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%|
|TOTAL NEW DEVELOPMENT||16,167||23.3%|
|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.