Starting on October 31, planning areas with 150 percent of the county’s median income must provide 15 percent MPDUs in new residential developments
Silver Spring, MD – The Montgomery County Planning Department, part of The Maryland-National Capital Park and Planning Commission, has responded to new laws governing the moderately priced dwelling unit (MPDU) program with new tools and information.
Effective on October 31, 2018, planning areas where 45 percent of the census tracts have a median income of 150 percent of Montgomery County’s median income ($100,352) will be subject to a legal requirement to provide 15 percent of the total residential units as MPDUs in new residential developments. This regulation is applied when a developer submits a completed application for a new residential project in such a planning area. Unless mandated otherwise, residential development in other areas will still be required to provide 12.5 percent MPDUs.
In the Bethesda Downtown Sector Plan area, 15 percent MPDUs are already mandatory through the Bethesda Overlay Zone.
Those areas of Montgomery County that are affected by the new law to provide 15 percent MPDUs include Goshen, Lower Seneca, Darnestown, Travilah, Potomac, North Bethesda and Bethesda-Chevy Chase.
The Planning Department has created a digital map documenting those planning areas requiring 15 percent MPDUs for developers and the public. The map can be accessed online at http://arcg.is/Cy4KH.
The MPDU requirement will be calculated every year by the Montgomery County Planning Department and the maps will be updated each year by January 1.
Planning Department’s Rental Housing Study Influence on Changes to MPDU Law
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
Two new laws, Bill 34-17 and Bill 38-17, passed by the County Council in July 2018 made several changes to the county MPDU law to enhance administrative flexibility and clarify provisions of the law. These changes will also take effect on October 31, 2018 and include:
- Connecting MPDU eligibility expressly to household income, in contrast to the MPDU sale price and financing information that was previously the basis for eligibility.
- 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.
- Changing the law governing 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 by building MPDUs at different locations than at the development for which they are required.
- Providing additional flexibility for the Department of Housing and Community Development to negotiate and accept alternative payment and alternative location agreements. Bill 34-17 permits owners of developments with density bonuses and development constraints preventing the construction of required MPDUs to enter into alternative payment agreements and alternative location agreements. Previously, alternate payments and alternative location agreements were only allowed to be placed in different planning areas than that of the development, only after notice, “good cause” and a 30-day comment period are provided to the County Council.
- As stated above, 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 at the time of submission of a completed development application.
- Provisions related to density bonuses were removed from Chapter 25A of the Montgomery County Code with the intention of placing them into Chapter 59, the Zoning Ordinance. A related zoning text amendment (ZTA 18-06) was drafted to revise the current bonus density system and ensure consistency between Chapter 25A and Chapter 59. Council work sessions to refine the ZTA are scheduled for September 20 and 24, 2018.
For more information, contact Lisa Govoni at lisa.govoni@montgomeryplanning.org or 301-650-5624.