Montgomery County Planning Board Briefed on Draft Preservation of Affordable Housing Study

July 17, 2020

Report provides a guiding framework for policy makers, stakeholders and residents to understand the county’s housing preservation challenges, current initiatives and available strategies to address housing affordability crisis

Silver Spring, MD – Staff from the Montgomery County Planning Department, part of The Maryland-National Capital Park and Planning Commission (M-NCPPC), presented the draft Preservation of Affordable Housing Study to the Montgomery County Planning Board during their virtual public meeting on July 16, 2020. The Preservation of Affordable Housing Study provides a guiding framework for policy makers, stakeholders, and the community to understand Montgomery County’s preservation challenges, current initiatives, and the strategies available to address them. The briefing included a presentation from consultants HR&A Advisors, Inc.; Neighborhood Fundamentals LLC and LSA Planning.

View the July 16, 2020 Planning Board staff report on the Preservation of Affordable Housing Study

View the video of the July 16, 2020 presentation on the Preservation of Affordable Housing Study

View the July 16, 2020 Preservation of Affordable Housing Study presentation

The Planning Board provided feedback about the need to increase housing production while preserving the affordability of existing units.

“We must build more housing if we want to create attainable and equitable housing options for Montgomery County residents,” said Planning Board Chair Casey Anderson. “Preserving existing affordable housing units is critical, but we also need to emphasize the importance of increasing housing supply as a tool to apply downward pressure on rents.”

Montgomery Planning Housing Planner and Project Lead Lisa Govoni says, “The Preservation of Affordable Housing Study provides a deeper understanding of the factors affecting the feasibility of preservation that will help the county determine potential strategies, incentives and interventions to encourage affordable housing preservation through redevelopment and/or rehabilitation.”

The next steps for the study include incorporating into the final report the Board’s feedback. Montgomery Planning also will schedule a briefing for the Montgomery County Council.

The Preservation Study includes findings and recommendations related both to the preservation of deed-restricted units (units that have a subsidy attached), and naturally occurring affordable housing (units that are affordable largely due to the market or physical conditions, including their age, location or other factors).

Key Findings

Deed-restricted units:

  • Deed-restricted units make up 18 percent of units countywide, but over 40 percent of units under 65 percent of Area Median Income (AMI).
  • Overall, the county has been gaining deed-restricted rental housing stock at a faster rate than what is being lost.
  • There are about 1,400 deed-restricted units that are the most at risk of losing affordability when their respective subsidy compliance periods expire over the next two decades, based on a risk assessment completed by the consultant team.

Naturally Occurring Affordable Housing (NOAH):

  • The majority of Montgomery County’s rental multifamily housing stock is affordable to households earning between 60 and 80 percent of Area Median Income.
  • Proximity to transit, building size, income trends and building age are the greatest risk indicators for NOAH to lose affordability.
  • 78 percent of all NOAH housing was built before 1990, with most built from 1960 to 1989.
  • Property ownership transfers correlate closely with rent shifts and loss in NOAH.
  • Proximity to transit is a strong signal for loss in NOAH units with rents under $1,250, especially for stations inside the Beltway.

Recommendations

The Preservation of Affordable Housing Study included recommendations under key policy categories in which different variations of approaches can be used to develop an affordable housing preservation framework for Montgomery County. These recommendations should also be balanced with the county’s need to increase housing production. These categories include:

  1. Strategy and Outreach: Analyzing preservation needs, opportunities, approaches and interventions in the local context; and coordinating and executing efforts (often across agencies) to achieve identified goals and targets.
  2. Land Use and Planning: Using the rules governing or guiding development within Montgomery County (including zoning codes and area plans) to incentivize or require preservation of affordability.
  3. Tenants’ Rights: Leveraging the rules that govern how various stakeholders (owners, property managers, developers) participate in the market to preserve affordability and protect tenants.
  4. Subsidy-Capital Financing & Operating Subsidy/Cost Reduction: Providing the financial resources necessary to undertake preservation interventions. Operating subsidy/cost reduction such as offering incentives and resources that make it financially feasible for landlords/owners to offer reduced rents to lower-income tenants.

For a copy of the report and a full list of findings and recommendations, visit: https://montgomeryplanning.org/planning/housing/preservation-of-affordable-housing/.

The Preservation of Affordable Housing Study follows the briefing to the Planning Board in April on the Housing Needs Assessment. Both the Preservation of Affordable Housing Study and the Housing Needs Assessment are part of a series of completed studies that will inform the goals, policies and actions of Thrive Montgomery 2050, the update to the County’s General Plan.

View the housing studies on Montgomery Planning’s housing website: https://montgomeryplanning.org/planning/housing/

Learn more about Thrive Montgomery 2050: http://thrivemontgomery.com/

Questions, comments? Contact Lisa Govoni, Project Manager, via phone 301-650-5624 or Email.