GO Item 3
June 25, 2015
June 23, 2015
Government Operations and Fiscal Policy Committee
Bill 8-15, Taxation - Development Impact Tax - Exemptions
Bill 8-15, Taxation - Development Impact Tax - Exemptions, Lead sponsor Council Vice
President Floreen; Co-sponsors - Councilmembers Riemer, Rice, Katz and Navarro, was
introduced on February 3. Bill 8-15 would exempt the market-rate rental dwelling units in any
development which consists of at least 25% affordable housing units from the transportation and
school development impact taxes.
This Bill is similar to Bill 39-11 as recommended by the Government Operations and Fiscal
Policy Committee. On May 7,2013, the Council considered Bill 39-11 with the recommended
revisions and laid the bill on the table. Bill 39-11 expired without further action on December 1,
On March 3, 2015 the Council held a public hearing on Bill 8-15. The Montgomery
Housing Partnership spoke in favor ofthe Bill (©19-20). In their view, the impact tax burden is a
burden on all new housing but has the most negative effect on those projects that provide affordable
housing. The Partnership encouraged the Council to expand Bill 8-15 to for-sale projects in
addition to rental projects. The Council held another public hearing on May 5,2015 in order to
comply with noticing requirements. No one spoke at the Council's May 5 public hearing.
The Executive submitted a fiscal impact statement assuming that every rental project
beyond approved deVelopment would all make themselves eligible for the exemption under Bill
8-15 by providing 25% affordable units. Based on this absolute worst case situation, the Executive
estimated the potential for $48.6 million in lost revenue and a gain of 634 affordable units.
Affordable units include MPDUs, and other units ifthe rent affordable to households earning less than 60% ofthe
area median income, adjusted for family size for a minimum 15 year tenn;
Worst case from the perspective ofreduced impact fee revenue.