Rental Housing Study Recommendations Presented on March 2 to Planning Board

March 1, 2017

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Strategies aim to preserve existing rental housing, produce new units and expand affordable housing opportunities countywide

SILVER SPRING, MD – The Montgomery County Planning Department, part of The Maryland-National Capital Park and Planning Commission, briefed the Planning Board on the major recommendations of the countywide Rental Housing Study at its meeting on Thursday, March 2, 2017.  RKG Associates and Lisa Sturtevant and Associates, consulting firms based in Alexandria, Virginia, presented the results of their research, which was conducted on behalf of the Montgomery County Planning Department and the Montgomery County Department of Housing and Community Affairs.

The Rental Housing Study and future planning strategies for affordable housing in the region will be among the topics to be discussed at the last session of the Planning Department’s 2017 Winter Speaker Series on Tuesday, March 21, 2017. The free public event, titled “From Innovative Zoning to Housing for All,” will be held in the Planning Department auditorium from 6 to 7:30 p.m.

Key Findings from Rental Housing Study

Rental housing accounts for about 30 percent of the housing supply in Montgomery County and is concentrated around Metrorail lines and employment centers. Most of the County’s supply consists of older units, with only 14 percent of rental units constructed later than 2000 (55 percent were built prior to 1980).

The study reveals that the supply of rental units is unbalanced at both the lowest and highest ends of the housing market. The market is short about 20,000 rental units for households earning less than 30 percent of area median income, which is about $107,000. As a result, 80 percent of households earning less than 30 percent of area median income are cost burdened.

Key Recommendations from Rental Housing Study

The consultants developed a menu of tools and policies for the County to consider with the aim of preserving existing rental housing, producing new rental units and generating additional financial resources. The tools are grouped into the following four categories:

Recommendations for modifications to the moderately priced dwelling unit (MPDU) program:

-Require a greater percentage of income-controlled units.

-Calculate MPDU requirements based on floor area ratio (FAR) rather than number of units.

-Create a menu of income targets and set-aside percentages from which developers can choose.

-In certain instances, allow developers to build affordable units on alternative sites within the same planning area with approval from the Department of Housing and Community Affairs.

Recommendations proposing modifications to land use and zoning tools:

-Convert underutilized buildings, including schools and offices, into affordable housing.

-Revise current density bonus programs to reflect development costs and economic conditions more accurately.

-Expand use of land owned by the government and non-profits for affordable units.

-Conduct a review of parking requirements, including for MPDUs.

Recommendations expanding preservation strategies:

-Continue the county’s right of first refusal program and identify new funding sources to preserve affordable housing.

-Allow density to be shifted from one part of a site with an existing affordable multifamily rental building(s) to another part of that site in exchange for a portion of the existing affordable housing to be preserved as part of the redevelopment.

-Provide credit counseling for income-qualified households to make them more creditworthy tenants.

-Create a comprehensive inventory of market-rate affordable rental properties.

Recommendations increasing access to and leverage of financial resources:

-Increase county funding for price-controlled rental housing preservation and development.

-Consider a fee or tax paid by property owners for every demolished residential unit.

-Work with Prince George’s County to lobby for a regional set aside of 9 percent credits to produce more units affordable for low-income households.

-Expand a local housing voucher program funded with dedicated resources.

-Develop a tax increment financing program for affordable housing.

-Require a payment to the housing trust fund for smaller projects not subject to MPDU programs to increase resources for acquisition or development of housing.

The final Rental Housing Study will be completed and available for public review by April 2017.

For more information, consult the staff report and March 2 Planning Board presentation online.