Agenda Item 3B
September 20, 2016
Introduction
MEMORANDUM
September 16, 2016
TO:
FROM:
SUBJECT:
County Council
Amanda Mihill, Legislative
Attome~
Introduction:
Bill 39-16, Housing and Building Maintenance Standards ­
Registration of Vacant Property
Bill 39-16, Housing and Building Maintenance Standards - Registration of Vacant Property,
sponsored by Lead Sponsor Councilmember Hucker and Co-Sponsors Councilmembers Leventhal
and Navarro and Vice President Berliner, is scheduled to be introduced on September 20, 2016. A
public hearing is tentatively scheduled for October 18 at 1:30 p.m.
Bill 39-16 would:
require owners of certain unmaintained vacant buildings to register those vacant
buildings with the Director of the Department of Housing and Community
Affairs;
require owners of certain unmaintained vacant buildings to pay certain fees;
require inspections for certain unmaintained vacant buildings; and
generally amend County law on housing and building maintenance standards.
Additional background materials from Lead Sponsor Hucker is attached on ©8.
This packet contains:
Bill 39-16
Legislative Request Report
Sponsor materials
Circle
#
1
7
8
F:\LAw\BILLS\1639 Registration Of Vacant Property\Intro Memo.Docx
 PDF to HTML - Convert PDF files to HTML files
Bill No. _ _ _ _
~3~9~-1.!..!:6~
_ _ __
Concerning: Housing
and
Building
Maintenance
Standards
Registration of Vacant Property
Revised: 7/14/2016
Draft No. _9_
Introduced:
September 20,2016
Expires:
March 20,2018
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ _ __
Effective: _---:--:--_ _ _ _ _ __
Sunset Date: .......o..:.No=n:-.::e=---_ _ _ _ __
Ch. _ _• Laws of Mont. Co. -'--_ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Councilmember Hucker
Co-Sponsors: Councilmembers Leventhal and Navarro and Vice President Berliner
AN
ACT to:
(1)
(2)
(3)
(4)
require owners of certain unmaintained vacant buildings to register those vacant
buildings with the Director of the Department of Housing and Community Affairs;
require owners of certain unmaintained vacant buildings to pay certain fees;
require inspections for certain unmaintained vacant buildings; and
generally amend County law on housing and building maintenance standards.
By adding
Montgomery County Code
Chapter 26, Housing and Building Maintenance Standards
Article I, General
Article II, Registration ofVacant Property
Sections 26-19, 26-20, 26-21, 26-22, 26-23, and 26-24
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 unqffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
 PDF to HTML - Convert PDF files to HTML files
BILL
No. 39-16
1
Sec.
I.
Chapter 26 is amended
by
adding Articles I and II (Sections 26-19,
26-20, 26-21, 26-22, 26-23, and 26-24) as follows:
Article I. General.
2
3
4
5
*
26-19. Definitions.
*
*
Article II. Registration of Vacant Property.
6
7
8
In this Article, the following tenns have the meanings indicated:
Department
means the Department of Housing and Community Affairs.
Director
means the Director of the Department or the Director's designee.
Dwelling unit
has the same meaning as in Section 26-2.
Fit fOr occupancy
means ready for immediate occupancy
Qy
~
tenant without
9
10
11
12
more than minor cosmetic changes.
Occupied
means the use of one's residence in improved real property on
~
13
14
regular basis.
Public nuisance
has the same meaning as in Section 26-2.
Vacant building
means residential real property improved
Qy
~
building which
15
16
17
18
19
20
21
is not occupied. A building is only
~
vacant building
if the Director detennines
that there is no resident for which an intent to return and occupy the building
can be shown. To detennine whether there is
consider:
~
resident, the Director must
22
23
24
25
ill
ill
ill
ill
ill
(Q)
past due utility notices and/or disconnected utilities;
accumulated mail;
no window covering;
no furniture observable;
open accessibility;
deferred maintenance; and
the dwelling is boarded up.
26
27
ill
o
f:\law\bills\1639 registration of vacant property\bill9.doc
 PDF to HTML - Convert PDF files to HTML files
BILL
No. 39-16
28
Unmaintained vacant building
means
~
vacant building not maintained as
29
30
required
Qy
Chapter 26, Article
1.
Visual blight
has the same meaning as in Section 26-2.
26-20. Applicability.
31
32
33
34
35
This Article does not
rum!Y
to any real property that is
ill
owned by:
36
37
ill
ill
ill
®
under
the government ofthe United States or its instrumentalities;
the State of Maryland or its instrumentalities; or
~
foreign government or its instrumentalities;
active
construction
or
undergoing
active
rehabilitation,
38
39
renovation, or repair, and there is
~
building permit to make the building
fit for occupancy that was issued, renewed, or extended within 12
months of the registration date;
40
41
42
43
44
45
ill
for
~
period not to exceed 24 months, the subject of
~
probate
proceeding or the title is the subject of litigation, including
~
foreclosure
proceeding; or
@
maintained as required
Qy
Chapter 26, Article
.L
26-21. Re2istration of unmaintained vacant buildings; inspection; notification.
46
47
48
49
50
ill
Building maintenance required.
The owner of
~
vacant building must
maintain the building as required by Chapter 26, Article
1.
®
ill
Unmaintai11:ed vacant buildings registry.
The Department must maintain
~
list ofunmaintained vacant buildings.
Registration required.
51
52
53
ill
Within 90 days after
~
building becomes an unmaintained vacant
building, the owner must register the building and
~
the
registration fee required in Section 26-23.
An
owner must renew
f:\law\bills\1639 registration of vacant property\bill9.doc
 PDF to HTML - Convert PDF files to HTML files
BILL
No. 39-16
54
55
56
57
~
registration annually from the date of initial registration unless
there is
~
change in ownership.
ill
The Director must identify nonregistered unmaintained vacant
buildings. The Director must notify the owner that the owner's
building has been designated as an unmaintained vacant building
and ofthe owner's right to appeal this designation.
58
59
60
61
62
@
Inspections required.
ill
Inspections
required.
The
Director
must
inspect
every
unmaintained vacant building at least annually to ensure that:
(A)
63
64
65
66
67
the building complies with all applicable laws, including
Chapter 26, Article
t
and
lID
vacancy ofthe building is not;
ill
(ii)
detrimental to the public health, safety, and welfare;
~
hazard to police officers or firefighters entering the
68
69
70
71
72
building in an emergency; or
(iii)
~
public nuisance.
~
ill
Additional inspections authorized.
The Director may inspect
vacant building more often than annually to ensure compliance
with this
- - - ­
Article.
73
ill
County notification.
The Director of the Department of Finance must
notify all property owners of the requirements of this Article at the same
time as the Director notifies property owners of any real property taxes
due.
74
75
76
77
26-22. Exemptions.
78
79
.cru
The Director may grant an exemption from the registration requirement
in Section 26-21 for any real property that is:
@
f:\law\bills\1639 registration of vacant propertylbill 9.doc
 PDF to HTML - Convert PDF files to HTML files
BILL
No.
39-16
80
81
ill
in compliance with 26-21(a) and the property owner has been
actively seeking in good faith to rent of sell the property if:
(A)
the time period for sale or rent does not exceed
1
year from
the initial listing, offer, or advertisement of sale or rent of
~
residential building; and
82
83
84
85
86
87
88
89
(ill
the building has
~
valid certificate of occupancy;
ill
for
~
period not to exceed 12 months, the subject of
~
pending
application for
~
necessary approval for development before the
Planning Board, Board of Appeals, or Office of Zoning and
Administrative Hearings; or
90
91
92
ill
(hl
for
~
period not to exceed 24 months, the subject of an
inheritance.
The cumulative time period that
~
vacant building may be exempted
from this Article must not exceed
J.
years.
93
94
95
96
97
98
99
100
W
@
An application for an exemption from the registration requirement must
be made on
~
form the Director prescribes.
A person that believes the Director has incorrectly denied the person's
application for an exemption may appeal that decision according to
Section 26-24.
26-23 Fees.
ill
The County Executive must set one or more fees
by
regulation under
Method
101
102
103
104
m
The fee must increase for larger numbers of inspections
performed that the Director determines are necessary to ensure
compliance with this Section.
(hl
A vacant building owned
by
the County or its instrumentalities must
comply with the registration requirement of Section 26-21, but is not
subject to any fees required in paragraph
hl
105
106
(j)
f:\law\bills\1639 registration of vacant property\bill 9.doc
 PDF to HTML - Convert PDF files to HTML files
BILL
No. 39-16
107
108
109
110
111
112
113
114
115
116
117
118
26-24. Right to appeal.
.ill)
Within 10 days after the designation of an owner's building as
~
vacant
building, the owner may petition the Director for reconsideration
by
filing the form prescribed
by
the Director. Within 30 days after
receiving the petition, the Director must issue
determination.
~
notice of
fmal
ru
Any person aggrieved
by
an action of the Director under this Article
may, within 10 days after receiving written notice of the action, appeal
that action to the Circuit Court under the Maryland Rules of Procedure
for judicial review of
~
final administrative agency decision. An appeal
does not stay the Director's action.
Approved:
119
Nancy Floreen, President, County Council
Date
120
Approved:
121
Isiah Leggett, County Executive
Date
122
This is a correct copy ofCouncil action.
123
Linda M. Lauer, Clerk of the Council
Date
f:\lawlbills\1639 registration of vacant property\bill9.doc
 PDF to HTML - Convert PDF files to HTML files
LEGISLATIVE REQUEST REPORT
Bill 39-16
Housing and Building Maintenance Standards
-
Registration o/Vacant Property
DESCRIPTION:
Bill 39-16 would require owners of certain unmaintained vacant
buildings to register those vacant buildings with the Director of the
Department of Housing and Community Affairs; require owners of
certain unmaintained vacant buildings to pay certain fees; and require
inspections for certain unmaintained vacant buildings.
The County has inadequate tools to address vacant homes.
To give the County new tools to address the growing number of
vacant properties in the County.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVAL UATION
:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIP ALITIES:
PENALTIES:
To be requested.
To be requested.
To be requested.
To be researched.
Amanda Mihill, Legislative Attorney, 240-777-7815
To be researched.
A violation of Chapter 26 is a Class A violation.
F:\LAw\BILLS\1639 Registration Of Vacant Property\LRR.Docx
 PDF to HTML - Convert PDF files to HTML files
MONTGOMERY COUNTY COUNCIL
ROCKVILLE, MARYLAND
TOM HUCKER
COUNCILMEMBER
DISTRICT 5
MEMORANDUM
TO:
FROM:
DATE:
RE:
Councilmembers
Tom Hucker
July 13,2016
Establishing a vacant property registry
The second part of my housing package is a bill to establish a vacant property registry,
which is intended to give the County government new tools to address the growing number of
vacant properties in Montgomery County. A review ofDHCA's code enforcement data shows
that there are more than 350 known vacant properties in the county.
There are also hundreds more unidentified vacant properties because this problem is
underreported and not all vacant properties have apparent housing code violations listed. Many
of these vacant properties are inherited, owned by out-of-state residents, or by developers who
simply have no short-term incentive to care for the property or put it back on the market.
Vacant properties can not only be an eyesore, they also pose serious threats to the
community. Research shows they attract squatting, arson and other criminal activity. Vacant
properties place a burden on our public safety and housing resources because they are twice as
likely to generate a call for fire or police service than a non-vacant property[2], and they have
been found to reduce the community's property values by as much as 9%
[3][41.
The County has inadequate tools to address vacant homes, which is why many of ours
remain empty for so long. Several in my neighborhood in Silver Spring have been the subject of
constituent complaints for nearly ten years. I've discussed them with previous DHCA directors,
the Maryland Department of Housing and Community Development and the Attorney General,
each of whom have claimed that they need stronger authority to incentivize owners to rent, sell
or occupy their homes.
As a result, many of the vacant properties we researched have generated dozens of
County inspections, citations and minor DHCA actions through the Clean and Lien program. A
Clean and Lien occurs when a negligent property owner fails to maintain their vacant property
after being cited numerous times.
In
response, DHCA will cut the grass, secure the doors or
windows, remove any trash or debris, and put a lien on the property for the cost of these services.
STELLA B. WERNER COUNCIL OFFICE BUILDING • 100 MARYLAND AVENUE, 6'" FLOOR • ROCKVILLE, MARYLAND 20850
240-777-7960
OR
240-777-7900 • MD RELAY - DIAL 711 • FAX 240/777-7989
COUNCILMEMBER.HUCKER@MONTGOMERYCOUNTYMD.GOV • WWW.MONTGOMERYCOUNTYMD.GOV
@
 PDF to HTML - Convert PDF files to HTML files
Unfortunately, this program does not provide enough of an incentive for a negligent property
owner to rent, sell, or occupy the property because the cost of these services is so low.
My proposed bill addresses these issues by requiring DHCA to establish and maintain a
registry of unmaintained vacant properties. Once the property is registered, DHCA must perform
an initial inspection for housing code violations. Any subsequent inspections performed by
DHCA will be charged to the homeowner using a graduated fee schedule similar to the False
Alarm Respoose Fee ScheduleYl
The creation of the registry will allow the County to collect data on the number of vacant
houses for the first time. The more robust inspection regimen will make the County agencies
aware of more violations and will encourage owners to address violations before they become
worse, and the increasing fees will give absentee owners more financial incentive to rent, sell, or
occupy long-vacant properties.
This is a best-practice approach that is based on successful laws in Chicago, Los Angeles,
Wilmington, and other large municipalities. The District of Columbia also has a very successful
approach to vacant properties; the City assesses a special tax of$5.00 per $100 of assessed value
for vacant properties and $10.00 per $100 of assessed value for blighted vacant properties.
Unfortunately, this option is unavailable to us under Maryland Constitution, but it illustrates the
seriousness with which our immediate neighbors address this problem
in
the District.
Attached is a copy of the bill, an FAQ sheet, and some slides to explain more about the
issue. Thank you in advance for your support of this bill. Please let me know if we can provide
any additional information, and please contact my office if you would like to cosponsor.
[%ttp:1iwww.usatoday.com!storyimoneyipersonalfinancei20
15i02/141
credit-dotcom-foreclosures!23 28 708S!
l%ttp:!/www.communityprogress.net/filebiniCommunity]rogress_Wilmington]INAL_REPORT_122214.pdf
3
[
Jhttp://www.pittsburghquarterly.com!index.php/Regionithe-cost-of-blightiAlI-Pages.html..-Y
14Jhttp://'w,-\'W.communityprogress.netitilebin!Community_Progress _Wilm ington]INAL_REPORl'-122214.pdf
[5J http://www.montgomerycolmtymd.gov/POLIChiefibureaus/managementlmgmtbudgetlfalsealann!fee2.html
tql
 PDF to HTML - Convert PDF files to HTML files
Unmaintained Vacant Property
Frequently Asked Questions
1.
What is the intent of this legislation?
The intent of this legislation is to keep umaintained vacant properties from becoming a
nuisance to the community by requiring that the property owner maintain the property
and move towards occupancy.
2. What is an unmaintained vacant property?
Unmaintained vacant properties are residential real properties that have not been
continuously occupied and the owner has shown no intent to return. To determine
whether a property is vacant, the Department of Housing and Community Affairs
(DHCA) must consider utility usage, physical signs of occupancy, and blight or general
neglect.
3. Why create a registry?
Unmaintained vacant properties have been shown to reduce the property values of
surrounding properties by 6-9%, and they are nearly twice as likely to generate a call for
fITe service. Given these statistics, the county has a clear and compelling interest in
making sure that unmaintained vacant properties are being maintained and not a risk to
other homes in the community.
4. Are there any exemptions?
Yes, properties with permits for active renovation, being sold or rented, going through
probate proceedings, or being redeveloped are exempt from registering for up to 3 years.
5. Will residents that leave for the winter have to register?
No, residents that leave for the winter will not have to register because they have a clear
intent to return.
6. Are there any fees and fines associated with registering?
Yes, the fee for registering the property and the fine for failing to do so will be set by
executive regulation.
 PDF to HTML - Convert PDF files to HTML files
7.
What happens after a property is registered?
DHCA will inspect the property for any code violations. The property owner will then
have 30-60 days to address the code violations. Any subsequent inspections performed
by DHCA will be charged to the homeowner using a graduated fee schedule similar to
the False Alarm Response Fee Schedule.
8. What is the False Alarm Response Fee and how does it work?
The Montgomery County Police Department is requested to respond to over 45,000 false
alarms each year. Responding to false alarm calls reduces the police department's
effectiveness and undermines its ability to respond to more critical calls. A false alarm is
defined as any alarm signal that elicits a response by police personnel and for which there
is no evidence of criminal activity to justify a police response.
Below is the False Alarm Response Fee Schedule.
Occurrence
lst
2nd
3rd
4th
5th
6th
7th
8th
9th
10th
11th
12th
Residential Fee
$0.00
$25.00
$50.00
$75.00
$100.00
$150.00
$200.00
$250.00
$300.00
$400.00
$500.00
$600.00
Commercial Fee
$0.00
$25.00
$50.00
$75.00
$100.00
$150.00
$200.00
$250.00
$300.00
$400.00
$500.00
$600.00
 PDF to HTML - Convert PDF files to HTML files
13th
14th
15th
16th
17th
18th
19th
20th
$700.00
$800.00
$1,000.00
$1,500.00
$2,000.00
$2,500.00
$3,000.00
$4,000.00
$700.00
$800.00
$1,000.00
N/A
N/A
N/A
N/A
N/A
9. Who owns unmaintained vacant properties and why are they vacant?
Research shows that most of these properties are owned by banks or real estate investors
that acquired the property through a foreclosure sale. These properties are often vacant
because the owners expect to increase profits once the property has appreciated in value.
10. Is the state doing anything to address this issue?
In 2012, the General Assembly created the Foreclosed Property Registry, which requires
a foreclosure purchaser to register with the state and transfer the title in a timely manner.
This law was needed because it typically took property owners nine to eighteen months to
transfer the title, which made it difficult for counties to identify the owner responsible for
property maintenance and tax payments.
11. How will this affect property taxes?
Long-term vacant properties tend to have lower property values than similar non-vacant
properties. Therefore, many of these properties are assessed lower property taxes than
they would be if the property was being occupied and maintained. This legislation
encourages occupancy and maintenance, which would result in the property taxes that are
on par with other similar non-vacant properties.
@
 PDF to HTML - Convert PDF files to HTML files
12. Why impose fees instead of fines?
Currently, DHCA can impose fines of up to $500 for code violations that are not
addressed within 60-90 days. However, these fines are often contested in court where
judges typically extend the deadline for repairs and reduce or eliminate the fines
altogether. Fees address these issues because they are charged directly to the property
owner for the services provided without the need for judicial intervention. Fees also
speed up the process because they escalate with each additional inspection.
13. Will the county lose money if the property is purchased through a tax sale?
No, unlike other jurisdictions where the property and land values can be lower than the
cost of demolishing or repairing the property, Montgomery County has a healthy real
estate market where the land value can exceed the value of the property itself.
14. How will this affect custom home builders?
As long as the builder can show good faith efforts to sell the property or renovate, then
the property will be exempted from the registry.
15. What impact do vacant property registries have?
The vacant property registry in Wilmington, DE, one of the most successful and most
awarded in the country, had a 40% decrease in vacant properties two years after it was
instituted.