PHED Item 2
January 17,2013
Worksession
MEMORANDUM
TO:
FROM:
Planning, Housing and Economic Development Committee
~MiChael
Faden, Senior Legislative Attorney
Worksession:
Bill 37-12, Housing
Housing Assessment
SUBJECT:
Capital Improvements Program
Affordable
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).
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 projects 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.
Technical amendment
The County Attorney (see memo, ©1 0-11) 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
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. While Council staff doesn't
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completely accept the County Attorney's legal analysis, we
recommend
that this issue be easily
resolved by adopting 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.
.w.
This could be done by amending ©2, line 27:
The [[Council]] CouIltx.Executive
!!ll!Y
by
[[resolution]] Method
1
regulation
exempt from this Section
f!
category of capital projects which
by
their nature do
not require !!ll affordable housing analysis.
This packet contains:
Bill
37-12
Legislative Request Report
Fiscal and economic impact statement
County Attorney memo
Executive hearing testimony
F:\LA 'N\BlLLS\1237 Housing-eIP-Affordable HOllsing\PHED MemoDoc
Circle
#
1
4
5
10
12
2
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Bill No. ______
--=--'-'''--_ _ _..______
Concerning: Capital
Improvements
Program -
Affordable Housing
Assessment
Revised:
---'--'--'-.::::....:.=--_ _ _
Draft No.
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)
(3)
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.
By amending
Montgomery County Code
Chapter 25B, Housing Policy
Section 25B-7
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
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.37 -12
Sec. 1. Section 25B-7 is amended as follows:
2
3
25B-7.
[Reserved] Affordable housing assessment.
W
For 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:
4
5
6
ill
ill
ill
the feasibility of including
9:
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.
7
8
9
10
11
12
13
(hl
The affordable housing analysis submitted
~
OMB should discuss at
14
15
least the following issues related to the capital project:
16
17
18
19
20
21
ill
ill
ill
ill
W
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.
As used in this section, applicable capital project means any building
project administered
~
22
23
24
the Department of General Services or the
Parking Management Division of the Department of Transportation.
@
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
-0-
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BILL
NO.37 -12
27
28
29
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:
30
31
Nancy Navarro, President, County Council
Date
32
Approved:
33
Isiah Leggett, County Executive
Date
34
This is a correct copy ofCouncil action.
35
Linda M. Lauer, Clerk of the Council
Date
(})-
F:\LAw\BILLS\1237 Housing-CIP-Affordable HousinglBill4.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:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIP ALITIES:
PENALTIES:
Not applicable
F:\LAW\BILLS\1237 Housing-ClP-Aftordable Housing\LEGISLA TIVE REQUEST REPORT Doc
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Fiscal Impact Statement
Council Bill 37-12 Housing - Capital Improvements Program - Affordable Housing
Assessment
1.
Legislative Summary.
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 DGS
or the Parking Management Division of DOT. The pUIpose of the analysis is to advise
the Council whether each proposed project should include an affordable housing
component.
T~s
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 of the financial feasibility for inclusion as a
component of the project. Expenditures would relate to the staff time required by each
department involved in the analysis including the Department of General Services,
Department of Housing and Community Affairs, Department of Transportation and the
Office of Management 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
~
Department Activity
Assumptions
I
Estimated Cost
I. Costs related to analyze the feasibility of including affordable housing in the 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.
• 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 DRCA to determine likely gap
financing needs.
..
The $50,000 estimate in the
Facility Planning project includes
both DGS staff and consultant
costs.
J...
i
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Facility Planning 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 of affordable
housing
Initial Review Phase:
• Obtain and review information from
DGSIDOT regarding the proposed project to
assess the feasibility and desirability of
affordable housing on the project site.
• Neighborhood and site visit for overall
feasibility .
• 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 determine estimated gap funding
needed to make the project fmancing work.
• Internal DHCA discussions and drafting
recommendations.
$1,040 per project ($43.30 per
hour @ 24 hrs 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 financing will be done
through the routine review
process thus not needing
additional expenditures
associated with the assessment
r-
OME staff review the
assessment conducted
by DGS and DI-ICA
This requires:
• Development of a review process.
• Coordination of patticipating 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.
I
FT Management and Budget
Specialist ($126,930 I FTE;
includes estimate for retirement,
FICAlMedicare, life insurance,
and health insurance); 1,768
hours per year, $126,930 @85%
=
$107,89l.
DOT, Parking
Management Division
DOT has generally developed affordable
housing units in conjunction with private
partners which helps control County project
costs. If the Department of Transportation
builds its own affordable housing, the non-
parking component will need 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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effort garage maintenance
projects are exempt from this
analysis, there are no planned
additional expenditures.
Sources: Department afGeneral Services, Department ofHousing and Community Affairs, Department ofTransportation 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 project, 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 firm estimate of the COl.mty gap financing cost
will be determined 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
s.
Later actions that may affect future revenue and expenditures if the bill authorizes
future spending.
This Bill does not authorize futme 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 FTE
• OMB staff time: 1,768 hours; 85% of 1 FTE (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 stafftime estimated in #6 above needs to be multiplied by the number of
projects annually submitted for funding to determine the full extent of staff time required.
If additional staffing is not provided for this function, other work
will
need to
repri oritized.
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 and/or 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%
of area median income, 50% AMI and/or 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, DOS
Al Roshdieh, Parking Management Division, DOT
Rick Siebert, Parking Management Division, DOT
Jennifer Bryant, Office of Management Budget
Date
I
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Economic bnpact Statement
Council Bill 37-12, Housing - Capital Improvements Program - Affordable I-lousing
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.
(j)
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OFfICE
Jsiah
('mm(v
THE COUNTY ATTORNEY
j\'iarc
p,
Attonwy
MI':lVIORANUtJIVl
2,2013
TO:
Mary Beck
Office of Management and Budget
Marc
p,
HatlStm
County Attorney
V
FROM: Clifford
Royalty
Chief: Division
&
EI.:(momic Development
Bill 37-12, Housing - Capital [mprovcrnents Program
Affordable
Housing
Assessment
The County Exccu6ve's off1ce
requested our cmnmcnts on
12, As is
discussed more
fhHybe1O\v,
we have a substantive legal
C(H1cern
about
the
Hill.
13m
Background
12 proposes to amend Chapter 2SB (,'Hm!sing Policy") \\lith
it
1it,'W
§
7.
net',' st:.'Ctlon 'would,
infer alia,
require the
Oft1cr;;~
ofM.magement
and Budget
to "transmit with
car'
an "ana!Y))lS" of tht, aUordub1e
hOllsing
impztcts
of any
"applic2lble capital project."
An
"applicable capital project" means
"any
building project administered
by
the
Department
of
General Services or the Parking .Mmlagement
DiVision
the Departrncnt Transportatiml."
The
\vould authonze the Council,
resolution," to "exempt
the new
"g
category of capital projccts\vhich
by
their nature do not require an aH{)rdable housing
rumlysis.~'
BHl
13m
Discussion
Article
XI~A
of the l'vhlfyland Constitution "authorizi.'S counties to adopt home rule
charters which.. function as 'constitutions' fbI'
the
counties
adopting
them.
Aton/gomerr
Cmm~v.
/14w}'land
P,
Anchor ilm
S'eafood
Restaurant,
3741'v1d.
I (2003). As
describt.~d
the Court of
A
ppt",ils, a charter "'is the organic, the fundarnentallaw, establishing hasic principles
governing relationships between the government <Iud tbe people, and armmg tht:
variou~
govcmmental branches and bodies."
Cheeks v. Cedlair,
Md.
607 (1980).
'nH~
Charter
is the local
oquivalen!
of a
constitution.
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Mary Beck
Page 2
Pursuant
to ArtklQ XI-A, the County,
in.
1968, adopted a charter
that
divides the County
gOVemmenl into
legislative
and executive
branches and delineates the authority
(}f
each .
';ee
Charter
(~rA1()1l[gO!tWry
COWl(V,
/vla1:viand,
§§
101
ancl20}.
Section 101
legislative power
in the
(~ounty
Council and§ 201 vests
executive
power In the County Executive.
Legislative
enactments are subject
t()
§
208 of the
Charter
which states
Umt
auy iegislative enactment. ofthe
Council mu,:;t be "delivered" to the County Executive
"vlho.
shall approve or
disappmvcit"
~
>.}/.
-I'
>
A 1cgis1ative enactment makes
law
or prescribes policy_
See
Sell}l
v.
J\:furugotnmy
Leagrw,
249 Md.
, 282
(f
9(8);
McQuillin, Municipal
Corporations,
§l 0:6. A
resolution,
by
contrast, "denotes
something
less
solemn
or
fhrmal ... [and]
gcnenllly
"ll',~'''.U
is simply an
expression of opinion or
mind
concerning
SOUlt'
particular item of business coming
within the legislative body's official cognizance. , .."
inlet .-J·ssociates v. A.ssate:ague House
Cmdomil1ium Association,
313 Mel. 413, 428
(1988),
The Bill pennits Lhe Council, by resolution, to ext.'rnpt
undelined projects
fhHn
the Bill's requirements. Determining the scope
of
Ii
law is a
legislative
act. Under the Charter, a
legislative
act
must be effected through the enactment of legislation under
§
208 of the Charter,
The Bill circumvents that
proce..'1S
by
ftlJowjng (he
Council
to, in
etlect,
amend the law
by
resolution. The Bill thus violates
§
2GB, of the· Charter.
This kgal1nflnnity may, however, be remedied
by
amending
Ole
hill to authorize
Executive toa<iopt a Method (I) or (2) regulation to exempt
hum
the scope of the
bin
dt'1111Cd
classes of
projects that
would
have
a
minimis
impact on
aflimiablc
hOllsing"
Please contact us
if
you would like to discuss our opinion,
Cc:
Kathleen Boucher, Assistant
Chief
Administrative Ofllc·er
Michael Faden,
Senior
Legislative Attorney
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TESTliWONY 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 tothe Council.
The increasing unavailability of buildable land for housing makes it imperative that
we explore all avenues for 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 of the 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 financing 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 of the 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:
1/1012013
@)
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PHED Item 2
January 17, 2013
Worksession
Supplementary packet
MEMORANDUM
TO:
Planning, Housing and Economic Development Committee
FROM:
fMiChael Faden, Senior Legislative Attorney
Worksession:
Bill 37-12, Housing
Housing Assessment
SUBJECT:
Capital Improvements Program Affordable
DHCA Director Nelson requested the attached amendments to this Bill.
Council staff concurs with the amendment on line 6, but is not sure what effect is
intended by the amendments on lines 3 and 10. The amendment deleting lines 27-29 differs
from the amendment to that provision that the County Attorney suggested, which is described in
the main packet, and Council staff continues to recommend the County Attorney's amendment.
We expect Mr. Nelson to attend this worksession and explain the purposes of these
amendments.
F:\LAW\BILLS\1237 Housing-eIP-Affordable Housing\PHED Supp Memo.Doc
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BILL NO.37 -12
1
Sec.
1.
Sec.tion
25B-7
is amended as follows:
25B-7.
~
(lew
ec:JY\5~~t.lc..-t
{vY'\
(\t:;:...J
-
Ren
c
a<t-
~
v-4TJ
eN"\.
2
3
~
[Reserved] Affordable housin2 assessment.
For each
applicable~roj
ect
in the Capital Improvements
4
5
6
Program, the Office of Management and Budget must include in or
transmit with the CIP an analysis of:
G1Y\~
.a
Pf>~op""'\4l\te(\-e..5:S
ill
ill
ill
the
feasibility~
including g sIgnificant amount of affordable
housing in the project;
the effect of the project on the supply of affordable housing in the.
7
8
9
10
11
' I - ,
'c,",.Ad~~'
'f
. Old
what capIta or operating,rf1o .ItlCatlOns,
L
any, wou promote
and maximize affordable housing
immediate area.
In
immediate area; and
the project and the
12
13
lhl
The affordable housing analysis submitted
J2y
ONIB should discuss at
least the following issues related to the capital project:
14
15
16
ill
ill
°
compatibility ofaffordable housing with the lUlderlying project;
conformity of affordable housing to applicable zoning and land
use plans;
17
18
19
ill
proximity to public transit and availability of other transportation
options; and
(1)
proximity to other community services.
20
21
l£}
As used
in
this section, applicable capital project means any building
project administered
J2y
the Department of General Services or the
Parking Management Division of the Department of Transportation.
22
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:ILAWlBlllS\1237 Housing-CIP-Affordable HousinglBiII4.0oc
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BILL NO.37 -12
27
ill
~
Council
m£t
!!l:
resoiutiSB
eJfen1f!'!
~1:h.lli
Section
3!
c~
pu:!icstB ,.."hich
by
their
lllil'tlJ.t:€
28
29
30
~tai
GO
net
ft!9uire~
B:eU5i;ng
£fflGlysis:;
Approved:
31
Roger Berliner, President, County Council
32
Date
Approved­
33
Isiah Leggett, County Executive
34
Date
This
is
a correct copy o/Council action.
35
LindaM. Lauer, Oerkofthe Council
Date
(}J-
F:I!..AWlBII.I.S\1237
Housing-c!p~A1fordable
Housing\6t114.Dilc