to take effect despite their impact on development reveals the flaw in an implicit premise of the moratorium policy — namely that real estate developers will find a way to get schools built rather than see their business grind to a halt. The truth is that developers often operate in multiple jurisdictions, and they raise money to finance their projects from investors who are choosing among opportunities in every part of the country and even the world. Developers don’t like seeing their projects held up after they have spent time trying to get them lined up, but ultimately most of them don’t need to be here because they can acquire land to develop somewhere else. Montgomery County taxpayers have more to lose by stopping new housing construction than real estate developers, school board members, or any other group.

3. We are not producing enough housing – and moratoria make the housing supply problem worse.

Our school impact fees, and moratorium policy are damaging our ability to provide the housing our residents and economy need.

The reasons for our lagging housing production are many — including high costs of materials, shortages of skilled labor, and constraints on the availability of land suitable for development — but impact fees for schools are certainly a contributor.

A comparison of Montgomery County’s rules to the approach taken by our peers and competitors in the region is telling. We have the highest school impact payments in the greater Washington region except for Loudoun County, which is in a stage of its evolution where greenfield development is the norm.

This cost difference is especially damaging when the moratorium policy limits our ability to deliver the kind of new housing that is increasingly appealing to people of all ages, but especially young adults —housing in walkable neighborhoods close to transit, jobs, and centers of activity in a more urban environment.

Many advocates of the moratorium policy say they don’t oppose new development, but they want to make sure infrastructure can keep up. The problem with this line of thinking is it ignores the sources of overcrowding — – which are largely disconnected from new development — and fails to account for the reality that housing is also infrastructure and it is every bit as essential as schools, roads, or water and sewer pipes. Halting new housing development does nothing to solve our school problems and it makes our other challenges even harder.

The 2020 update to the County Growth Policy is currently reviewed by the County Council, with work sessions scheduled throughout October. Final action is expected by mid-November. 

4 Responses to “Moratorium Damages County’s Competitiveness and Affordability, Fails to Fix School Capacity Shortfalls”

  1. Alison Gillespie

    Thanks for this excellent post. As a parent of a recent MCPS grad and a current MCPS high school student, I am in complete agreement that the moratorium must end. It is doing far more harm than good for our county and does nothing to fix the problem of overcrowded schools. It also stifles growth and economic productivity and is keeping us from meeting the changing needs of our community, including the need for more housing in transit-oriented neighborhoods like mine. Both of my kids went to overcrowded schools in Silver Spring. The schools are NOT crowded around here due to new development – in fact, there has been almost nothing new built in my school district in 30+ years. My anecdotal experience backs up what the MNCPPC data shows: Neighborhoods like mine have crowded schools because original owners who bought houses in my neighborhood decades ago have moved out and sold their houses to young families who are eager for short commutes. Many of the schools built here long ago were closed and sold off or leased out by MCPS during the early 1980s when enrollment was low. Now we need more schools here again. But the moratorium as it currently stands does not address that problem and almost gives our county executive an excuse for not dealing with it directly. We need MCPS to be more involved in fixing this problem. We need to be more flexible about building schools in urban locations and examining why some school boundaries remain drawn such that there are certain schools that are way under capacity. There are a lot of ways to meet our educational needs. Stopping needed new smart growth and the rebirth of commerce in older neighborhoods should NOT be one of them.

  2. Norman Dreyfuss

    Norman Dreyfuss
    As a developer in Montgomery County and former Planning Board Member, I fully agree with the summary of the problem and it’s devastating impact on new housing production and the Counties economic competitiveness.
    The problem is actually more draconian than Casey Anderson s excellent treatise. Here’s how it really works ( or actually doesn’t). Parents and PTA’s come to the Board and Council w a simple desire.! “Expand our School because it’s overcrowded”. Their goal is not to stop development but overcrowding. The Council buys the idea of shutting off new development w moratoriums (they don’t vote) to push the School Board into solving the problem and, unfortunately, that’s where the logic ends.
    The School Board has no incentive, nor are they controlled by the Council, to solve the problem. They have preset plans w scheduled expansions which may or may not avoid moratoriums. That, they feel is not their main goal. They also know that if they don’t put a school expansion in their 6 year plan the moratorium will not be lifted, so they game the system. They put in a capital expansion program that meets their long term plans and conveniently put the “Moratorium Creator” out 7 years. So now the Council has to add money to their budget if they want to avoid or relieve a moratorium.
    The Council gets this and refuses to play their game, on many occasions, and doesn’t give them the extra “extorted” money. You guessed it: the moratorium that no one really wanted stays in place and the expansion doesn’t take place.
    There has to be a nexus between the moratoriums and those who can relieve them and since the School Board is independent, neither the Council, The Planning Board nor the parents and PTAs can fix the overcrowding they hoped to solve with the moratoriums.
    It’s like punishing yourself for something not in your control.
    The moratoriums should be eliminated and the Council should control the School Board Capital program if they want to solve the problem.

  3. Anonymous

    What you fail to point out is that as a high as impact fees are, they are still below cost recovery. You also fail to point out that you want to cut impact fees, and even when you charge the premium, the fees will still be below cost recovery. The county’s tax base is too shallow to subsidize luxury housing.

    Housing growth has slowed because developers think the market is soft. That’s why they’re scaling back projects. Vacancy rates in Montgomery County have risen faster than the rest of the area because we don’t have enough jobs. Why doesn’t your growth policy address jobs?

  4. MCPS Parent

    Moratoria is a failed policy because it didn’t work as intended. I don’t think anyone would be opposed to getting rid of it if you replaced it with something that did work! No one is saying developers shouldn’t be allowed to develop, but bringing more students when schools are hundreds overcrowded is irresponsible and is dragging down our once reputable school system. The solution cannot be to continue to build, without solving the problem of overcrowded and dilapidated school buildings. Tax-payer giveaways to developers are not the solution.