Montgomery County Housing Policy Needs a Renovation
For nearly half a century, Montgomery County was a pioneer in creating thriving communities while maintaining affordable housing. We established a legacy that ensured working families could afford a home and that our communities were on a path to stable, long-term growth. This played a large role in Montgomery County becoming home to four of the ten most diverse communities in the country. But today, we are at risk of losing that legacy.
By the county’s own estimate, we need 45,000 more affordable housing units over the next 15 years to keep up with demand. Outdated policies and missed development opportunities have only made the situation worse. But if we seize that innovative spirit that made Montgomery County a leader in affordable housing in the past, and build on it with modern policies and new partnerships, we can meet this challenge.
A 1976 policy, groundbreaking at the time, created 15,000 “moderately priced dwelling units,” or MPDU’s. By ensuring that developers would make 12.5% of units affordable, the program ensured that working families could purchase a home in a community they might otherwise have been priced out of. Today, only 3,574 of these units remain and the affordable stock of housing isn’t being replenished.
If we are to maintain Montgomery County’s socio-economic diversity, we must ensure that current residents as well as our children and grandchildren can afford to live here.
Our policies weren’t designed for the way people rent and buy homes today. The old MPDU policy doesn’t factor in all the costs that are part of modern housing—condo fees, HOA fees, and a long list of other expenses that Montgomery County residents have to consider when renting or buying. Homes that that may appear to qualify as affordable housing end up out of reach once these additional costs are taken into account. As housing prices creep upward, affordable housing risks being left behind.
Another challenge is that existing policies are designed to help households making roughly 60% of the area median income (AMI), roughly $66,000 a year for a family of four. Montgomery County has a wide spectrum of families and individuals with different economic situations and housing needs that couldn’t have been foreseen in 1976. Current housing policies fail to support these diverse populations including middle class families and those making less than 50% of AMI.
We can preserve, protect, and expand affordable housing for all of Montgomery County’s 1.1 million residents, promoting balanced growth and ensuring stability for current residents and future generations. Here’s how.
First, increase the Housing Initiative Fund to make the investments we need. The $58 million proposed for FY19 should be $100 million in FY2020 and would allow the county to rehab a significant number of older units that are at risk due to aging structures. More than 65% percent of the county apartments are located in buildings more than 50 years old, and a funding boost can make the difference between restoring those units cost-effectively or losing them to decay and being forced to face the cost of new construction. Montgomery County is proud to have a strong community of affordable housing non-profit organizations who can harness additional resources and energy as part of the effort to revitalize substandard housing.
Second, we need to support new partnerships that spur affordable housing. One example is connecting faith communities that own large tracts of land and are interested in providing affordable housing with developers looking for unique opportunities. Under this model, which has been successful in other areas, the faith community maintains ownership of the land with a long-term lease for the developer. By taking land costs out of the equation, housing costs can be reduced by up to half. In addition to the right policies and incentives, Montgomery County needs to support innovative partnerships.
Third, we need to enter into dialogue with developers and employers to understand effective ways to modernize existing policies and develop new incentives. The county should explore increasing the MPDU requirement from 12.5% to 15% or greater with appropriate offsets, employer supported housing and enhancing cost saving measures to encourage private developers to increase their affordable housing supply.
Socio-economic diversity is the strength of Montgomery County. Affordable housing makes this diversity possible. We must update our housing policies to reflect the current realities and ensure that Montgomery County is a welcoming place for all.