Agenda Item 8C
February 5, 2013
Action
MEMORANDUM
TO:
FROM:
County Council
t~Michael
Faden, Senior Legislative Attorney
Action:
Bill 37-12, Housing
Housing Assessment
SUBJECT:
Capital Improvements Program - Affordable
Planning, Housing and Economic Development Committee recommendation: enact
with one amendment.
Bill 37-12, Housing - Capital Improvements Program - Affordable Housing Assessment,
sponsored by then Council President Berliner and Councilmembers Riemer, Ervin, Floreen,
Leventhal, and Andrews, Council President Navarro and Council Vice-President Rice, was
introduced on November 27, 2012. A public hearing was held on January 15, at which
Department of Housing and Community Affairs Director Richard Nelson, representing the
County Executive, was the only speaker (see testimony, ©12-13). A Planning, Housing and
Economic Development Committee worksession was held on January 17, at which the
Committee recommended that the Bill be enacted with one amendment.
Bill 37-12 would require the Office of Management and Budget to submit an affordable
housing assessment with certain capital projects proposed in the County Capital Improvements
Program. The purpose of the assessment is to advise the Council whether each proposed project
should include an affordable housing element.
Cost
The OMB fiscal impact statement (see ©5-9), received on January 15, concluded
that implementing this Bill would cost about $163,000 annually. Most of that amount is for 85%
of a full-time OMB budget analyst, in addition to staff time at the Department of General
Services (DGS) and Department of Housing and Community Affairs (DHCA). Since the impact
statement (on ©6) assumes that 5 proj ects a year will be reviewed, Council staff is skeptical that
this workload would by itself warrant the hiring of another budget analyst and some of the other
claimed expenses. In any case, if this Bill is enacted the necessary funding will be decided in the
operating budget.
Committee amendment
The County Attorney (see memo, ©1O-11) raised questions
about the provision on ©3, lines 27-29, which would let the Council by resolution exempt from
the assessment requirement "a category of capital projects which by their nature do not require
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an affordable housing analysis". The County Attorney concluded that any exemption must be
done by legislation, rather than Council resolution not signed by the Executive, despite a similar
provision in County Code §31-68(d) (enacted in Bill 8-07, bicycle and pedestrian impact
analysis) having been passed without Executive branch objection. After discussion the
Committee voted to delete this provision.
Councilmember Floreen amendment
After the Committee worksession Committee
Chair Floreen prepared the amendment on
14-15.
It
includes a revised version of the provision
that the Committee deleted as well as several other mainly technical changes, all shown in
double underlines and double brackets. This amendment incorporates the amendment the
County Attorney suggested, which would let the Executive exempt classes of projects by a
Method
1
regulation that would be subject to Council approval, and would also let the Council
exempt classes of projects in the capital budget resolution, which is subject to Executive
disapprovaL
This packet contains:
Bill 37-12
Legislative Request Report
Fiscal and economic impact statement
County Attorney memo
Executive hearing testimony
Councilmember Floreen amendment
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Bill No.
37-12
Concerning: Capital
Improvements
Program -
Affordable Housing
Assessment
Revised: 1-30-13
Draft No. 5
Introduced:
November 27,2012
Expires:
May 27, 2014
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: _ _ _ _ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmembers Berliner, Riemer, Ervin, Floreen, Leventhal, Andrews, Council President
Navarro and Council Vice-President Rice
AN
ACT
to:
(1)
(2)
require the Office of Management and Budget to submit affordable housing
assessments with certain capital projects in the Capital Improvements Program;
authorize the Council to require other County departments and agencies to
supplement the assessments furnished by the Office of Management and Budget;
and
generally amend County law regarding the analysis of capital projects.
(3)
By amending
Montgomery County Code
Chapter 25B, Housing Policy
Section 25B-7
Boldface
Underlining
[Single boldface brackets]
D.!Luble underlining
[[Double boldface bracketsD
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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BILL NO.3? -12
1
2
Sec. 1. Section 25B-7 is amended as follows:
25B-7.
(ill
[Reserved] Affordable housing assessment.
F or each applicable capital project in the Capital Improvements
Program, the Office of Management and Budget must include in or
transmit with the CIP an analysis of:
3
4
5
6
7
8
ill
ill
ill
the feasibility of including
£!
significant amount of affordable
housing in the project;
the effect of the project on the supply of affordable housing in the
immediate area; and
what capital or operating modifications, if any, would promote
and maximize affordable housing in the project and the
immediate area.
9
10
11
12
13
14
15
16
®
The affordable housing analysis submitted
.Qy
OMB should discuss at
least the following issues related to the capital project:
ill
ill
ill
ffi
{£)
compatibility of affordable housing with the underlying project;
conformity of affordable housing to applicable zoning and land
use plans;
proximity to public transit, and availability of other transportation
options; and
proximity to other community services.
17
18
19
20
21
22
As used in this section, applicable capital project means any building
project administered
.Qy
the Department of General Services or the
Parking Management Division ofthe Department of Transportation.
23
24
@
In performing its analysis, OMB should consult the Department of
Housing and Community Affairs, the Planning Board, and any other
County department or agency with expertise in affordable housing.
25
26
@-F:\LAW\BILLS\1237 Housing-CIP-Affordable Housing\BiII5 PHED.Doc
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BILL
NO.3? -12
27
[[.@2
The Council may
Qy
resolution exempt from this Section
~
category of
capital projects which
Qy
their nature do not reqUire an affordable
housing analysis.]]
Approved:
28
29
30
31
Nancy Navarro, President, County Council
Date
32
Approved:
33
Isiah Leggett, County Executive
Date
34
This is a correct copy o/Council action.
35
Linda M. Lauer, Clerk of the Council
Date
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LEGISLATIVE REQUEST REPORT
Housing
DESCRIPTION:
Bill 37-12
Capital Improvements Program
~Affordable
Housing
Requires the Office of Management and Budget to submit an
affordable housing assessment with certain capital projects proposed
in the County Capital Improvements Program. The purpose of the
assessment is to advise the Council whether each proposed project
should include an affordable housing element
The potential for including an affordable housing element in each
County Capital Improvements Program projects is not routinely
assessed.
To find more County projects that could feasibly include an
affordable housing element.
Office of Management and Budget, Department of Housing and
Community Affairs, Planning Board
To be requested.
To be requested.
To be requested.
To be researched.
Michael Faden, Senior Legislative Attorney, 240-777-7905
Applies only to County Capital Improvements Program.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINA TION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENAL TIES:
.
Not applicable
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Fiscal Impact Statement
Council Bill 37-12 Housing - Capital Improvements Program - Affordable Housing
Assessment
1.
Legislative Summary.
'This Bill requires the Office of Management and Budget to submit an affordable housing
analysis with certain capital projects proposed in the County Capital Improvements
Program to be included in, or transmitted with, the CIP for projects administered by DOS
or the Parking Management Division of DOT. The purpose of the analysis is to advise
the Council whether each proposed project should include an affordable housing
component.
2. An estimate of changes in County revenues and expenditures regardless of whether
the revenues or expenditures are assumed in the recommended or approved budget.
Includes source of information, assumptions, and methodologies used.
No additional revenues are expected to be generated from this bill. The bill would result
in a three step process; (1)
An
initial assessment of projects; (2) those identified in the
initial screening process will move forward into the facility planning process where a
more detailed assessment of the programmatic feasibility of including affordable housing
will be done; and (3) an assessment ofthe financial feasibility for inclusion as a
component ofthe project. Expenditures would relate to the staff time required by each
department involved in the analysis including the Department ofOeneral Services,
Department of Housing and Community Affairs, Department of Transportation and the
Office ofManagement and Budget. Expenditures would also include an increase
in
resources available to the Capital Budget for facility planning to accommodate feasibility
assessments. The following chart depicts the estimated costs.
Table 1: Estimated Costs of Affordable Housing Facility Assessment
~------~------~------------------------------I---------------------'
Department Activity
Assumptions
1
Estimated Cost
I. Costs related to analyze tbe feasibility of including affordable housing in tbe project
DOS staff review
of
the feasibility of
affordable
housing
• Work with DHCA and OMB
to
provide an
initial assessment
of
candidate projects
for
affordable housing.
The $50,000 estimate
in
the
Facility Planning
project
includes
both DOS
staff
and
consultant
• Facility planning activities: Development of
Program of Requirements (POR), feasibility
study
to include
a test fit,
traffic
study,
parking study, and building
height
feasibility.
• Coordinate with consultants and monitor
consultant activities.
• Development ofpreliminary cost estimates
used by DHCA to determine likely
gap
financing
needs.
costs .
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~.
Facility PJanning CIP:
• Assuming an average of five projects in
facility planning per year (based on likely
candidate projects currently in the Facility
Planning PDF)
$10,000 per project; total ofan
additional $50,000
in
the Facility
Planning PDF for each of the six
years. (currently $260,000;
would increase to $310,000 per
year)
DHCA staff review
and assessment of
public facilities for
inclusion ofaffordable
housing
Initial Review Phase:
• Obtain and review information from
DGS/DOT regarding the proposed project to
assess the feasibility and desirability of
affordable housing on the project site.
• Neighborhood and site visit for overall
feasibllity.
• Obtain and evaluate neighborhood
demographic information.
• In concert with DGS, develop an estimate of
housing construction and operating costs and
likely affordable housing project revenue in
order to detennine estimated gap funding
needed to make the project financing work.
• Internal DHCA discussions and drafting
recommendations.
!
$1,040 per project ($43.30 per
hour @ 24 brs per project) (Costs
assumptions are based on a Sr.
Planning Specialist position,
Grade 25 @ $90,000. Average 5
projects per year - $5,200). The
work associated with determining
gap fmancing will be done
through the routine review
process thus not needing
additional expenditures
associated with the assessment.
OMB staff review the
assessment conducted
by DGS and Dl:rCA
This requires:
• Development of a review process.
• Coordination of participating departments or
agencies.
• Review and analysis of assessments and
assumptions.
• Program of requirements (POR) development
and review to include the affordable housing
components.
• Analysis ofthe complex financing
components that fund affordable housing,
1 IT Management and Budget
Specialist ($126,930
=
I FTE;
includes estimate for retirement,
FICAIM:edicare, life insurance,
and health insurance); 1,768
hours per year, $126,930 @ 85%
=-
$107,891.
DOT, Parking
Management Division
DOT has generally developed affordable
housing lUlits in conjlUlction with private
partners which helps control County project
costs. If the Department of Transportation
builds its own affordable housing, the non-
parking component will
ne~d
to
be
funded with
non-parking resources.
~
There currently are no projects in
facility planning that do not
already contain affordable
housing.
It
is not envisioned that
future projects will rebuild a free
standing garage with out offering
the property to the private sector
for redevelopment
with
a caveat
ofrequiring affordable housing.
Assuming that current level of
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i
I
effort garage maintenance
projects are exempt from this
analysis, there are no planned
additional expenditures.
SO/Jrces: DepartmenJ ofGeneral Services, Department ofHousing and Community Affairs, Department o/Transportation and Office
ofManagement and Budget
3. Revenue and expenditure estimates covering at least the next 6 fiscal years.
Expenditure estimates covering the next six fiscal years is $163,091 annually; x 6
=
$978,546.
In
order to achieve the ultimate goal of including an affordable housing component in a
County capital proj ect, funding for the Affordable Housing Acquisition and Preservation
project must be budgeted when including affordable housing to assure the availability of
gap funding when the project is built. A finn estimate of the County gap finanCing cost
will be detennined during the facility planning phase; however,
at
the initial submission.
$5 million should be generally considered as a place holder.
4. An actuarial analysis through the entire amortization period for· each bill that would
affect retiree pension or group insurance costs.
Not Applicable
5. Later actions that may affect future revenue and expenditures if the bill authorizes
future spending.
This Bill does not authorize future spending.
6. An estimate of the staff time needed to implement the bill.
• DHCA activities and staff time for a typical project: 24 hours; 1% of 1 PTE
• UMB
staff time: 1,768 hours; 85% of 1 PTE (to encompass
all
likely candidate CIP
projects)
• DOS staff time: 32 hours per project; 1.2% of 1 FTE
7.
An explanation
,of
how the addition of new staff responsibilities would affect other
duties.
Per project staiftime estimated in #6 above needs to be mUltiplied by the number of
projects annually submitted for funding to determine the
nlll
extent of staff time required.
If additional staffing is not provided for this function, other work
will
need to
reprioritized.
8. An estimate of costs when an additional appropriation is needed.
See items #2 and 3 above.
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9. A description of any variable that could affect revenue and cost estimates.
The costs for providing the requested analysis will vary based on the number of projects
considered along with the project complexity will be large costs drivers.
In
order to achieve the ultimate goal of providing more affordable housing, financing gap
subsidies andlor operating subsidies are likely to be needed. The total number of
'
residential units, the number of below market affordable units, the depth of subsidy (60%
ofarea median income, 50% AMI andlor 30% AMI). and the federal or state subsidy
available at time of construction, all affect estimates of the County share of costs.
10. Ranges of revenue or expenditures that are uncertain or difficult to project.
Not Applicable
11.
If
a bill is likely to have no fiscal impact, why that is the case.
Not Applicable
12. Other fiscal impacts or comments.
Not Applicable
13.
The following contributed to and concurred with this analysis:'
Richard Y. Nelson, Director, DHCA
Tim Goetzinger, Budget and Finance Manager, DHCA
Jay Green, Division of Housing, DHCA
Angela Dizelos, Central Services Division, DGS
Greg Ossont, Deputy Director Planning and Development, DGS
Al Roshdieh, Parking Management Division, DOT
Rick Siebert, Parking Management Division, DOT
Jennifer Bryant, Office of Management Budget
(j)
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Economic Impact Statement
Council Bill 37-12, Housing - Capital Improvements Program - Affordable Housing
Assessment
Background:
Council Bill 37-12 requires the Office of Management and Budget to submit an
affordable housing assessment for projects administered by the Department of
General Services or the Parking Management Division of the Department of
Transportation. The purpose of the bill is to advise the County Council about
which projects should include affordable housing.
1.
The sources of information, assumptions, and methodologies used.
See
#3
below.
2. A
description of any variable that could affect economic impact statements.
See
#3
below.
3. The bill's positive or negative effect, if any on employment, spending, saving.
investment, incomes, and property value
in
the County.
Not applicable. The subject legislation does not have an economic impact because it only
requires that the Executive branch advise the Council on the suitability of including
affordable housing in certain County projects.
4.
If
a
bill is likely to have no economic impact, why is that the case?
See
#3
above.
5.
The following contributed to and concurred with this analysis: David Platt and Mike
Coveyou, Finance.
Date
t#tt-;!z-
I
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Jsiah
Leggtltt
CI)Wl~V
En'{'lltivC'
Marc P.
Hansen
Caumy Attorney
M
~:
1\1 0 RAN)} U !\II
January
2,2013
TO:
Mnry Beck
Office of Management and Budget
VfA:
y
.,
Marc P.
HanSlm
l1f"
County
A110rney
:t't
lJ
/")
FROM: ClitTord L
Royalty
t)·~,L-.,
Chief: Division of Zoning, Land Usc,
&
Economic Development
RE:
Bill 37- 12,
HUlIsing -
Capital.
Improvt'1nents Program - Affordable Housing AssessmeJ1t
11.le County Executive's
office
has requested our comments on HJl1 37..
12.
As is
discussed more
fully
helow, we have a substantive legal
concem
abQut the
mil.
BaekgrouDf~
Bill 37-12 proposes to amend Chnptcr 25B ("Housing Policy") with a new
§
25B-7. The
new
St.'Ct1011
would,
infer alia,
require the
()ffic·e~
of Management and Budget to "transmit with
the CIP"
itO
"analysis"
of the amlrdablc hOllsing impucts of any
"applicable
capital
project."
An
"applicable capital
projCl:t" means "any
building
proj<.:ct
admini5tt'I'cd
by
th~
Department
of
General Services
or
the
Parking
Mrulag<"'lTItmt
Division of the
DeparlJ:nent of TranSPQrt.ltion."
The Bill would authorize the Council,
"by
resolution," to
"exempt from"
the new
section
"~t
category
(If
capital projects which
by
their nature do
not reql.'lire
an
affordable
housing analysis."
Discussion
Article
XI-A
of
the
Mttryl and Constitution
"tmthorizk'S
counties to adopt home rule
cil.rrtcrs
which .. - function as 'constitutions'
fhr
the counties adopting them:
lvfon/gamery
Cmm~y,
MaiTland v, Anchor fun
SeafoQd
Restauram,
374 Md.
327.331
(2003). As des<:ribed
hy
the Court of Appeals,
a
charter "is the organic, the
fUndamental
law, establishing
ba~ic
pdndpll!s
governing relationships between the govt..'ITlment and the people, and anmng the y;mous
governmental
branches
and
bvdies.'~ Ch(;~(:,ks
v.
Cedlair,
287Md,
595,507
(l980),
'The Charter
is the local equi valent of
ll.
constitution.
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Mary Beck
Page 2
Pursuant to Article XI-A, the County,
in
1968.
ad~)pted
a
charter
that divides the County
g01lenunent into
legislati
ve
and
executive
branches anddclineatcs the authority
~)f
each.
Sce
Charter olA101ttgolt!ery Caunt;.v,
,\tfaJ:vland,
§§
101
and
20/.
Section 101
vests
legislative
pQ\vcr
in the County Council and§ 201 vests executive power
ill
the County Executive. Legislative
enactments are
subject
to
§
208 of the
Ch'lrter
which states that any legislative enactment ofthe
Council must
be
·'dclivt.'1ed"
t()
the
County
Execlilive
uwho ...
shall approve or disapprove
it."
A legislative enactment makes law or prescribes policy. Sce
Scull
v.
Muntgomel:v
('iti:lens League,
249 Md. 27l, 282 (1968);
McQuillin, .Hunic{pai Corporations,
§ 10:6. A
resolution,
by
contrast, "denotes something less solemn or fbrmal , .. [and] generally
spe~lkil1g
I
is simply an expressiun. of opinion or
mind
conC<.'Tning
sOnlcparticular
item ofhusin(''Ss
eoming
within the legislative body's official cognizance .. , ."
Inlet tfssochu.\'i
11,
Assateaglle
Flouse
Condomlnium
Ass()ciatiorl.
313 Md. 413, 428
(t
988),
The Bill penni!s lhe
Omncit,
by
resolution, to
exempt
certain
undetine-d
projects
from
the Bill's rctluircments. Determining the
scope
of a law is a legislative act. Under the Charter, a
legislative a.ct must be effected through the enactment oflcgislation
under
§
208 of the
Chalier,
The Bill circumvents that process by allowing the Council to, in effect, amend the
hf'N
by
resolution.
The Bill thus
violates
§
208 of the Charter.
This teg<d Infin.nHy
may,
howev~1
be
remedied
by
amending
Ule
bill to authQrize the
Executive to adopt a Method
(t)
or (2) regulation
to
ex.empt from the scope of the bi.H
detined
classes
ofprojeets
(but
would have a
de mininiis
impact
on
affordable housing.
Please contact us
if
you would like:
t<)
discuss
our
opinion.
Cc:
Kathleen Boucher,
AsSistant
Chief
Administrative
Of1kt-'1'
Michael Faden, Sen.ior Legislutive Attorney
@
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TESTl.!'1ONY OF RICHARD
Y.
NELSON, JR.
DIRECTOR, DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS
MONTGOMERY COUNTY COUNCIL PUBLIC HEARING
BILL
37-12,
HOUSING­
CAPITAL IMPROVEMENTS PROGRAM - AFFORDABLE HOUSING ASSESSMENT
Good afternoon. My name is Rick Nelson. I am the Director of the Montgomery
County Department of Housing and Community Affairs (DHCA). I am testifying
on behalf of County Executive Isiah Leggett.
Affordable Housing has been a priority of the County Executive during his entire
tenure as County Executive. He is supportive of this bill and its intent to ensure an
analysis is performed regarding the appropriateness and feasibility of including
affordable housing with projects submitted to the Council.
The increasing unavailability of buildable land for housing makes it imperative that
we explore all avenues
foi
expanding the supply of affordable housing. This
process has begun. At the direction of the Executive, DHCA consults with other
departments about the co-location of housing with other governmental facilities.
For example, we are working with a developer for the development of affordable
housing adjacent to the new Silver Spring Library. Affordable housing
was
part of
the requirements for the redevelopment of parking lots
3, 16.
and
31.
We are
currently exploring the development of affordable housing at the site ofthe new
Fire Station (#23) to be located
in
White Flint. Similarly, plans are being
developed for affordable housing to be co-located with the proposed parking
facility at the Conference Center.
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PH Testimony Bill
37-12,
Housing -CIP-Affordable Housing Assessment
Page 2
While' supportive of the Bill and its intent, I should point out there are some costs,
both staff time and money, involved in the preparation of the required analyses.
In
addition, a major issue, I am concerned about is funding and timing of funding for
the fmancing gap and/or operating funding shortfalls due to reduced rental income
from the affordable units. The inability to forward fund such shortfalls might
make, what would otherwise be a feasible and appropriate project, financially
impractical at the time of the CIP construction.
We will work with your staff to provide some suggested changes to the Bill's
language aimed at improving clarity and conforming with the Charter.
In
conclusion, I repeat the support ofthe County Executive of this Bill and all steps
we can take to add affordable housing to the inventory of housing in the County.
We stand ready to work with Councilmembers during your subsequent
worksessions.
DHCA: 1110/2013
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AMENDMENT
To Bil137-12
BY COUNCILMEMBER FLOREEN
Sec.
1.
Section 25B-7 is amended as follows:
25B-7.
[Reserved] Affordable housing assessment.
For each applicable capital project in the Capital Improvements
Program during facility planning, the Office of Management and
Budget must include in or transmit with the CIP an [[analysis))
evaluation of:
W
ill
ill
the feasibility of including
housing in the project;
~
significant amount of affordable
the effect of the project on the supply of affordable housing in the
immediate area; [[and))
ill
what
capital or operating modifications, if any, would promote
and maximize affordable housing in the project and the
immediate area: and
(±l
what operating budget modifications. if any. would be needed to
build and maintain affordable housing in the project.
(Q)
The affordable housing [[analysis]) evaluation submitted
by
OMB
should discuss at least the following issues related to the capital project:
ill
ill
ill
ill
compatibility of affordable housing with the underlying project;
conformity of affordable housing to applicable zoning and land
use plans;
proximity to public transit, and availability of other transportation
options; and
proximity to other community services.
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(£)
As used in this section, applicable capital project means any pto,posed
building project administered
.by
the Department of General Services or
the Parking Management Division ofthe Department of Transportation.
@
In performing its analysis, OMB should consult the Department of
Housing and Community Affairs, the Planning Board, the Housing
Opportunities Commission, and any other County department or agency
with expertise in affordable housing.
[[W
The Council may
.by
resolution exempt from this Section
~
category of
capital projects which
.by
their nature do not require an affordable
housing analysis.]]
W
The Council may in the capital budget resolution. and the County
Executive may by Method 1 regulation. exempt from this Section a
category of capital projects which by their nature do not . require an
affordable housing analysis.
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Agenda Item 8C
February 5, 2013
Action
MEMORANDUM
TO:
FROM:
County Council
t~Michael
Faden, Senior Legislative Attorney
Action:
Bill 37-12, Housing
Housing Assessment
SUBJECT:
Capital Improvements Program - Affordable
Planning, Housing and Economic Development Committee recommendation: enact
with one amendment.
Bill 37-12, Housing - Capital Improvements Program - Affordable Housing Assessment,
sponsored by then Council President Berliner and Councilmembers Riemer, Ervin, Floreen,
Leventhal, and Andrews, Council President Navarro and Council Vice-President Rice, was
introduced on November 27, 2012. A public hearing was held on January 15, at which
Department of Housing and Community Affairs Director Richard Nelson, representing the
County Executive, was the only speaker (see testimony, ©12-13). A Planning, Housing and
Economic Development Committee worksession was held on January 17, at which the
Committee recommended that the Bill be enacted with one amendment.
Bill 37-12 would require the Office of Management and Budget to submit an affordable
housing assessment with certain capital projects proposed in the County Capital Improvements
Program. The purpose of the assessment is to advise the Council whether each proposed project
should include an affordable housing element.
Cost
The OMB fiscal impact statement (see ©5-9), received on January 15, concluded
that implementing this Bill would cost about $163,000 annually. Most of that amount is for 85%
of a full-time OMB budget analyst, in addition to staff time at the Department of General
Services (DGS) and Department of Housing and Community Affairs (DHCA). Since the impact
statement (on ©6) assumes that 5 proj ects a year will be reviewed, Council staff is skeptical that
this workload would by itself warrant the hiring of another budget analyst and some of the other
claimed expenses. In any case, if this Bill is enacted the necessary funding will be decided in the
operating budget.
Committee amendment
The County Attorney (see memo, ©1O-11) raised questions
about the provision on ©3, lines 27-29, which would let the Council by resolution exempt from
the assessment requirement "a category of capital projects which by their nature do not require
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an affordable housing analysis". The County Attorney concluded that any exemption must be
done by legislation, rather than Council resolution not signed by the Executive, despite a similar
provision in County Code §31-68(d) (enacted in Bill 8-07, bicycle and pedestrian impact
analysis) having been passed without Executive branch objection. After discussion the
Committee voted to delete this provision.
Councilmember Floreen amendment
After the Committee worksession Committee
Chair Floreen prepared the amendment on
14-15.
It
includes a revised version of the provision
that the Committee deleted as well as several other mainly technical changes, all shown in
double underlines and double brackets. This amendment incorporates the amendment the
County Attorney suggested, which would let the Executive exempt classes of projects by a
Method
1
regulation that would be subject to Council approval, and would also let the Council
exempt classes of projects in the capital budget resolution, which is subject to Executive
disapprovaL
This packet contains:
Bill 37-12
Legislative Request Report
Fiscal and economic impact statement
County Attorney memo
Executive hearing testimony
Councilmember Floreen amendment
F:\LAW\BILLS\1237 Housing-C1P-AtTordable Housing\Action Memo.Doc
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#
1
4
5
10
12
14
2
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Bill No.
37-12
Concerning: Capital
Improvements
Program -
Affordable Housing
Assessment
Revised: 1-30-13
Draft No. 5
Introduced:
November 27,2012
Expires:
May 27, 2014
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: _ _ _ _ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmembers Berliner, Riemer, Ervin, Floreen, Leventhal, Andrews, Council President
Navarro and Council Vice-President Rice
AN
ACT
to:
(1)
(2)
require the Office of Management and Budget to submit affordable housing
assessments with certain capital projects in the Capital Improvements Program;
authorize the Council to require other County departments and agencies to
supplement the assessments furnished by the Office of Management and Budget;
and
generally amend County law regarding the analysis of capital projects.
(3)
By amending
Montgomery County Code
Chapter 25B, Housing Policy
Section 25B-7
Boldface
Underlining
[Single boldface brackets]
D.!Luble underlining
[[Double boldface bracketsD
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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BILL NO.3? -12
1
2
Sec. 1. Section 25B-7 is amended as follows:
25B-7.
(ill
[Reserved] Affordable housing assessment.
F or each applicable capital project in the Capital Improvements
Program, the Office of Management and Budget must include in or
transmit with the CIP an analysis of:
3
4
5
6
7
8
ill
ill
ill
the feasibility of including
£!
significant amount of affordable
housing in the project;
the effect of the project on the supply of affordable housing in the
immediate area; and
what capital or operating modifications, if any, would promote
and maximize affordable housing in the project and the
immediate area.
9
10
11
12
13
14
15
16
®
The affordable housing analysis submitted
.Qy
OMB should discuss at
least the following issues related to the capital project:
ill
ill
ill
ffi
{£)
compatibility of affordable housing with the underlying project;
conformity of affordable housing to applicable zoning and land
use plans;
proximity to public transit, and availability of other transportation
options; and
proximity to other community services.
17
18
19
20
21
22
As used in this section, applicable capital project means any building
project administered
.Qy
the Department of General Services or the
Parking Management Division ofthe Department of Transportation.
23
24
@
In performing its analysis, OMB should consult the Department of
Housing and Community Affairs, the Planning Board, and any other
County department or agency with expertise in affordable housing.
25
26
@-F:\LAW\BILLS\1237 Housing-CIP-Affordable Housing\BiII5 PHED.Doc
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BILL
NO.3? -12
27
[[.@2
The Council may
Qy
resolution exempt from this Section
~
category of
capital projects which
Qy
their nature do not reqUire an affordable
housing analysis.]]
Approved:
28
29
30
31
Nancy Navarro, President, County Council
Date
32
Approved:
33
Isiah Leggett, County Executive
Date
34
This is a correct copy o/Council action.
35
Linda M. Lauer, Clerk of the Council
Date
0F:\LAW\BILLS\1237 Housing-CIP-Affordable Housing\BiII5 PHED.Doc
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LEGISLATIVE REQUEST REPORT
Housing
DESCRIPTION:
Bill 37-12
Capital Improvements Program
~Affordable
Housing
Requires the Office of Management and Budget to submit an
affordable housing assessment with certain capital projects proposed
in the County Capital Improvements Program. The purpose of the
assessment is to advise the Council whether each proposed project
should include an affordable housing element
The potential for including an affordable housing element in each
County Capital Improvements Program projects is not routinely
assessed.
To find more County projects that could feasibly include an
affordable housing element.
Office of Management and Budget, Department of Housing and
Community Affairs, Planning Board
To be requested.
To be requested.
To be requested.
To be researched.
Michael Faden, Senior Legislative Attorney, 240-777-7905
Applies only to County Capital Improvements Program.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINA TION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENAL TIES:
.
Not applicable
F:\LA WIBILLS\1237 Housing-CIP-Affordable HousinglLEG ISLATIVE REQUEST REPORT. Doc
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Fiscal Impact Statement
Council Bill 37-12 Housing - Capital Improvements Program - Affordable Housing
Assessment
1.
Legislative Summary.
'This Bill requires the Office of Management and Budget to submit an affordable housing
analysis with certain capital projects proposed in the County Capital Improvements
Program to be included in, or transmitted with, the CIP for projects administered by DOS
or the Parking Management Division of DOT. The purpose of the analysis is to advise
the Council whether each proposed project should include an affordable housing
component.
2. An estimate of changes in County revenues and expenditures regardless of whether
the revenues or expenditures are assumed in the recommended or approved budget.
Includes source of information, assumptions, and methodologies used.
No additional revenues are expected to be generated from this bill. The bill would result
in a three step process; (1)
An
initial assessment of projects; (2) those identified in the
initial screening process will move forward into the facility planning process where a
more detailed assessment of the programmatic feasibility of including affordable housing
will be done; and (3) an assessment ofthe financial feasibility for inclusion as a
component ofthe project. Expenditures would relate to the staff time required by each
department involved in the analysis including the Department ofOeneral Services,
Department of Housing and Community Affairs, Department of Transportation and the
Office ofManagement and Budget. Expenditures would also include an increase
in
resources available to the Capital Budget for facility planning to accommodate feasibility
assessments. The following chart depicts the estimated costs.
Table 1: Estimated Costs of Affordable Housing Facility Assessment
~------~------~------------------------------I---------------------'
Department Activity
Assumptions
1
Estimated Cost
I. Costs related to analyze tbe feasibility of including affordable housing in tbe project
DOS staff review
of
the feasibility of
affordable
housing
• Work with DHCA and OMB
to
provide an
initial assessment
of
candidate projects
for
affordable housing.
The $50,000 estimate
in
the
Facility Planning
project
includes
both DOS
staff
and
consultant
• Facility planning activities: Development of
Program of Requirements (POR), feasibility
study
to include
a test fit,
traffic
study,
parking study, and building
height
feasibility.
• Coordinate with consultants and monitor
consultant activities.
• Development ofpreliminary cost estimates
used by DHCA to determine likely
gap
financing
needs.
costs .
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~.
Facility PJanning CIP:
• Assuming an average of five projects in
facility planning per year (based on likely
candidate projects currently in the Facility
Planning PDF)
$10,000 per project; total ofan
additional $50,000
in
the Facility
Planning PDF for each of the six
years. (currently $260,000;
would increase to $310,000 per
year)
DHCA staff review
and assessment of
public facilities for
inclusion ofaffordable
housing
Initial Review Phase:
• Obtain and review information from
DGS/DOT regarding the proposed project to
assess the feasibility and desirability of
affordable housing on the project site.
• Neighborhood and site visit for overall
feasibllity.
• Obtain and evaluate neighborhood
demographic information.
• In concert with DGS, develop an estimate of
housing construction and operating costs and
likely affordable housing project revenue in
order to detennine estimated gap funding
needed to make the project financing work.
• Internal DHCA discussions and drafting
recommendations.
!
$1,040 per project ($43.30 per
hour @ 24 brs per project) (Costs
assumptions are based on a Sr.
Planning Specialist position,
Grade 25 @ $90,000. Average 5
projects per year - $5,200). The
work associated with determining
gap fmancing will be done
through the routine review
process thus not needing
additional expenditures
associated with the assessment.
OMB staff review the
assessment conducted
by DGS and Dl:rCA
This requires:
• Development of a review process.
• Coordination of participating departments or
agencies.
• Review and analysis of assessments and
assumptions.
• Program of requirements (POR) development
and review to include the affordable housing
components.
• Analysis ofthe complex financing
components that fund affordable housing,
1 IT Management and Budget
Specialist ($126,930
=
I FTE;
includes estimate for retirement,
FICAIM:edicare, life insurance,
and health insurance); 1,768
hours per year, $126,930 @ 85%
=-
$107,891.
DOT, Parking
Management Division
DOT has generally developed affordable
housing lUlits in conjlUlction with private
partners which helps control County project
costs. If the Department of Transportation
builds its own affordable housing, the non-
parking component will
ne~d
to
be
funded with
non-parking resources.
~
There currently are no projects in
facility planning that do not
already contain affordable
housing.
It
is not envisioned that
future projects will rebuild a free
standing garage with out offering
the property to the private sector
for redevelopment
with
a caveat
ofrequiring affordable housing.
Assuming that current level of
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i
I
effort garage maintenance
projects are exempt from this
analysis, there are no planned
additional expenditures.
SO/Jrces: DepartmenJ ofGeneral Services, Department ofHousing and Community Affairs, Department o/Transportation and Office
ofManagement and Budget
3. Revenue and expenditure estimates covering at least the next 6 fiscal years.
Expenditure estimates covering the next six fiscal years is $163,091 annually; x 6
=
$978,546.
In
order to achieve the ultimate goal of including an affordable housing component in a
County capital proj ect, funding for the Affordable Housing Acquisition and Preservation
project must be budgeted when including affordable housing to assure the availability of
gap funding when the project is built. A finn estimate of the County gap finanCing cost
will be detennined during the facility planning phase; however,
at
the initial submission.
$5 million should be generally considered as a place holder.
4. An actuarial analysis through the entire amortization period for· each bill that would
affect retiree pension or group insurance costs.
Not Applicable
5. Later actions that may affect future revenue and expenditures if the bill authorizes
future spending.
This Bill does not authorize future spending.
6. An estimate of the staff time needed to implement the bill.
• DHCA activities and staff time for a typical project: 24 hours; 1% of 1 PTE
• UMB
staff time: 1,768 hours; 85% of 1 PTE (to encompass
all
likely candidate CIP
projects)
• DOS staff time: 32 hours per project; 1.2% of 1 FTE
7.
An explanation
,of
how the addition of new staff responsibilities would affect other
duties.
Per project staiftime estimated in #6 above needs to be mUltiplied by the number of
projects annually submitted for funding to determine the
nlll
extent of staff time required.
If additional staffing is not provided for this function, other work
will
need to
reprioritized.
8. An estimate of costs when an additional appropriation is needed.
See items #2 and 3 above.
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9. A description of any variable that could affect revenue and cost estimates.
The costs for providing the requested analysis will vary based on the number of projects
considered along with the project complexity will be large costs drivers.
In
order to achieve the ultimate goal of providing more affordable housing, financing gap
subsidies andlor operating subsidies are likely to be needed. The total number of
'
residential units, the number of below market affordable units, the depth of subsidy (60%
ofarea median income, 50% AMI andlor 30% AMI). and the federal or state subsidy
available at time of construction, all affect estimates of the County share of costs.
10. Ranges of revenue or expenditures that are uncertain or difficult to project.
Not Applicable
11.
If
a bill is likely to have no fiscal impact, why that is the case.
Not Applicable
12. Other fiscal impacts or comments.
Not Applicable
13.
The following contributed to and concurred with this analysis:'
Richard Y. Nelson, Director, DHCA
Tim Goetzinger, Budget and Finance Manager, DHCA
Jay Green, Division of Housing, DHCA
Angela Dizelos, Central Services Division, DGS
Greg Ossont, Deputy Director Planning and Development, DGS
Al Roshdieh, Parking Management Division, DOT
Rick Siebert, Parking Management Division, DOT
Jennifer Bryant, Office of Management Budget
(j)
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Economic Impact Statement
Council Bill 37-12, Housing - Capital Improvements Program - Affordable Housing
Assessment
Background:
Council Bill 37-12 requires the Office of Management and Budget to submit an
affordable housing assessment for projects administered by the Department of
General Services or the Parking Management Division of the Department of
Transportation. The purpose of the bill is to advise the County Council about
which projects should include affordable housing.
1.
The sources of information, assumptions, and methodologies used.
See
#3
below.
2. A
description of any variable that could affect economic impact statements.
See
#3
below.
3. The bill's positive or negative effect, if any on employment, spending, saving.
investment, incomes, and property value
in
the County.
Not applicable. The subject legislation does not have an economic impact because it only
requires that the Executive branch advise the Council on the suitability of including
affordable housing in certain County projects.
4.
If
a
bill is likely to have no economic impact, why is that the case?
See
#3
above.
5.
The following contributed to and concurred with this analysis: David Platt and Mike
Coveyou, Finance.
Date
t#tt-;!z-
I
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Jsiah
Leggtltt
CI)Wl~V
En'{'lltivC'
Marc P.
Hansen
Caumy Attorney
M
~:
1\1 0 RAN)} U !\II
January
2,2013
TO:
Mnry Beck
Office of Management and Budget
VfA:
y
.,
Marc P.
HanSlm
l1f"
County
A110rney
:t't
lJ
/")
FROM: ClitTord L
Royalty
t)·~,L-.,
Chief: Division of Zoning, Land Usc,
&
Economic Development
RE:
Bill 37- 12,
HUlIsing -
Capital.
Improvt'1nents Program - Affordable Housing AssessmeJ1t
11.le County Executive's
office
has requested our comments on HJl1 37..
12.
As is
discussed more
fully
helow, we have a substantive legal
concem
abQut the
mil.
BaekgrouDf~
Bill 37-12 proposes to amend Chnptcr 25B ("Housing Policy") with a new
§
25B-7. The
new
St.'Ct1011
would,
infer alia,
require the
()ffic·e~
of Management and Budget to "transmit with
the CIP"
itO
"analysis"
of the amlrdablc hOllsing impucts of any
"applicable
capital
project."
An
"applicable capital
projCl:t" means "any
building
proj<.:ct
admini5tt'I'cd
by
th~
Department
of
General Services
or
the
Parking
Mrulag<"'lTItmt
Division of the
DeparlJ:nent of TranSPQrt.ltion."
The Bill would authorize the Council,
"by
resolution," to
"exempt from"
the new
section
"~t
category
(If
capital projects which
by
their nature do
not reql.'lire
an
affordable
housing analysis."
Discussion
Article
XI-A
of
the
Mttryl and Constitution
"tmthorizk'S
counties to adopt home rule
cil.rrtcrs
which .. - function as 'constitutions'
fhr
the counties adopting them:
lvfon/gamery
Cmm~y,
MaiTland v, Anchor fun
SeafoQd
Restauram,
374 Md.
327.331
(2003). As des<:ribed
hy
the Court of Appeals,
a
charter "is the organic, the
fUndamental
law, establishing
ba~ic
pdndpll!s
governing relationships between the govt..'ITlment and the people, and anmng the y;mous
governmental
branches
and
bvdies.'~ Ch(;~(:,ks
v.
Cedlair,
287Md,
595,507
(l980),
'The Charter
is the local equi valent of
ll.
constitution.
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Mary Beck
Page 2
Pursuant to Article XI-A, the County,
in
1968.
ad~)pted
a
charter
that divides the County
g01lenunent into
legislati
ve
and
executive
branches anddclineatcs the authority
~)f
each.
Sce
Charter olA101ttgolt!ery Caunt;.v,
,\tfaJ:vland,
§§
101
and
20/.
Section 101
vests
legislative
pQ\vcr
in the County Council and§ 201 vests executive power
ill
the County Executive. Legislative
enactments are
subject
to
§
208 of the
Ch'lrter
which states that any legislative enactment ofthe
Council must
be
·'dclivt.'1ed"
t()
the
County
Execlilive
uwho ...
shall approve or disapprove
it."
A legislative enactment makes law or prescribes policy. Sce
Scull
v.
Muntgomel:v
('iti:lens League,
249 Md. 27l, 282 (1968);
McQuillin, .Hunic{pai Corporations,
§ 10:6. A
resolution,
by
contrast, "denotes something less solemn or fbrmal , .. [and] generally
spe~lkil1g
I
is simply an expressiun. of opinion or
mind
conC<.'Tning
sOnlcparticular
item ofhusin(''Ss
eoming
within the legislative body's official cognizance .. , ."
Inlet tfssochu.\'i
11,
Assateaglle
Flouse
Condomlnium
Ass()ciatiorl.
313 Md. 413, 428
(t
988),
The Bill penni!s lhe
Omncit,
by
resolution, to
exempt
certain
undetine-d
projects
from
the Bill's rctluircments. Determining the
scope
of a law is a legislative act. Under the Charter, a
legislative a.ct must be effected through the enactment oflcgislation
under
§
208 of the
Chalier,
The Bill circumvents that process by allowing the Council to, in effect, amend the
hf'N
by
resolution.
The Bill thus
violates
§
208 of the Charter.
This teg<d Infin.nHy
may,
howev~1
be
remedied
by
amending
Ule
bill to authQrize the
Executive to adopt a Method
(t)
or (2) regulation
to
ex.empt from the scope of the bi.H
detined
classes
ofprojeets
(but
would have a
de mininiis
impact
on
affordable housing.
Please contact us
if
you would like:
t<)
discuss
our
opinion.
Cc:
Kathleen Boucher,
AsSistant
Chief
Administrative
Of1kt-'1'
Michael Faden, Sen.ior Legislutive Attorney
@
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TESTl.!'1ONY OF RICHARD
Y.
NELSON, JR.
DIRECTOR, DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS
MONTGOMERY COUNTY COUNCIL PUBLIC HEARING
BILL
37-12,
HOUSING­
CAPITAL IMPROVEMENTS PROGRAM - AFFORDABLE HOUSING ASSESSMENT
Good afternoon. My name is Rick Nelson. I am the Director of the Montgomery
County Department of Housing and Community Affairs (DHCA). I am testifying
on behalf of County Executive Isiah Leggett.
Affordable Housing has been a priority of the County Executive during his entire
tenure as County Executive. He is supportive of this bill and its intent to ensure an
analysis is performed regarding the appropriateness and feasibility of including
affordable housing with projects submitted to the Council.
The increasing unavailability of buildable land for housing makes it imperative that
we explore all avenues
foi
expanding the supply of affordable housing. This
process has begun. At the direction of the Executive, DHCA consults with other
departments about the co-location of housing with other governmental facilities.
For example, we are working with a developer for the development of affordable
housing adjacent to the new Silver Spring Library. Affordable housing
was
part of
the requirements for the redevelopment of parking lots
3, 16.
and
31.
We are
currently exploring the development of affordable housing at the site ofthe new
Fire Station (#23) to be located
in
White Flint. Similarly, plans are being
developed for affordable housing to be co-located with the proposed parking
facility at the Conference Center.
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PH Testimony Bill
37-12,
Housing -CIP-Affordable Housing Assessment
Page 2
While' supportive of the Bill and its intent, I should point out there are some costs,
both staff time and money, involved in the preparation of the required analyses.
In
addition, a major issue, I am concerned about is funding and timing of funding for
the fmancing gap and/or operating funding shortfalls due to reduced rental income
from the affordable units. The inability to forward fund such shortfalls might
make, what would otherwise be a feasible and appropriate project, financially
impractical at the time of the CIP construction.
We will work with your staff to provide some suggested changes to the Bill's
language aimed at improving clarity and conforming with the Charter.
In
conclusion, I repeat the support ofthe County Executive of this Bill and all steps
we can take to add affordable housing to the inventory of housing in the County.
We stand ready to work with Councilmembers during your subsequent
worksessions.
DHCA: 1110/2013
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AMENDMENT
To Bil137-12
BY COUNCILMEMBER FLOREEN
Sec.
1.
Section 25B-7 is amended as follows:
25B-7.
[Reserved] Affordable housing assessment.
For each applicable capital project in the Capital Improvements
Program during facility planning, the Office of Management and
Budget must include in or transmit with the CIP an [[analysis))
evaluation of:
W
ill
ill
the feasibility of including
housing in the project;
~
significant amount of affordable
the effect of the project on the supply of affordable housing in the
immediate area; [[and))
ill
what
capital or operating modifications, if any, would promote
and maximize affordable housing in the project and the
immediate area: and
(±l
what operating budget modifications. if any. would be needed to
build and maintain affordable housing in the project.
(Q)
The affordable housing [[analysis]) evaluation submitted
by
OMB
should discuss at least the following issues related to the capital project:
ill
ill
ill
ill
compatibility of affordable housing with the underlying project;
conformity of affordable housing to applicable zoning and land
use plans;
proximity to public transit, and availability of other transportation
options; and
proximity to other community services.
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(£)
As used in this section, applicable capital project means any pto,posed
building project administered
.by
the Department of General Services or
the Parking Management Division ofthe Department of Transportation.
@
In performing its analysis, OMB should consult the Department of
Housing and Community Affairs, the Planning Board, the Housing
Opportunities Commission, and any other County department or agency
with expertise in affordable housing.
[[W
The Council may
.by
resolution exempt from this Section
~
category of
capital projects which
.by
their nature do not require an affordable
housing analysis.]]
W
The Council may in the capital budget resolution. and the County
Executive may by Method 1 regulation. exempt from this Section a
category of capital projects which by their nature do not . require an
affordable housing analysis.
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