Agenda Item 15A
December 5, 2017
Public Hearing
MEMORAND UM
December
1,
2017
TO:
County Council
_$
~
..
FROM:
Josh Hamlin, Legislative AttomeT'J
SUBJECT:
Public Hearing:
Bill 34-17, Housing - Moderately Priced Dwelling Units
(MPDUs)-Amendm ents
Bill 34-17, Housing - Moderately Priced Dwelling Units (MPDU s) - Amendments,
sponsored by Lead Sponsor Councilmember Floreen and Co-Sponsor Councilmember Rice, was
introduced on October 31. A Planning, Housing and Economic Development Committee
worksession will be scheduled at a later date.
Bill 34-17 would:
clarify certain provisions of law related to moderately priced dwelling units
(MPDUs);
amend certain provisions oflaw related to the satisfaction of MPDU requirements;
and
amend certain provisions of law related to the sale and rental ofMPDUs
Background
The Council enacted the County's Moderately Priced Dwelling Unit (MPDU) law in 1973
with several objectives. The law was aimed at furthering the objective of providing a full range of
housing choices for all incomes, ages and household sizes. In particular, the law imposed
requirements on the construction of affordable housing to meet the existing and anticipated needs
for low and moderate-income housing, and ensure that moderately priced housing was dispersed
throughout the County. It provided incentives to encourage the construction of moderately priced
housing by allowing optional increases in density including the MPDU density bonus to offset the
cost of construction.
The most recent substantial amendments to the MPDU law were made in 2004.
1
The 2004
amendments extended the control period for for-sale MPDUs from 10 to 30 years, and for rental
MPDUs from 20 years to 99 years. The amendments also allowed different income eligibility
1
http://www.montgomervcountymd.gov/COUNCIL/Resourcesifiles;bill
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2003/24-04-25-04-27-03.pdf
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standards in recognition of the higher cost of construction of certain types of housing, and
increased the number of developments required to provide MPDUs by lowering the base
requirement from any development with 35 or more units to 20 or more units. Additional
requirements and structure on the approval alternative payments made to the Housing Initiative
Fund in lieu of constructing MPDUs were also added. In 2007, the Office of Legislative Oversight
issued Report No. 2007-9, A Study of Moderately Priced Dwelling Unit Program Implementation.
2
Key components of Bill 34-17 include: clarification of existing provisions of the law;
requiring developments of less than 20 homes to make a paymen t to the Housing Initiative Fund;
broadening the authority of the Director of the Department of Housing and Community Affairs to
accept paymen ts into the Housing Initiative Fund in lieu of including MPDUs in a development,
when it serves the goal of increasing the availability of affordable housing; and increasing the
flexibility of the Director in determining MPDU obligations to better serve the demands for
affordable units. A table showing the specific changes to existing law included in the
Bill
is at
©49-50.
This packet contains:
Bill 34-17
Legislative Request Report
Table of proposed changes to existing law
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Bill No.
34-17
Concerning: Housing
Moderately
Priced Dwelling Units (MPDUs} -
Amendments
Revised:
10/31/2017
Draft No. 6
Introduced:
October
31. 2017
Expires:
May
1. 2019
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: ----=-=N=on=e=-- ------
Ch. _ _ , Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Councilmember Floreen
Co-Sponsor: Councilmember Rice
AN ACT
to:
(1) clarify certain provisions of law related to moderately priced dwelling units
(MPDUs);
(2) amend certain provisions oflaw related to the satisfaction ofMPDU requirements;
(3) amend certain provisions of law related to the sale and rental of MPDUs; and
(4) generally amend the laws governing moderately priced housing
By amending
Montgomery County Code
Chapter 25A, Housing - Moderately Priced
Sections 25A-l, 25A-2, 25A-3, 25A-4, 25A-5, 25A-5A, 25A-5B, 25A-6, 25A-7, 25A-8,
25A-9,
and
25A-12
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.34-17
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Sec 1. Sections 25A-1, 25A-2, 25A-3, 25A-4, 25A-5, 25A-5A, 25A-5B,
25A-6, 25A-7, 25A-8, 25A-9, and 25A-12 are amended as follows:
25A-1. Legislative findings.
[The County Council hereby finds that a severe housing problem exists within
the County with respect to the supply of housing relative to the need for housing for
residents with low and moderate incomes. Specifically, the County Council finds
that:
(1)
The County is expenencmg a rapid increase in residents of or
approaching retirement age, with consequent fixed or reduced incomes;
young adults of modest means forming new households; government
employees in moderate income ranges; and mercantile and service
personnel needed to serve the expanding industrial base and population
growth of the County;
(2)
A rising influx of residents into higher priced housing in the County
with resultant demands for public utilities, governmental services, and
retail and service businesses has created an increased need for housing
for persons of low and moderate income who are employed in the stated
capacities;
(3)
The supply of moderately priced housing was inadequate in the mid-
1960's and has grown since then at a radically slower pace than the
demand for such housing;
(
4)
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The inadequate supply of housing in the County for persons of low and
moderate income results in large-scale commuting from outside the
County to places of employment within the County, thereby overtaxing
existing roads and transportation facilities, significantly contributing to
air and noise pollution, and engendering greater than normal personnel
turnover in the businesses, industry and public agencies of the County,
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BILL No.34-17
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all adversely affecting the health, safety and welfare of and resulting in
an added financial burden on the citizens of the County;
(5)
A careful study of market demands shows that approximately one-third
of the new labor force in the County for the foreseeable future will
require moderately priced dwelling units;
(6)
Demographic analyses indicate that public policies which permit
exclusively high-priced housing development discriminate against
young families, retired and elderly persons, single adults, female heads
of households, and minority households; and such policies produce the
undesirable and unacceptable effects of exclusionary zoning, thus
failing to implement the Montgomery County housing policy and the
housing goal of the general plan for the County;
(7)
Experience indicates that the continuing high level of demand for more
luxurious housing, with a higher profit potential, discourages developers
from offering a more diversified range of housing; and the production of
moderately priced housing is further deterred by the high cost of land,
materials, and labor;
(8)
Actual production experience in the County indicates that if land costs
can be reduced, houses of more modest size and fewer amenities can be
built to be sold at a profit in view of the existing ready market for such
housing;
(9)
Every indication is that, given the proper incentive, the private sector is
best equipped and possesses the necessary resources and expertise
required to provide the type of moderately priced housing needed in the
County;
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BILLN0.34-17
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(10) Rapid regional growth and a strong housing demand have combined to
make land and construction costs very high and to have an effect on the
used housing market by causing a rise in the prices of those units;
(11) In past years efforts have been made to encourage moderately priced
housing construction through zoning incentives permitting greater
density and through relaxation of some building and subdivision
regulations. Very little moderately priced housing had resulted; and
(12)
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In some instances existing housing for persons of low and moderate
income is substandard and overcrowded.]
@}
The County enacted the Moderately Priced Dwelling Unit (MPDU) law
in 1973 to:
ill
ill
ill
help meet the goal of providing
~
full range of housing choices
for all incomes, ages and household sizes;
meet the existing and anticipated need for low and moderate-
income housing;
ensure that that moderately priced housing is dispersed
throughout the County consistent with the General Plan and area
master plans; and
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ill
encourage the construction of moderately priced housing
!2y
allowing optional increases in density including the MPDU
density bonus to offset the cost of construction.
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Di}
In 2004, the County Council amended the MPDU program to:
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ill
Reduce the loss of MPDUs
by
extending the control period for
for-sale MPDUs from 10 years to 30 years and for rental MPDUs
from 20 years to 99 years;
ill
Allow different income eligibility standards in recognition of the
higher cost of construction of certain~ of housing;
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0
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BILL No.34-17
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ill
Increase the number of developments required to provide
MPDUs
.!2y
lowering the base requirement from any development
with 3 5 or more units to 20 or more units; and
.(±}
Place additional requirements and structure on the approval of an
alternative payment made to the Housing Initiative Fund in place
of providing MPDUs.
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.{£2
In 201 7, the County Council finds that:
ill
ill
The availability of affordable housing continues to be
~
problem
for low and moderate income households.
The 2015 report "The Greater Washington Region's Housing
Needs 2023" projects that Montgomery County will need 14,960
new housing units for households earning less than 80% of area
median income.
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ill
The 2017 Montgomery County Rental Housing Study reports that
68% of households with incomes between 50% and 80% of area
median income report paying more than 30% of income for rent
and 15% report being extremely rent burdened, paying more than
50% of
for rent.
- - -
income
- - -
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ill
The creation of income-restricted affordable housing through
construction and preservation is critical as market rents continue
to increase. The American Community Survey reports that there
were 9,189 fewer rental units with rents between $750 and
$1,499 from 2010 to 2014.
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ill
MPDUs are one important element for providing income-
restricted affordable housing.
There were 681 new MPDUs
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offered for sale or rent in 2015 and 2016.
As
of 2017 there are
about 5,300 MPDUs county-wide.
0
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.(fil
Additional density can offset the cost of constructing MPDUs. It
is appropriate to consider different base requirements for MPDUs
in conjunction with the approval of different densities and heights
in master plans and sector plans.
ill
There is unmet demand for MPDUs with two, three, and four
bedrooms. Providing flexibility that allows MPDU agreements
based on floor area or square footage, rather than requirements
based on the number of bedrooms in market rate units, can help
to address this need.
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.{fil
Appropriate alternative payments to the Housing Initiative Fund
can, in certain circumstances, be used to create more MPDUs in
the same Policy Area than providing the MPDUs on site.
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.(22
Montgomery County is committed to its policy of providing
affordable housing in all areas of the County to provide
opportunity to households of all incomes in each Policy Area.
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{1Q}
MPDUs can be used in partnership with other housing supports to
provide affordable housing to households with very low incomes
such as those with incomes below 50% or 30% of area median
mcome.
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25A-2. Declaration of public policy.
The County Council hereby declares it to be the public policy of the County
to:
[(1)
Implement the Montgomery County housing policy and the general plan
goal of providing for a full range of housing choices, conveniently
located in a suitable living environment, for all incomes, ages and
family sizes;
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(2)
Provide for low- and moderate-income housing to meet existing and
anticipated future employment needs in the County;
Assure that moderately priced housing is dispersed within the County
consistent with the general plan and area master plans;
(3)
(4)
Encourage the construction of moderately priced housing by allowing
optional increases in density in order to reduce land costs and the costs
of optional features that may be built into such moderately priced
housing;
(5)
Require that all subdivisions of 35 or more dwelling units include a
minimum number of moderately priced units of varying sizes with
regard to family needs, and encourage subdivisions with fewer than 35
units to do the same;
(
6)
Ensure that private developers constructing moderately priced dwelling
units under this Chapter incur no loss or penalty as a result thereof, and
have reasonable prospects of realizing a profit on such units by virtue of
the MPDU density bonus or public benefit provisions of Chapter 59
and, in certain zones, the optional development standards; and
(7)
Allow developers of residential units in qualified projects more
flexibility to meet the broad objective of building housing that low- and
moderate-income households can afford by letting a developer, under
specified circumstances, comply with this Chapter by contributing to a
County Housing Initiative Fund.]
ill
encourage and maintain
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wide choice of housing
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and
neighborhoods for people of all incomes ages, lifestyles, and physical
capabilities at appropriate locations and densities and to implement
policies to bridge housing affordability
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ill
ill
make housing that is affordable to low, moderate, and middle income
households
,;:i
priority in all parts of the County;
ensure that all master plan and sector plan amendments address the need
for housing for low, moderate, and middle income households and
promote specific strategies to meet that need including height and
density incentives and flexibility;
.(1)
implement policies that increase the long-term supply of rental housing
affordable to low and moderate income households, particularly in areas
that are easily accessible to transit;
ill
require all subdivisions of 20 or more dwelling units include
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minimum
number of moderately priced units on-site, or under certain specified
circumstances, provide appropriate units off-site or make
the Housing Initiative Fund; and
~
payment to
.(fil
allow the Department of Housing and Community Affairs and
developers flexibility to enter into affordable housing agreements that
address the needs for housing units of different sizes and bedroom
counts to better meet the needs of low and moderate income
households.
25A-3. Definitions.
The following words and phrases, as used in this Chapter, have the following
meanmgs:
Age-restricted unit
means
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dwelling unit, the occupancy of which is
conditioned on at least one resident being
~
certain age or older.
Area median income
means the median household income for
Montgomery County as estimated by the U.S. Department of Housing
and Urban Development.
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No.34-17
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[(a)]
Applicant
means any person, firm, partnership, association, joint
venture, corporation, or any other entity or combination of entities, and
any transferee of all or part of the land at one location.
[(b )]
At one location
means all adjacent land of the applicant if:
(1)
The property lines are contiguous or nearly contiguous at any
point; or
(2)
The property lines are separated only by a public or private street,
road, highway or utility right-of-way, or other public or private
right-of-way at any point; or
(3)
The property lines are separated only by other land of the
applicant which is not subject to this Chapter at the time of any
permit, site plan, development or subdivision application by the
applicant.
[( c)]
Available for building development
means all land:
(1)
(2)
Owned by, or under contract to, the applicant;
Zoned for any type of residential development to which an
optional density bonus provision applies;
(3)
(4)
Which will use public water and sewerage; and
Which is already subdivided or is ready to be subdivided for
construction or development.
[(d)]
Closing costs
means statutory charges for transferring title, fees
for
obtaining necessary financing, title examination fees, title insurance
premiums, house location survey charges and fees for preparation of
loan documents and deed of conveyance.
[(e)]
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Commission
means the Housing Opportunities Commission of
Montgomery County.
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[(f)]
Consum(!r Price Index
means the latest published version of the
Consumer Price Index for All Urban Consumers (CPI-U) of the U.S.
Department of Labor for the Washington metropolitan area, or any
similar index selected by the County Executive.
[(g)]
Control period
means the time an MPDU is subject to either resale price
controls and owner occupancy requirements or maximum rental limits,
as provided in Section 25A-9. The control period is 30 years for sale
units and 99 years for rental units, and begins on the date of initial sale
or rental. If a sale MPDU is sold to an eligible [person] household
within 30 years after its initial sale, and if (in the case of a sale MPDU
that is not bought and resold by a government agency) the unit was
originally offered for sale after March 1, 2002, the unit must be treated
as a new sale MPDU and a new control period must begin on the date of
the sale.
[(h)]
Date of original sale
means the date of settlement for purchase of a
moderately priced dwelling unit.
[(i)]
Date of original rental
means the date the first lease agreement for a
moderately priced dwelling unit takes effect.
[G)]
Department
means the Department of Housing and Community Affairs.
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[(k)]
Director,
except as otherwise indicated, means the head of the
Department of Housing and Community Affairs, or the Director's
designee.
[(l)]
Dwelling unit
means a building or part of a building that provides
complete living facilities for one family, including at a minimum.,_
facilities for cooking, sanitation and sleeping.
[(m)]
Eligible [person] household
means a [person· or] household whose
income qualifies the [person or] household to participate in the MPDU
®
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BILL No.34-17
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program, and who [holds a valid certificate of eligibility from the
Department which entitles the person or household] is eligible to buy
[or rent] an MPDU during the priority marketing period.
((n)]
Housing Initiative Fund
means a fund established by the County
Executive to achieve the purposes of Section 25B-9.
[(
o )]
Low income
means levels of income within the income range for "very-
low income families" established from time to time by the U.S.
Department of Housing and Urban Development for the Washington
metropolitan area, under federal law, or as defined by executive
regulations.
[(p )]
Moderate income
means those levels of income, established in
executive regulations, which prohibit or severely limit the financial
ability of persons to buy or rent housing in Montgomery County.
Moderate income
levels must not exceed the "low income" limits set by
the U.S. Department of Housing and Urban Development to determine
eligibility for assisted housing programs.
[(q)]
Moderately priced dwelling unit
or
MPDU
means a dwelling unit which
1s:
(1)
offered for sale or rent to eligible [persons] households through
the Department, and sold or rented under this Chapter; or
(2)
sold or rented under a government program designed to assist the
construction or occupancy of housing for families of low or
moderate income, and designated by the Director as an MPDU.
[(r)]
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Optional density bonus provision
means any increase in density under
Chapter 59, m a zoning classification that allows residential
development, above the amount permitted in the base or standard
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method of development, whether by exercise of the optional provisions
of Chapter 59 or by any special exception or conditional use.
[(s)]
Planning Board
means the Montgomery County Planning Board.
[(t)]
Priority marketing period
is the period an MPDU must be offered
exclusively for sale or rent to eligible [persons] households, as provided
in Section 25A-8.
25A-4. [Income] Household income and eligibility standards.
(a)
The County Executive must set and annually revise standards of
eligibility for the MPDU program by regulation. These standards must
specify moderate-income levels for varying sizes of households which
will qualify a person or household to buy or rent an MPDU. The
Executive must set different income eligibility standards for buyers and
renters. The Executive may set different income eligibility standards for
buyers and renters of higher-cost or age-restricted [housing] units, as
defined by regulation.
(b)
In establishing standards of eligibility and moderate-income levels, the
Executive must consider:
(1)
[the price established for the sale or rental of MPDUs under this
Chapter,] income levels relative to area median income; and
(2)
[the term and interest rate that applies to the financing of
MPDUs,
the estimated levels of income necessary to carry a mortgage on
anMP DU, and
family size and number of dependents.
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(
c)
(3)
(4)]
A person who rents an MPDU and lawfully occupies it when the unit is
offered for sale may buy the unit, regardless of the person's income at
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N0.34-17
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the time of sale, if the person met all eligibility standards when the
person first rented the unit.
(
d)
A person who rents an MPDU after meeting all eligibility standards
may continue to occupy the unit for the term of the lease even if the
person ceases to meet the income eligibility standards.
.{fil
A person who buys an MPDU after meeting all eligibility standards may
retain ownership of the MPDU even if the person ceases to meet income
eligibility standards during the term.
ill
To be eligible to buy or rent an MPDU other than an age-restricted unit,
a person and members of that person's household must not have owned
any residential property during the previous [5] five years. The Director
may waive this restriction for good cause.
25A-5. Requirement to build MPDUs; payment
to
Housing Initiative Fund;
agreements
(a)
The requirements of this Chapter to provide MPDUs apply to any
applicant who:
(1)
submits for approval or extension of approval a preliminary plan
of subdivision under Chapter 50 which proposes the development
of a total of 20 or more dwelling units at one location in one or
more subdivisions, parts of subdivisions, resubdivisions, or stages
of development, regardless of whether any part of the land has
been transferred to another party;
(2)
submits to the Planning Board or to the Director of Permitting
Services a plan of housing development for any type of site
review or development approval required
by
law, which proposes
construction or development of 20 or more dwelling units at one
location; or
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(3)
with respect to land in a zone not subject to subdivision approval
or site plan review, applies for a building permit to construct a
total of 20 or more dwelling units at one location.
Di)
An applicant for an approval or permit identified in subsection
.(fil
who
proposes development of fewer than 20 dwelling units is not required to
provide MPDUs, but must make
Fund, as provided by regulation.
~
payment to the Housing Initiative
(£}
In calculating whether a development contains a total of 20 or more
dwelling units for the purposes of this Chapter, the development
includes all land at one location in the County available for building
development under common ownership or control by an applicant,
including land owned or controlled by separate corporations in which
any stockholder or family of the stockholder owns IO percent or more
of the stock. An applicant must not avoid this Chapter by submitting
piecemeal applications or approval requests for subdivision plats, site or
development plans, floating zone plans, or building permits.
Any
applicant may apply for a preliminary plan of subdivision, site or
development plan, floating zone plan, record plat, or building permit for
fewer than
20
dwelling units at any time; but the applicant must agree in
writing that the applicant will comply with this Chapter when the total
number of dwelling units at one location reaches 20 or more.
[(b
)]@
Any applicant subject to subsection
.(fil,
in order to obtain a
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building permit, must submit to the Department of Permitting Services[,
with the application for a permit,] a written MPDU agreement approved
by the Director and the County Attorney. Each agreement must require
that:
@
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(1)
a specific number of MPDUs must be constructed on an
approved time schedule;
in subdivisions with single-family dwelling [unit subdivisions]
units, including townhouses, each MPDU must have 3 or more
bedrooms; and
(2)
(3)
in subdivisions with multi-family dwelling [unit subdivisions]
units, the [number] ratio of efficiency [and one- bedroom]
MPDUs to total MPDUs [each] must not exceed the ratio [that]
of market-rate efficiency [and one-bedroom] units [respectively]
[bear] to [the] total [number of] market-rate units in the
subdivision.
The Director [must not] may approve an MPDU agreement that
[reduces the number of bedrooms required by this subsection in any
MPDU] approximates the total floor area for the units required, but
alters the bedroom mix of the units or the number of units.
[(
c)]{ru
~
When [the]
development with more than 20 units at one
location is in a zone where a density bonus is allowed; and
(1)
(2)
is covered by a plan of subdivision;
is covered by a plan of development, site plan, or floating zone
plan; or
(3)
reqmres a building permit to be issued for construction, the
required number of [moderately priced dwelling units] MPDUs is
a variable percentage that is not less than~ base requirement of
12.5% of the total number of dwelling units or equivalent floor
area at that location, not counting any workforce housing units
built under Chapter 25B. The Council may establish~ higher
base requireme nt,~ to 15% of the total number of dwelling units
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0
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BILL
N0.34-17
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or equivalent floor area at
~
location, as part of
~
master plan
approval. The required number of MPDUs must vary according
to the amount by which the approved development exceeds the
normal or standard density for the zone in which it is located.
Chapter 59 may permit bonus densities over the presumed base
density where MPDUs are provided. If the use of the optional
MPDU development standards does not result in an increase over
the base density, the Director must conclude that the base density
could not be achieved under conventional development standards,
in which case the required number of MPDUs must not be less
than the 12.5% or higher base requirement established by the
Council, of the total number of units in the subdivision. To obtain
~
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density bonus, an applicant must provide at least one more
MPDU than would have been required if there was no density
bonus. The amount of density bonus achieved in the approved
development determines the percentage of total units that must be
MPDUs, as follows:
Achieved
Density Bonus
Zero
MPDUs
Required
[12.5%]
Base requirement · .
Upto 1%
[12.6%]
Base plus 0.1 %
Upto2%
[12.7%]
Base plus 0.2%
Upto 3%
[12.8%]
Upto 14%
Upto 13%
Upto 12%
Achieve d
Density Bonus
Upto 11%
MPDUs
Required
{13.6%]
Base plus I.I%
[13.7%]
Base plus 1.2%
[13.8%]
Base plus 1.3 %
[13.9%]
0
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BILL
No.34-17
Base plus 0.3%
Upto4%
[12.9%]
Base plus 0.4%
Upto 5%
[13.0%]
Base plus 0.5%
Upto 6%
[13.1%]
Base plus 0.6%
Upto 7%
[13.2%]
Base plus 0.7%
Upto 8%
[13.3%]
Base plus 0.8%
Upto9%
[13.4%]
Base plus 0.9%
Upto 10%
[13.5%]
Base plus 1.0%
387
388
389
390
391
392
393
394
395
1,~ ,,
"
,.
~
:~
1:,
I" fl
I'~
~
Base plus 1.4%
-
.,
Upto 15%
[14.0%]
Base plus 1.5%
Upto 16%
Ii
[14.1%]
Base plus 1.6%
f~
~-
',
Upto 17%
[14.2%]
Base plus 1. 7%
JI
Upto 18%
[14.3%]
Base plus 1.8%
Upto 19%
[14.4%]
Base plus 1.9%
I'
Upto20%
[14.5%]
Base plus 2.0%
Upto22%
[15.0%]
Base plus 2.5%
[(d)]ill(l)
Notwithstanding subsection [(c)]W, the Director may allow
fewer or no MPDUs to be built in a development with more than
20 but fewer than 50 units at one location if:
(A)
the Planning Board, in reviewing a subdivision or site plan
submitted by the applicant and based on the lot size,
product type, and other elements of the plan as submitted,
finds that achieving a bonus density of 20 percent or more
at that location:
0
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BILL No.34-17
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[(A)]ill
would not allow complian ce with applicable
standards
and
other regulatory
environmental
requirements[,]; or
[(B)].{fil
would significantly reduce neighborhood
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411
compatibility~ and
QU
the applicant makes
~
payment to the Housing Initiative
Fund, as provided by regulation, based on the square
footage of MPDU units that would otherwis e have been
required.
(2)
If the Planning Board approves a density bonus of at least 20
percent for a development which consists of 20 or more but fewer
than 50 units at one location, the number of [MPDU' s] MPDUs
required must be governed by subsection [(c)].{fil unless the
formula in subsection [(c)].{fil would not allow the development
to have one bonus market rate unit. In that case, the Board must
reduce the required number of [MPDU' s] MPDUs by one unit
and approve an additional market rate unit.
412
413
[(e)](g)
The Director may approve an MPDU agreement that:
allows an applicant to reduce the number of MPDUs m a
subdivision only if the agreeme nt meets all requirements of
Section 25A-5A for an alternative payment agreement; or
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422
(1)
(2)
allows an applicant to build the MPDUs at another location only
if the agreement meets all requirements of Section 25A-5B for an
alternative location agreement.
[(f)]{hl(l)
An
applicant may satisfy this Section by obtaining approval from
the Director to transfer land to the County before applying for a
building permit. [The applicant must sign a written land transfer
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BILL
No.34-17
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agreement approved by the Director and by the County Attorney.
For the Director to consider the request and take timely action, a
written notice of the applicant's intent to submit an agreement
should be served upon the Director at least 90 days before the
application for a building permit is filed. The land transfer
agreement must covenant that so much of the land, designated in
the approved preliminary plan or site plan as land to which the
optional zoning provisions for MPDUs apply, as is necessary in
order to construct the number of MPDUs required by subsection
(a) will be transferred, as finished lots, to Montgomery County or
to the County's designee before the building permit is issued, so
that the County might cause MPDUs to be constructed on the
transferred
land.
After
the
submission
of
supporting
documentation and review and approval by the County for the
transfer of finished lots, the County must reimburse the applicant
for the costs the applicant actually incurred, which are directly
attributable to the finishing of the MPDU lots so transferred.
Reimbursable costs include but are not limited to engineering
costs; clearing, grading, and paving streets, including any
required bonds and permits; installation of curbs, gutters and
sidewalks; sodding of public right-of-way; erection of barricades
and signs; installation of storm sewers and street lighting; and
park and other open space and recreational development directly
benefiting the MPDU lots transferred. The County must not
reimburse an applicant for the cost or value of the transferred
lots.]
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BILL
No.34-17
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(2)
[If
an applicant transfers land to the County under this subsection
and no funds have been appropriated to reimburse the applicant
for his finishing costs, the County may accept from the applicant
undeveloped land rather than finished lots, or the applicant may
transfer the finished lots to the County without requiring payment
for finishing the lots.] The Director may only approve ~ transfer
of land under this subsection after
~
making
~
written
determination that the value of the land transferred is at least
equal to the value of the MPDUs not constructed
hy
the
applicant.
(3)
[Notwithstanding any other provisions of the subsection, the
County may reject an election by an applicant to transfer land to
the County in whole or
in
part whenever the public interest would
best be served thereby. Any rejection and the reasons for the
rejection may be considered by the Planning Board or the
Director of Permitting Services in deciding whether to grant the
applicant a waiver of this Chapter under Section 25A-7(b).] The
Executive must establish procedures for transferring land under
this subsection
!2y
method
ill
regulation.
[(4)
Any transfer of land to the County hereunder is not subject to
Section 1lB-33, and any land so transferred is not property
subject to Section 1 lB-3 lA regulating the disposal of surplus
land. The Director may dispose of the lots in a manner that
furthers the objectives of this Chapter.]
[(g)]ill
The MPDU agreements must be signed by the applicant and all
other parties whose signatures are required by law for the effective and
binding execution of contracts conveying real property. The agreements
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BILL No.34-17
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must be executed in a manner that will enable them to be recorded in the
land records of the County. If the applicant is a corporation, the
agreements must be signed by the principal officers of the corporation
individually and on behal f of the corporation. Partnerships, associations
or corporations must not evade this Chapter through voluntary
dissolution. The agreements may be assigned if the County approves,
and if the assignees agree to fulfill the requirements of this Chapter.
[(h)]ill
The Department of Permitting Services must not issue a building
permit in any subdivision or housing development in which MPDU s are
required until the applicant submits a valid MPDU agreement which
applies to the entire subdivision or development. The applicant must
also file with the first application for a building permit a statement of all
land the applicant owns in the County that is available for building
development. In later applications, the applicant need only show
additions and deletions to the original landholdings available for
building development.
. [(i)]{k}
The MPDU agreement must include the number, type, location,
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494
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499
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501
and plan for staging construction of all dwelling units and such other
information as the Department requires to determine the applicant's
compliance with this Chapter. The MPDU staging plan must be
consistent with any applicable land use plan, subdivision plan, or site
plan. The staging plan included in the MPDU agreement for all
dwelling units must be sequenced so that:
(1)
(2)
MPDUs are built along with or before other dwelling units;
no or few market rate dwelling units are built before any MPDUs
are built;
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BILL No.34-17
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(3)
the pace ofl\1PD U production must reasonably coincide with the
construction of market rate units; and
(4)
the last building built must not contain only l\1PDUs.
This subsection applies to all developments, including any development
covered by multiple preliminary plans of subdivision.
[G)J{l}The MPDU agreement must provide for any requirement of age-
restricted units to be offered for sale to be satisfied
Qy
£1.
paymen t to the
Housing Initiative Fund under Section 25A-5A(b).
(m)
If an applicant does not build the l\1PDUs contained in the staging plan
along with or before other dwelling units, the Director of Permitting
Services must withhold any later building permit to that applicant until
the MPDU s contained in the staging plan are built.
[(k)]fu}
511
512
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The applicant must execute and record covenants assuring that:
The restrictions of this Chapter run with the land for the entire
period of control;
(1)
(2)
The County may create a lien to collect:
(A)
that portion of the sale price of an l\1PDU which exceeds
the approved resale price; and
(B)
that portion of the foreclosure sale price of an l\1PDU
which exceeds the approved resale price; and
(3)
The covenants will bind the applicant, any assignee, mortgagee,
or buyer, and all other parties that receive title to the property.
These covenants must be senior to all instruments securing
permanent financing.
[(l)].{Q}
An
applicant must not establi sh~ condominium or homeowners'
In any purchase and sale agreement and any deed or instrument
association consisting solely of MPDUs.
.(p}
(
1)
®
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BILL
No.34-17
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conveymg title to an MPDU, the grantor must clearly and
conspicuously state, and the
conspicuously acknowledge, that:
(A)
the conveyed property is [a] an MPDU and is subject to the
restrictions contained in the covenants required under this
Chapter during the control period until the restrictions are
released; and
(B)
any MPDU owner, other than an applicant, must not sell
the MPDU until:
(i)
the owner has notified the Department under
Section 25A-8 or 25A-9, as applicable, that the unit
is for sale;
(ii)
the
Department
and,
where
applicable,
the
grantee must clearly and
Commission, have notified the owner that they do
not intend to buy the unit; and
(iii)
The Department has notified the owner of the unit's
maximum resale price.
(2)
Any deed or other instrument conveying title to an MPDU during
the control period must be signed by both the grantor and grantee.
(3)
When a deed or other instrument conveying title to an MPDU is
recorded in the land records, the grantor must cause to be filed in
the land records a notice of sale for the benefit of the County in
the form provided by state law.
[(m)].(g,)
Nothing in this Chapter prohibits an applicant from voluntarily
building MPDUs, as calculated under subsection [(c)]W, in a
development with fewer than 20 dwelling units at one location, and in
so doing from qualifying for an optional method of development under
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BILL
N0.34-17
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Chapter 59. A development with fewer than 20 dwelling units where an
applicant voluntarily builds MPDUs must comply with any procedures
and development standards that apply to a larger development under
this Chapter and Chapter 59. Sections 25A-5A, 25A-5B, and 25A-6(b)
do not apply to an applicant who voluntarily builds [MPDU's] MPDUs
under this subsection and in so doing qualifies for an optional method of
development.
25A-5A. Alternative payme nt agreement.
(a)
The Director may approve an MPDU agreement that allows an
applicant, instead of building some or all of the required number of
MPDUs in the proposed subdivision, to pay to the Housing Initiative
Fund an amount computed under subsection (b)[, only if an Alternative
Review Committee composed of the Director, the Commission's
Executive Director, and the Director of Park and Planning, or their
respective designees, by majority vote finds] upon~ finding that:
(1)
either:
(A)
an indivisible package of services and facilities available to
all residents of the proposed subdivision would cost
MPDU buyers so much that it is likely to make the
MPDUs effectively unaffordable by eligible buyers; or
(B)
[environmental constraints at a particular site would render
the building of all required MPDUs at that site
economically infeasible]
the public benefit of affordable housing throughout the
County outweighs the value of locating MPDUs in each
subdivision throughout the County; and
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No.34-17
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(2)
[the public benefit of additional affordable housing outweighs the
value of locating MPDU s in each subdivision throughout the
County, and] accepting the payment will further the objective of
providing a broad range of housing opportunities throughout the
County.
(b)
[Any payment to the Housing Initiative Fund under this Section must
equal or exceed 125% of the imputed cost of land for each unbuilt
MPDU. Except as further defined by Executive regulation, the imputed
land cost must be calculated as 10% (for high-rise units) or up to 30%
(for all other housing units) of the actual sale price charged for each
substituted unit.
If
the substituted unit will be a rental unit, the Director
must calculate an imputed sale price under applicable regulations, based
on the rent actually charged.] A payment under this section must be
calculated as provided in method
ill
regulation.
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595
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600
(c)
[Any] A payment to the Housing Initiative Fund under this Section
ill
(2)
must not be used to reduce the annual County payment to the
Fund;and
may be used [only] to buy or build more MPDUs in [the same
planning policy area]
~
Policy Area (as defined in the County
601
602
603
604
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606
1
[
[Growth] Subdivision Staging Policy) [as) other than that of the
development for which the payment was made only after:
(A)
notice is provided to the Council; and
the Council is given at least 30 days to comment.
ill)
and must not be used to reduce the annual County payment to the
Fund.]
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BILL N0.34-17
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[(d)
Any subdivision for which a payment is made under this Section is not
eligible for any density bonus for which it would otherwise be eligible
under Chapter 59.]
25A-5B. Alternative location agreement.
(a)
The Director may approve an MPDU agreement that allows an
applicant for development of a high-rise residential building, instead of
building some or all of the required number of MPDUs on-site, to
provide [at least the same number of] MPDUs at another location in the
same [planning policy area] Policy Area, only if the Director finds that:
(1) the public benefit of locating MPDUs at the proposed alternative
location outweighs the value of locating MPDUs in each
subdivision throughout the County; [and]
(2)
building the MPDUs at the proposed alternative location will
further the objective of providing a broad range of housing
opportunities throughout the County; and
ill
(b)
the alternative location agreement will increase the number of
MPDUs provided as~ result of the development.
To satisfy the requirements of this Section, an applicant may:
(1)
build, or convert from non-residential use, the required number of
new MPDUs at a site approved by the Director;
(2)
buy, encumber, or transfer, and rehabilitate as necessary, existing
market rate housing units that meet all standards for use as
MPDUs; or
(3)
return to MPDU use, and rehabilitate as necessary, existing
MPDUs for which price or rent controls have expired.
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631
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BILL No.34-17
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(
c)
Each agreement under this Section must include a schedule, binding on
the applicant, for timely completion or acquisition of the required
number ofMP DUs.
25A-6. Optional zoning provisions[; waiver of requirements].
[(a)
Optional zonin g provisions.)
The County Council, sitting as a District
Council for the Maryland-Washington Regional District within the
County, to assist in providing moderately priced housing has enacted
zoning standards in Chapter 59, establishing in certain zones optional
density bonus provisions which increase the allowable residential
density above the maximum base density of the zoning classification
and permit alternative dwelling unit types other than those allowed
under the standard method of development. Land upon which the
applicant must build MPDUs may, at the applicant's election, be subject
to optional zoning provisions. If the applicant elects the optional density
provisions, permitting the construction of an increased number of
dwelling units, the requisite percentage and number of MPDUs must
apply to the total number of dwelling units as increased by application
of the optional density provisions or by the approval of a special
exception that increases the density above the otherwise permitted
density of the zoning classification in which the property is situated.
[(b)
Waiver ofrequirements.
Any applicant who presents sufficient evidence
to the Director of Permitting Services in applying for a building permit,
or to the Planning Board in submitting a preliminary plan of subdivision
for approval or requesting approval of a site or other development plan,
may be granted a waiver from part or all of Section 25A-5. The waiver
must relate only to the number of MPD Us to be built, and may be
granted only if the Director of Permitting Services or the Board, after
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658
®
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BILL No.34-17
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consulting with the Department of Housing and Community
Development Affairs, finds that the applicant cannot attain the full
density of the zone because of any requirements of the zoning ordinance
or the administration of other laws or regulations. When any part of the
land that dwelling units cannot be built on for physical reasons is used
to compute permitted density, the applicant's inability to use the
optional density bonus provisions is not in itself grounds for waiving the
MPDU requirements. Any waiver must be strictly construed and
limited.]
25A-7. Maximum prices and rents.
Moderately priced dwelling units must not be sold or rented at prices or rents
that exceed the maximum prices or rents established under this Section.
(a)
Sales.
(1)
The sale pnce of any MPDU, including closing costs and
brokerage fees, must not exceed an applicable maximum sale
price established from time to time by the County Executive in
regulations adopted under method (1).
(2)
[The County Executive in issuing MPDU sale price regulations
must seek appropriate information, such as . current general
market and economic conditions and the current minimum sale
prices of private market housing in the County, and must consult
with the building industry, employers, and professional and
citizen groups to obtain statistical information which may assist
in setting a current maximum sale price. The County Executive
must, from time to time, consider changes in the income levels of
persons of low and moderate income and their ability to buy
housing. The County Executive must also consider the extent to
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683
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685
®
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BILL
No.34-17
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which, consistent with code requirements, the cost of housing can
be reduced by the elimination of amenities, the use of cost-
reducing building techniques and materials, and the partial
finishing of certain parts of the units.] The regulations adopted to
implement this Section must allow the Director to:
(A)
restrict those conditions of the design, construction,
pricing, or amenity package of an MPDU project that will
impose excessive mandatory homeowner or condominium
fees or other costs that reduce the affordability of the
MPDUs; and
.(ill
approve an increase of
!!P
to 10% over the base sale price
of an MPDU upon
~
finding that the increase is justified to
cover the cost of~ modification of the external design of
the MPDU necessary to reduce excessive marketing
impact of the MPDU on the market rate units in the
subdivision.
[(3)
The County Executive must issue maxllllum sale pnces for
MPDUs which continue in effect until changed by later
regulation. The maximum sale prices must be based on the
necessary and reasonable costs required to build and market the
various kinds of MPDUs by private industry. The sale prices for
any succeeding year must be based on a new finding of cost by
the County Executive, or on the prior year's maximum MPDU
price adjusted by the percentage change in the relevant cost
elements indicated in the Consumer Price Index.
(4)
The County Executive may make interim adjustments in
maximum MPDU sale prices when sufficient changes in costs
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BILL No.34-17
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justify an adjustment. Any interim adjustment must be based on
the maximum MPDU sale prices previously established, adjusted
by the percentage change in the relevant cost elements indicated
in the Consumer Price Index.
(5)
If the Director finds that other conditions of the design,
construction, pricing, or amenity package of an MPDU projec t
will lessen the ability of eligible persons to afford the MPDU s,
the Director, under executive regulations, may restrict those
conditions that will impose excessive mandatory home owner or
condominium fees or other costs that reduce the affordability of
theMP DUs.
(6)
The Director may let an applicant increase the sale price of a
MPDU when the Director, under executive regulations, finds in
exceptional cases that a price increase is justified to cover the cost
of modifying the external design of the MPDU s when a
modification is necessary to reduce excessive marketing impac t
of the MPDUs on the market rate units in the subdivision. The
Director must approve the amount of any increase for this
purpose, which must not exceed 10 percent of the allowable base
price of the unit.]
(b)
Rents.
[(
1)]
732
733
734
The rent, including surface parking but excluding utilities when
they are paid by the tenant, for any MPDU must not excee d a
maximum rent for the dwelling unit set by Executive regulations.
Different rents must be set for
units
when utility costs are paid by
the owner and included in the rent. Different rents may be set for
age-restricted units. Different rents also may be set for high-rise
735
736
737
738
739
®
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BILL
No.34-17
740
741
742
743
744
745
746
747
748
749
750
751
752
753
754
755
756
757
758
rental units[, but those rents must not apply unless the Director
finds that no other reasonable means is available to finance the
building of all required MPDUs at a specific development].
[(2)
The County Executive, in setting the maxi mum rent, must
consider the current cost of building MPDUs, available interest
rates and debt service for permanent financing, current market
rates of return or investments in residential rental properties,
operating costs, vacancy rates of comparable properties, the value
of the MPD U at the end of the control period, and any other
relevant information. The County Executive must consult with
the rental industry, employers and professional and citizen groups
to obtain statistical information and current general market and
economic conditions which may assist in setting a current
maximum rent. The County Executive must consider the extent
to which, consistent with County codes and housing standards,
the cost of rental housing can be reduced by the elimination of
amenities. The County Executive must also consider from time to
time changes in the income levels of persons of low and
moderate income and their ability to rent housing.]
25A-8. Sale or rental of units.
759
760
761
762
763
764
765
766
(a)
Sale or rental to government agencies or nonprofit corporations.
ill
The Department, the Commission, or any other housing
development agency or nonprofit corporation designated
hy
the
County Executive may buy or lease, for its own programs or
programs administered
by
it
!ill
to 40 percent of all MPDUs
which are not sold or rented under any other federal, state, or
local program.
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BILL N0.34-1 7
767
768
769
770
771
772
773
774
775
776
777
778
779
780
781
782
783
784
785
786
787
788
789
790
791
792
793
G)
The Department or Commission may buy or lease
!!12
to 33.3
percent of the MPDUs not sold or rented under any other federal,
state, or local program.
Any other designated agency or corporation may buy or lease:
(A)
any MPDU in the first 33.3 percent that the Department or
Commission has not bought or leased; and
the remainder of the
40
percent specified in subsection
(a)(l).
This option may be assigned to persons who are clients of the
Department of Health and Human Services or to persons of low
or moderate income who are eligible for assistance under any
federal, state, or local program identified in Executive regulation.
ill
ill}
ill
The Executive must, by regulation, adopt standards and priorities
for designating nonprofit corporations under this subsection.
These standards must require the corporation to demonstrate its
ability to operate and maintain MPDUs satisfactorily on~ long-
term basis.
ill
The Department must notify the Commission or other designated
agency or corporation promptly after receiving notice from the
applicant illlder subsection
.(hl
of the availability of MPDUs. If
the Department, the Commission, or any other designated agency
or corporation exercises its option,
i!
must submit to the
applicant, within 21 calendar days after the Department notifies
the Commission under this subsection,
~
notice of intent to
exercise its option for specific MPDUs covered
by
this option.
Any MPDUs not bought or leased under this subsection must be
sold or rented only to eligible households under subsection
.(h)
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BILL
No.34-17
794
795
796
797
798
799
800
801
802
803
804
805
806
807
808
809
810
811
812
during the priority marketing period for eligible households to
buy or lease.
.(fil
In exercising this option, the Department, the Commission, and
any designated agency or corporation must designate the units
.l2y
reference to num ber, ~ size and amenities of the units selected
if the designation does not result in any
~
of unit exceeding
by
more than 40 percent the total units of that
~
which are sold or
rented under this Section, unless the applicant agrees otherwise.
The notice required under subsection
.{filill
must state which
MPDUs are to be offered for sale and which are to be offered for
rent, and the Department, the Commission, and any designated
agency or corporation may buy only units which are offered for
sale and may lease only units which are offered for rent. The
Department, the Commission, and any designated agency or
corporation must decide whether
i!
will exercise its option within
45 days after it receives the original notice.
ill
If more than one government agency or nonprofit corporation
notice of intent under subsection
.{filill
with respect to
particular MPDU:
files
~
~
813
814
815
816
817
818
819
®
{ill
the Department prevails over any other buyer or renter;
The Commission prevails over any buyer or renter other
than the Department;
any other government agency prevails over any nonprofit
corporation;
.(Q
ill}
the first government agency to file
any later agency; and
~
notice prevails over
®
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BILL
N0.34-17
820
821
822
823
824
825
826
827
828
829
830
831
832
833
834
835
836
837
838
.{fil
the first nonprofit corporation to file
any later corporation.
~
notice prevails over
.(fil
Any unit purchased under this subsection that is offered for sale
within five years after initial purchase must first be offered for
sale at the initial purchase price to the Department in accordance
with Executive regulation.
ili)
Sale or rental to genera l public.
(1)
Every moderately priced dwelling unit required under this
Chapter must be offered to the general public for sale or rental to
a good-faith purchaser or renter to be used for his or her own
residence, except units sold or rented under subsection
.{fil
or
offered for sale or rent with the assistance of, and subject to the
conditions of, a subsidy under a federal, state or local government
program, identified in regulations adopted [by the County
Executive] under method (1).,_ whose purpose is to provide
housing for persons oflow or moderate income.
(2)
Before offering any moderately priced dwelling units, the
applicant must notify the Department of the proposed offering
and the date on which the applicant will be ready to begin the
marketing to eligible [persons] households. The notice must set
forth the number of units offered, the bedroom mix, the floor area
for each unit type, a description of the amenities offered in each
unit and a statement of the availability of each unit for sale or
rent, including information regarding any mortgage financing
available to buyers of the designated unit. The applicant must
also give the Department a vicinity map of the offering, a copy of
the approved development, subdivision or site plan, as
f:\lawlbills\1734 mpdu\bill 6.doc
839
840
841
842
843
844
845
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BILL
No.34-17
847
848
appropriate, and such other information or documents as the
Director fmds necessary. The Department must maintain a list of
eligible households [persons of moderate income and], in
accordance with procedures established by the County Executive,
must notify eligible [persons] households of the offering.
(3)
After receiving the complete offering notice, the Department
must notify the Commission of the offering.
[If
the Department
fmds that the offering notice is complete, it must decide whether
the offering of the units to eligible persons will be administered
by lottery or by another method that will assure eligible persons
an equitable opportunity to buy or rent a MPDU.] The
Department must notify the applicant of the method
hy
which the
MPDUs will be offered and when the 90-day priority marketing
period for the MPDUs may begin.
(4)
The Executive may by regulation establish a buyer and renter
selection system which considers household size, County
residency, employment in the County, and length of time since
the person was certified for the MPDU program. Each eligible
[person] household must be notified of the availability of any
MPDU which would meet that person's housing needs, and be
given an opportunity to buy or rent an MPDU during the priority
marketing period in the order of that person's selection priority
ranking.
(5)
The priority marketing period for new units ends not less than 90
days after the initial offering date approved by the Department.
The priority marketing period for resold or rerented units ends
not less than 60 days after the Department notifies the seller of
f:\law\bills\1734 mpdu\bill 6.doc
849
850
851
852
853
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862
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864
865
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868
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BILL No.34-17
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890
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892
the approved resale price or vacancy of the rental unit.
The
Department may extend a priority marketing period when eligible
[persons] households are interested in buying or renting a unit.
(6)
Moderately priced dwelling units, except those built, sold, or
rented under a federal, state, or local program designated by
regulation, must not be offered for rent by an applicant during the
priority marketing period, except in proportion to the market rate
rental units in that subdivision as follows:
(A)
In a subdivision containing only single-family dwellings,
the proportion of rental MPDUs must not exceed the
proportion of market rate rental units to all market rate
units.
(B)
In a subdivision containing both single-family and
multiple-family dwellings, the proportion of rental single-
family MPDUs to all one-family MPDUs must not exceed
the proportion of market rate rental single-family units to
all market rate single-family units; and the proportion of
rental multiple-family MPDUs to all multiple-family
MPDUs must not exceed the proportion of market rate
rental multiple-family units to all market rate multiple-
family units.
(C)
The Director may allow an applicant to offer a higher
proportion of multiple-family MPDUs for rent in a
subdivision if the Director finds that:
(i)
offering more rental MPDUs in that subdivision
would advance the purpose of the County housing
policy and the objectives of any applicable land use
f:\law\bills\ 1734 mpdu\bill 6.doc
893
894
895
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900
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BILLN0.34-17
901
902
903
904
905
906
907
908
909
910
911
plan, be consistent with local housing market
conditions,
and
avoid
excessive
mandatory
condominium or homeowners' association fees or
.
other costs that would reduce the affordability of
sale l\1PDUs; and
(ii)
the applicant has demonstrated that
i1
is qualified to
manage rental housing [and has submitted an
effective management plan for the rental units in
that subdivision].
Applicants must make a good-faith effort to enter into contracts
with eligible [persons] households during the priority marketing
period and for an additional period necessary to negotiate with
eligible [persons] households who indicate a desire to buy or rent
an l\1PDU during that period.
(7)
Every buyer or renter of an l\1PDU must occupy the unit as his or
her primary residence during the control period. Each buyer and
renter must certify before taking occupancy that he or she will
occupy the unit as his or her primary residence during the control
period. The Director may require an owner who does not occupy
the unit as his or her primary residence to offer the unit for resale
to an eligible [person] household under the resale provisions of
Section 25A-9.
(8)
912
913
914
915
916
917
918
919
920
921
922
923
924
925
926
927
An
owner of an l\1PDU, except the Commission or a housing
agency or nonprofit corporation designated by the Director, must
not rent the unit to another party unless the Director finds
sufficient cause to allow temporary rental of the unit under
applicable regulations, which may include maximum rental
®
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BILL
No.34-17
928
929
930
931
932
933
934
935
936
937
938
939
940
941
942
943
944
945
946
levels.
[Any MPDU owner who is allowed to rent a unit
temporarily must agree to amend the applicable MPDU
covenants to extend the control period for a time equal to the
temporary rental period.]
(9)
Any rent obtained for an MPDU that is rented without the
Director's authorization must be paid into the Housing Initiative
Fund by the owner within 90 days after the Director notifies the
owner of the rental violation. Any amount unpaid after 90 days is
grounds for a lien against the unit[,L [and the] The Director may
obtain a judgment and record the lien or may reduce the resale
price of the MPDU or pursue other remedies provided
QY
law.
(10) An applicant must not sell or lease any [unit] MPDU without first
[obtaining a certificate of] verifying the eligibility [from] of the
prospective buyer or lessee. A copy of each certificate must be
furnished to the Department and maintained on file by the
Department.
Before the sale by an applicant or by the
Commission or a designated housing agency or nonprofit
corporation to any buyer of any MPDU who does not possess a
certificate of eligibility, the applicant, the Commission, or the
agency or corporation must ask the Department whether the
certificates on file show that the proposed buyer had previously
bought another MPDU. A person must not buy a second MPDU
unless no first-time buyer is qualified to buy that unit.
Director may waive this restriction for good cause.
(11) If an MPDU owner dies, at least one heir, legatee, or other person
taking title by will or by operation of law must occupy the
The
947
948
949
950
951
952
953
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BILLN0.34-17
954
955
956
957
958
959
960
961
962
963
964
965
966
967
968
969
970
971
972
MPD U during the control period under this Section, or the owner
of record must sell the MPD U as provided in Section 25A-9.
[(b)
Sale or rental to government agencies or nonprofit corporations.
(1)
In view of the critical, long-term public need for housing for
families of low and moderate income, the Department, the
Commission, or any other housing development agency or
nonprofit cmporation designated by the County Executive may
buy or lease, for its own programs or programs administered by
it, up to 40 percent of all MPD Us which are not sold or rented
under any other federal, state, or local program. The Department
or Commission may buy or lease up to 33 percent of the MPD Us
not sold or rented under any other federal, state, or local program.
Any other designated agency or corporation may buy or lease (A)
any MPD U in the first 33 perce nt that HOC has not bought or
leased, and (B) the remainder of the 40 percent. This option may
be assigned to persons of low or moderate income who are
eligible for assistance under any federal, state, or local program
identified in regulations adopted by the Executive. The Executive
must, by regulation, adopt standards and priorities for designating
nonprofit corporations under this subsection. These standards
must require the corporation to demonstrate its ability to operate
and maintain MPDUs satisfactorily on a long-term basis.
973
974
975
976
977
978
979
980
(2)
The Department must notify the Commission or other designated
agency or corporation promptly after receiving notice from the
applicant under subsection (a) of the availability of MPDUs.
If
the Department, the Commission, or any other designated agency
or corporation exercises its option, it must submit to the
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BILL
No.34-17
981
982
983
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985
986
987
988
989
990
991
992
993
994
995
996
997
998
999
applicant, within 21 calendar days after the Department notifies
the Commission under subsection (b ), a notice of intent to
exercise its option for specific MPDU s covered by this option.
Any MPDU s not bought or leased under this subsection must be
sold or rented only to eligible persons under subsection (b) during
the priority marketing period for eligible persons to buy or lease.
(3)
In exercising this option, the Department, the Commission, and
any designated agency or corporation must designate the units by
reference to number, type, size and amenities of the units selected
if the designation does not result in any type of unit exceeding by
more than 40 percent the total units of that type which are sold or
rented under this Section, unless the applicant agrees otherwise.
The notice required under subsection (b)(2) must state which
MPDUs are to be offered for sale and which are to be offered for
rent, and the Department, the Commission, and any designated
agency or corporation may buy only units which are offered for
sale and may lease only units which are offered for rent. The
Department, the Commission, and any designated agency or
corporation must decide whether it will exercise its option within
45 days after it receives the original notice.
(4)
If more than one government agency or nonprofit corporation
files a notice of intent under subsection (b)(2) with respect to a
particular MPDU :
(A)
(B)
the Department prevails over any other buyer or renter;
The Commi ssion prevails over any buyer or renter other
than the Department;
1000
1001
1002
1003
1004
1005
1006
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BILL
No.34-17
1007
1008
1009
1010
1
o
11
1012
1013
1014
1015
1016
1017
1018
1019
1020
1021
1022
1023
1024
1025
(C)
any other government agency prevails over any nonprofit
corporation;
the first government agency to file a notice prevails over
any later agency; and
the first nonprofit corporation to file a notice prevails over
any later corporation.]
(D)
(E)
25A-9. Control of rents and resale prices; foreclosures.
(a)
Resale price and terms.
Except for foreclosure proceedings, any MPDU
constructed or offered for sale or rent under this Chapter must not be
resold or refinanced during the control period for a price greater than the
original selling price plus:
(1)
[A]
f!
percentage of the unit's original selling price equal to the
increase in the cost of living since the unit was first sold, as
determined by the Consumer Price Index;
[The fair market value of] an allowance for improvements made
to the unit between the date of original sale and the date of resale;
[An]
an allowance for closing costs which were not paid by the
(2)
(3)
initial seller, but which will be paid by the initial buyer for the
benefit of the later buyer; and
(4)
[A]
f!
reasonable sales commission if the unit is not sold during
the priority marketing period to an eligible [person] household
from the Department's eligibility list.
In determining the amount of the allowance for improvements under
paragraph
ID
the Director may disallow the value of improvements
determined to be unnecessary for the maintenance and upkeep of the
unit. The resale price of an MPDU may be reduced if the physical
condition of the unit reflects abnormal wear and tear because of neglect,
f:\law\bills\1734 mpdu\bill 6.doc
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1027
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1031
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BILL
No.34-17
1034
1035
1036
1037
1038
1039
1040
1041
1042
1043
1044
1045
1046
1047
1048
1049
1050
1051
1052
1053
1054
1055
1056
1057
1058
1059
1060
(b)
abuse, or insufficient maintenance. Any personal property transferred
in connection with the resale of an MPDU must be sold at its fair market
value.
[In
calculating the allowable resale price of an MPDU which
was originally offered for rent, the Depart ment must estimate the price
for which the unit would have been sold if the unit had been offered for
sale when it was first rented.] The Executive must establish procedures
for calculating the allowable resale price of an MPDU under this
subsection
by
method
ill
regulation.
Resale requirements during the control period.
(1)
Any MPDU offered for resale during the control period must first
be offered exclusively for 60 days to the Depart ment and the
Commission, in that order. The Department or the Commi ssion
may buy a unit when funds are available. The Department may
buy a unit when the Directo r finds that the Department's or a
designated agency or corpora tion's buying and reselling the unit
will increase opportunities for eligible [persons] households to
buy the unit. If the Depart ment or the Commission does not buy
the unit, the Department must notify eligible
[persons]
households of the availability of a resale MPDU. The unit may be
sold through either of the following methods:
(A)
The Department may [by lottery] establish a priority order
under which eligible [persons] households who express
interest in buying the unit may buy it at the approved
resale price.
(B)
The Department may notify the MPDU owner that the
owner may sell the unit directly to any eligible [person]
household under the resale provisions of this Chapter.
G
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BILL
No.34-17
1061
1062
1063
1064
1065
1066
1067
1068
1069
1070
1071
1072
1073
1074
1075
1076
1077
1078
1079
1080
1081
1082
1083
1084
1085
1086
(c)
(2)
A resale l\1PDU may be offered for sale to the general public
only after:
(A)
the priority marketing period expires; and
all eligible [persons] households who express an interest in
buying it have been given an opportunity to do so.
(B)
(3)
The Executive by regulation may adopt requirements for reselling
l\1PDUs. The regulations may require a seller to submit to the
Department for approval:
(A)
a copy of the proposed sales contract, including a list and
the price of any personal property included in the sale;
(B)
(C)
a signed copy of the settlement sheet; and
an affidavit signed by the seller and buyer attesting to the
accuracy of all documents and conditions of the sale.
(4)
A transfer of an l\1PDU does not comply with this Chapter until
all required documents and affidavits have been submitted to and
approved by the Department.
First sale qfter control period ends.
(1)
If an l\1PDU originally offered for sale or rent after March 21,
1989, is sold or resold after its control period ends, upon the first
sale of the unit the seller must pay to the Housing Initiative Fund
one-half of the excess of the total resale price over the sum of the
following:
(A)
(B)
The original selling price;
A percentage of the unit's original selling price equal to the
increase in the cost of living since the unit was first sold, as
determined by the Consumer Price Index;
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BILL
No.34-17
1087
1088
1089
1090
1091
1092
1093
1094
1095
1096
1097
1098
1099
1100
1101
1102
1103
1104
l105
1106
1107
1108
1109
1110
1111
1112
1113
(C)
[The fair market value of] An allowance for capital
improvements made to the unit between the date of
original sale and the date of resale; and
(D)
A reasonable sales commission.
The Director must adjust the amount paid into the fund in each case so
that the seller retains at least $10,000 of the excess of the resale price
over the sum of the items in (A)--(D).
(2)
The Director must find that the price and terms of a sale covered
by subsection (c)(1) are bona fide and accurately reflect the entire
transaction between the parties so that the full amou nt required
unde r subsection (c)(1) is paid to the fund. When the Director
finds that the amount due the fund is accurate and the Department
of Finance receives the amou nt due, the Department must
terminate the MPD U controls and execute a release of the
restrictive covenants.
(3)
The Department and the Commission, in that order, may buy an
MPD U at any time during the control period, and may resell the
unit to an eligible [person] household.
A resale by the
Department or Commission starts a new control period.
[(4)
The Commission and any partnership in which the Commission
is a general partner need not pay into the Housing Initiative Fund
any portion of the resale price of any MPDU that it sells.]
(d)
Initial and later rent controls.
Unless previously sold under subsection
(c)(l) , MPD Us built or offer ed for rent under this Chapter must not be
rented for 99 years after the original rental at a rent greater than that
established by Executive regulations. Any MPD U (other than those
built, sold, or rented under any federal, state, or local progr am offered
0
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BILL
No.34-17
1114
1115
1116
1117
1118
1119
1120
1121
1122
1123
1124
1125
1126
1127
1128
1129
1130
1131
1132
1133
1134
1135
1136
1137
1138
1139
by the Commission) offered for rent during the control perio d must be
offered exclusively for 60 days to one or more eligible [persons]
households, as determined by the Department, for use as that person's
residence, and to the Commission. The Commission may assign its right
to rent such units to persons of low or moderate income who are eligible
for assistance under any federal, state, or local progr am identified in
Executive regulations.
(e)
Foreclosure or other court-ordered sales.
If
an MPD U is sold throu gh a
foreclosure or other court-ordered sale, a payment must be made to the
Housing Initiative Fund as follows:
(1)
If
the sale occurs during the control period, any amou nt of the
foreclosure sale price whic h exceeds the total of the approved
resale price under subsection (a), reasonable foreclosure costs,
and liens filed unde r the Maryland Contract Lien Act, must be
paid to the Housing Initiative Fund.
If
the remaining balance
under the original first deed of trust or mortgage exceeds the
resale price unde r subsection (a), then the difference betw een the
foreclosure sales price and the balance of the original first deed of
trust (plus reasonable foreclosure costs) must be paid to the Fund.
(2)
If the sale occurs after the control period, and the unit was
originally offered for sale or rent after Marc h 20, 1989, the
paym ent to the Fund must be calculated under subsection (c).
(3)
If
the MPD U is a rental unit, the resale price unde r subsections
(a) and (c) must be calculated [using the maximum sales price in
effect when the unit was originally offered for rent] as provided
in regulation.
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BILL
N0.34-17
1140
1141
1142
1143
1144
1145
1146
1147
1148
1149
1150
1151
1152
1153
1154
1155
1156
1157
1158
(4)
If the MPDU is sold subject to senior liens, the lien balances must
be included in calculating the sale price.
All MPDU covenants must be released after the required payment is
made into the Housing Initiative Fund.
(f)
Waivers.
The Director may waive the restrictions on the resale and re-
rental prices for MPDU s if the Director finds that the restrictions
conflict with regulations of federal or state housing programs and thus
prevent eligible [persons] households from buying or renting units
under the MPDU program.
(g)
Bulk transfers.
This section does not prohibit the bulk transfer or sale of
all or some of the sale or rental MPDUs in a subdivision within 30 years
after the original rental or offering for sale if the buyer is bound by all
covenants and controls on the MPDUs.
(h)
Compliance.
The County Executive must adopt regulations to promote
compliance with this section and prevent practices that evade controls
on rents and sales of MPDUs.
*
25A-12. Annual report.
*
*
Each year by March 15 the Director must report to the Executive and Council,
for the previous calendar year:
(a)
(b)
the number ofMP DUs approved and built;
each alternative payment agreement approved under Section 25A-5A or
alternative location agreement approved under Section 25A-5B, and the
location and number ofMP DUs that were involved in each agreement;
(
c)
1159
1160
1161
1162
1163
1164
1165
1166
[each approval of a different rent for a high-rise rental unit under
Section 25A-7(b)(l)] each land transfer completed under Section 25A-
~;an d
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BILL N0.34-1 7
1167
1168
1169
(d)
the use of all funds in the Housing Initiative Fund that were received as
a payment under Section 25A-5A.
*
*
*
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LEGISLATIVE REQUEST REPORT
Bill 34-17
Housing- Moderately Priced Dwelling Units (MP DUs) -Amendments
DESCRIPTION:
The Bill would: clarify existing provisions of the law; require
developments ofless than 20 homes to make a payment to the Housing
Initiative Fund; broaden the authority of the Director of the
Department of Housing and Community Affairs to accept payments
into the Housing Initiative Fund in lieu of including MPDUs in a
development, when it serves the goal of increasing the availability of
affordable housing; and increase the flexibility of the Director in
determining MPDU obligations to better serve the demands for
affordable units.
Despite the County having a longstanding law requiring the
construction of affordable housing with new residential development,
the County's supply of affordable housing continues to lag demand.
Increase the efficiency of the existing MPDU program to increase the
availability of affordable housing and improve the process of making
it available to families who need it.
Department of Housing and Community Development
To be requested.
To be requested.
To be requested.
To be researched.
Josh Hamlin, Legislative Attorney, 240-777-7892
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
NIA
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Bill 34-17: substant ive revisions to Chapter 25A, Housin g- Modera tely Priced
.~i~.~l~!i
ltll I
1
62-125
155-176
180-184, 236-240,
251-253
270-287
292-294
295-297
298
312-323
340
348-352
354-357
364-371, 380-381,
Table on pp. 16-17
381-384
401-404
4161 418-419
420-472
507-509
526-527
Delete requirement that written MPDU agreement be submitted
with the application for a permit
(it is still
required1 iust not at the time of permit application).
Delete MPDU agreement requirement that one-bedroom MPDUs not exceed the ratio of one-bedroom market
rate units
Permit the Director to approve an MPDU agreement that is based on the floor area or square footage of required
units1but alters the bedroom mix of units or number of units.
Add language to clarify that the Council may adjust the base requirement for MPDUs from 12.5% to 15% as
art of a master plan approval. County-wide base requirement will remain at 12.5%.
Add requirement that to receive density bonus, applicant must provide at least one more MPDU than would
have been required if there was no density bonus.
Require that, when the Director allows fewer or no MPDUs to be built in a development with more than 20
but fewer than 50 units at one location, the applicant must make a payment to the Housing Initiative Fund, as
rnvided by regulation1 based on the square footage ofMPDU units that would otherwise have been required.
Clarify references to §25A-5A and §25A-5B
Modify language to allow DHCA Director to accept a land transfer if its value is equal to the value of the
MPDU that are not constructed.
Require MPDU agreement provide for any requirement of age-restricted units to be offered for sale to be
satisfied by a payment to the Housing Initiative Fund under Section 25A-5A(b,.
Prohibit an applicant from establishing a condominium or homeowners' association consisting solely of
MPDUs.
@
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567-586
587-595
596-609
607-609
614-623
635-667
676-732
733-758
769-825, 830, 956-
1012
775-778
822-825
852-859, 1054
1021, 1029-103 2
1165-116 6
Delete reference to Alternative Review Committee and provide that the Director may enter an alternative
payment agreement upon making certain findings.
Delete Code requirements for calculating alternative payments and provide that the payments must be
calculated as provided in method
(1)
regulation.
Update references to County Growth Policy and provide that payments to the HIF may be used outside the
Policy Area for which the payment was made only after: (A) notice is provided to the Council; and (B) the
Council is given at least 30 days to comment.
Delete prohibition on alternative payment agreements for developments where the applicant receives a density
bonus.
Add requirement that acceptance of alternative payment will increase the number of MPDUs provided as a
result of the development.
Delete prohibitions for granting a waiver of MPDU requirements - alternative payment agreements must be
used when not constructing otherwise-required MPDUs.
Simplify criteria for MPDU sale price regulations
Simplify criteria for MPDU rent regulations
Flip subsections on priority offering for HOC and non-profits and public offering to clarify that priority
offering is first.
Allow assignment of the purchase/rental option, held by certain government agencies or nonprofit
corporations, to clients of the Departme nt of Health and Human Services
Require that any unit purchased under §25A-8(a) that is offered for sale within five years after initial purchase
first be offered for sale to the Departme nt in accordance with Executive regulation.
Eliminate references to lottery as a method of administering MPDU offerings
Resale within control period: change permitted increase over original sale price for improvements made to
unit from "fair market value of improvements made" to an allowance, excluding the value of improvements
determined to be unnecessary for the maintenan ce and upkeep of the unit.
Annual Report: require report to include each land transfer complete in the subject year.
®
2
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Agenda Item 15A
December 5, 2017
Public Hearing
MEMORAND UM
December
1,
2017
TO:
County Council
_$
~
..
FROM:
Josh Hamlin, Legislative AttomeT'J
SUBJECT:
Public Hearing:
Bill 34-17, Housing - Moderately Priced Dwelling Units
(MPDUs)-Amendm ents
Bill 34-17, Housing - Moderately Priced Dwelling Units (MPDU s) - Amendments,
sponsored by Lead Sponsor Councilmember Floreen and Co-Sponsor Councilmember Rice, was
introduced on October 31. A Planning, Housing and Economic Development Committee
worksession will be scheduled at a later date.
Bill 34-17 would:
clarify certain provisions of law related to moderately priced dwelling units
(MPDUs);
amend certain provisions oflaw related to the satisfaction of MPDU requirements;
and
amend certain provisions of law related to the sale and rental ofMPDUs
Background
The Council enacted the County's Moderately Priced Dwelling Unit (MPDU) law in 1973
with several objectives. The law was aimed at furthering the objective of providing a full range of
housing choices for all incomes, ages and household sizes. In particular, the law imposed
requirements on the construction of affordable housing to meet the existing and anticipated needs
for low and moderate-income housing, and ensure that moderately priced housing was dispersed
throughout the County. It provided incentives to encourage the construction of moderately priced
housing by allowing optional increases in density including the MPDU density bonus to offset the
cost of construction.
The most recent substantial amendments to the MPDU law were made in 2004.
1
The 2004
amendments extended the control period for for-sale MPDUs from 10 to 30 years, and for rental
MPDUs from 20 years to 99 years. The amendments also allowed different income eligibility
1
http://www.montgomervcountymd.gov/COUNCIL/Resourcesifiles;bill
1
2003/24-04-25-04-27-03.pdf
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standards in recognition of the higher cost of construction of certain types of housing, and
increased the number of developments required to provide MPDUs by lowering the base
requirement from any development with 35 or more units to 20 or more units. Additional
requirements and structure on the approval alternative payments made to the Housing Initiative
Fund in lieu of constructing MPDUs were also added. In 2007, the Office of Legislative Oversight
issued Report No. 2007-9, A Study of Moderately Priced Dwelling Unit Program Implementation.
2
Key components of Bill 34-17 include: clarification of existing provisions of the law;
requiring developments of less than 20 homes to make a paymen t to the Housing Initiative Fund;
broadening the authority of the Director of the Department of Housing and Community Affairs to
accept paymen ts into the Housing Initiative Fund in lieu of including MPDUs in a development,
when it serves the goal of increasing the availability of affordable housing; and increasing the
flexibility of the Director in determining MPDU obligations to better serve the demands for
affordable units. A table showing the specific changes to existing law included in the
Bill
is at
©49-50.
This packet contains:
Bill 34-17
Legislative Request Report
Table of proposed changes to existing law
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Circle#
1
48
49
2
https://www.montgomervcountvmd.gov loloiresources/files/7007-9-mpdu.pdf
2
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Bill No.
34-17
Concerning: Housing
Moderately
Priced Dwelling Units (MPDUs} -
Amendments
Revised:
10/31/2017
Draft No. 6
Introduced:
October
31. 2017
Expires:
May
1. 2019
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: ----=-=N=on=e=-- ------
Ch. _ _ , Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Councilmember Floreen
Co-Sponsor: Councilmember Rice
AN ACT
to:
(1) clarify certain provisions of law related to moderately priced dwelling units
(MPDUs);
(2) amend certain provisions oflaw related to the satisfaction ofMPDU requirements;
(3) amend certain provisions of law related to the sale and rental of MPDUs; and
(4) generally amend the laws governing moderately priced housing
By amending
Montgomery County Code
Chapter 25A, Housing - Moderately Priced
Sections 25A-l, 25A-2, 25A-3, 25A-4, 25A-5, 25A-5A, 25A-5B, 25A-6, 25A-7, 25A-8,
25A-9,
and
25A-12
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.34-17
1
2
3
Sec 1. Sections 25A-1, 25A-2, 25A-3, 25A-4, 25A-5, 25A-5A, 25A-5B,
25A-6, 25A-7, 25A-8, 25A-9, and 25A-12 are amended as follows:
25A-1. Legislative findings.
[The County Council hereby finds that a severe housing problem exists within
the County with respect to the supply of housing relative to the need for housing for
residents with low and moderate incomes. Specifically, the County Council finds
that:
(1)
The County is expenencmg a rapid increase in residents of or
approaching retirement age, with consequent fixed or reduced incomes;
young adults of modest means forming new households; government
employees in moderate income ranges; and mercantile and service
personnel needed to serve the expanding industrial base and population
growth of the County;
(2)
A rising influx of residents into higher priced housing in the County
with resultant demands for public utilities, governmental services, and
retail and service businesses has created an increased need for housing
for persons of low and moderate income who are employed in the stated
capacities;
(3)
The supply of moderately priced housing was inadequate in the mid-
1960's and has grown since then at a radically slower pace than the
demand for such housing;
(
4)
4
5
6
7
8
9
1
o
11
12
13
14
15
16
17
18
19
20
21
22
23
The inadequate supply of housing in the County for persons of low and
moderate income results in large-scale commuting from outside the
County to places of employment within the County, thereby overtaxing
existing roads and transportation facilities, significantly contributing to
air and noise pollution, and engendering greater than normal personnel
turnover in the businesses, industry and public agencies of the County,
f:\law\bills\1734 mpdu\bill 6.doc
24
25
26
27
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BILL No.34-17
28
29
30
all adversely affecting the health, safety and welfare of and resulting in
an added financial burden on the citizens of the County;
(5)
A careful study of market demands shows that approximately one-third
of the new labor force in the County for the foreseeable future will
require moderately priced dwelling units;
(6)
Demographic analyses indicate that public policies which permit
exclusively high-priced housing development discriminate against
young families, retired and elderly persons, single adults, female heads
of households, and minority households; and such policies produce the
undesirable and unacceptable effects of exclusionary zoning, thus
failing to implement the Montgomery County housing policy and the
housing goal of the general plan for the County;
(7)
Experience indicates that the continuing high level of demand for more
luxurious housing, with a higher profit potential, discourages developers
from offering a more diversified range of housing; and the production of
moderately priced housing is further deterred by the high cost of land,
materials, and labor;
(8)
Actual production experience in the County indicates that if land costs
can be reduced, houses of more modest size and fewer amenities can be
built to be sold at a profit in view of the existing ready market for such
housing;
(9)
Every indication is that, given the proper incentive, the private sector is
best equipped and possesses the necessary resources and expertise
required to provide the type of moderately priced housing needed in the
County;
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
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BILLN0.34-17
53
54
55
56
(10) Rapid regional growth and a strong housing demand have combined to
make land and construction costs very high and to have an effect on the
used housing market by causing a rise in the prices of those units;
(11) In past years efforts have been made to encourage moderately priced
housing construction through zoning incentives permitting greater
density and through relaxation of some building and subdivision
regulations. Very little moderately priced housing had resulted; and
(12)
57
58
59
60
61
62
63
64
65
66
In some instances existing housing for persons of low and moderate
income is substandard and overcrowded.]
@}
The County enacted the Moderately Priced Dwelling Unit (MPDU) law
in 1973 to:
ill
ill
ill
help meet the goal of providing
~
full range of housing choices
for all incomes, ages and household sizes;
meet the existing and anticipated need for low and moderate-
income housing;
ensure that that moderately priced housing is dispersed
throughout the County consistent with the General Plan and area
master plans; and
67
68
69
70
71
ill
encourage the construction of moderately priced housing
!2y
allowing optional increases in density including the MPDU
density bonus to offset the cost of construction.
72
73
74
Di}
In 2004, the County Council amended the MPDU program to:
75
76
77
78
ill
Reduce the loss of MPDUs
by
extending the control period for
for-sale MPDUs from 10 years to 30 years and for rental MPDUs
from 20 years to 99 years;
ill
Allow different income eligibility standards in recognition of the
higher cost of construction of certain~ of housing;
79
0
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BILL No.34-17
80
81
82
83
ill
Increase the number of developments required to provide
MPDUs
.!2y
lowering the base requirement from any development
with 3 5 or more units to 20 or more units; and
.(±}
Place additional requirements and structure on the approval of an
alternative payment made to the Housing Initiative Fund in place
of providing MPDUs.
84
85
86
87
.{£2
In 201 7, the County Council finds that:
ill
ill
The availability of affordable housing continues to be
~
problem
for low and moderate income households.
The 2015 report "The Greater Washington Region's Housing
Needs 2023" projects that Montgomery County will need 14,960
new housing units for households earning less than 80% of area
median income.
88
89
90
91
92
93
ill
The 2017 Montgomery County Rental Housing Study reports that
68% of households with incomes between 50% and 80% of area
median income report paying more than 30% of income for rent
and 15% report being extremely rent burdened, paying more than
50% of
for rent.
- - -
income
- - -
94
95
96
97
98
99
100
101
ill
The creation of income-restricted affordable housing through
construction and preservation is critical as market rents continue
to increase. The American Community Survey reports that there
were 9,189 fewer rental units with rents between $750 and
$1,499 from 2010 to 2014.
102
103
104
ill
MPDUs are one important element for providing income-
restricted affordable housing.
There were 681 new MPDUs
105
106
offered for sale or rent in 2015 and 2016.
As
of 2017 there are
about 5,300 MPDUs county-wide.
0
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BILL
No.34-17
107
108
109
110
111
112
.(fil
Additional density can offset the cost of constructing MPDUs. It
is appropriate to consider different base requirements for MPDUs
in conjunction with the approval of different densities and heights
in master plans and sector plans.
ill
There is unmet demand for MPDUs with two, three, and four
bedrooms. Providing flexibility that allows MPDU agreements
based on floor area or square footage, rather than requirements
based on the number of bedrooms in market rate units, can help
to address this need.
113
114
115
116
117
.{fil
Appropriate alternative payments to the Housing Initiative Fund
can, in certain circumstances, be used to create more MPDUs in
the same Policy Area than providing the MPDUs on site.
118
119
120
121
.(22
Montgomery County is committed to its policy of providing
affordable housing in all areas of the County to provide
opportunity to households of all incomes in each Policy Area.
122
123
124
125
{1Q}
MPDUs can be used in partnership with other housing supports to
provide affordable housing to households with very low incomes
such as those with incomes below 50% or 30% of area median
mcome.
126
127
25A-2. Declaration of public policy.
The County Council hereby declares it to be the public policy of the County
to:
[(1)
Implement the Montgomery County housing policy and the general plan
goal of providing for a full range of housing choices, conveniently
located in a suitable living environment, for all incomes, ages and
family sizes;
128
129
130
131
132
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BILL
No.34-17
133
134
135
13 6
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
(2)
Provide for low- and moderate-income housing to meet existing and
anticipated future employment needs in the County;
Assure that moderately priced housing is dispersed within the County
consistent with the general plan and area master plans;
(3)
(4)
Encourage the construction of moderately priced housing by allowing
optional increases in density in order to reduce land costs and the costs
of optional features that may be built into such moderately priced
housing;
(5)
Require that all subdivisions of 35 or more dwelling units include a
minimum number of moderately priced units of varying sizes with
regard to family needs, and encourage subdivisions with fewer than 35
units to do the same;
(
6)
Ensure that private developers constructing moderately priced dwelling
units under this Chapter incur no loss or penalty as a result thereof, and
have reasonable prospects of realizing a profit on such units by virtue of
the MPDU density bonus or public benefit provisions of Chapter 59
and, in certain zones, the optional development standards; and
(7)
Allow developers of residential units in qualified projects more
flexibility to meet the broad objective of building housing that low- and
moderate-income households can afford by letting a developer, under
specified circumstances, comply with this Chapter by contributing to a
County Housing Initiative Fund.]
ill
encourage and maintain
~
wide choice of housing
~
and
neighborhoods for people of all incomes ages, lifestyles, and physical
capabilities at appropriate locations and densities and to implement
policies to bridge housing affordability
~
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