By Adam Pagnucco.
Council Member Will Jawando has come out swinging against Bill 2-25, a component of the More Housing N.O.W. package proposed by Council Members Andrew Friedson and Natali Fani-Gonzalez. The bill’s original draft establishes a by-right 25-year payment in lieu of taxes (PILOT), an exemption from property taxes for some development projects converting from commercial to residential use. Eligible projects would need to provide that at least 15% of units be affordable to households earning 60% or less of the area median income for a period of 25 years.
Jawando’s objections center around the fiscal impact statement on the bill, which includes this language:
Assuming the PILOT is provided to qualifying properties for no more than 25 years, Finance estimates the annual decrease in property tax revenues will continue to grow for 25 years from the time the initial projects received the PILOT, after which new PILOTs may replace expired PILOTs and the revenue decrease stabilizes with annual loss of around $230 million in property tax revenue per year, with total loss over that 25-year period of approximately $2.6 billion.
Of course, that assumes that any projects get constructed under the bill. I’m skeptical of the chances of that happening.
In any event, Jawando believes that tax dollars are better spent on schools, public safety and direct subsidies for affordable units rather than a “giveaway” for developers. He put those thoughts in an incendiary video that he released on March 26. Following is the video embed and a transcript.
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We’re entering a tough budget season, working to fund education, transportation, public safety, and other non-negotiables. But a newly proposed bill would give corporate developers in our county a 25-year tax holiday worth $2.6 BILLION if they convert commercial buildings into… pic.twitter.com/5m9vvq2XoQ
— Councilmember Will Jawando (@CMJawando) March 26, 2025
We’re entering budget season here at the Montgomery County Council, and I wanted to talk to you about priorities.
Cost of living is increasing. Families and businesses are stretching every dollar. But right now, there’s a proposal that’s being rushed through the council that will threaten our county’s taxbase for decades to come.
This bill would provide a 25-year tax cut to developers who convert commercial buildings to residential ones.
Now I’m all for that. But this fiscal impact statement from the executive branch that I’m holding in my hand estimates $2.6 billion in lost revenue over that 25 year period. You heard that right, 2.6 billion, with a B.
So while everyday families and small businesses are scraping by to pay their property taxes and to afford rent, corporate developers would be off the hook for nearly a quarter-century!
I have always been one of the fiercest advocates for affordable housing. But this isn’t going to deliver nearly enough affordable units to justify the billions that we’d lose. Billions that should be funding our schools, fixing our roads, improving public safety, and efficiently investing through our nationally-recognized Housing Production Fund.
To make matters worse, there is nothing stopping developers who have current approved projects in the pipeline from changing their schedule to take advantage of this exemption. That’s a raw deal for the county – but it’s even a worse deal for you, the taxpayer.
We can already give deals on a case-by-case basis. Passing this bill would be like going to a poker game, shoving your chips in the middle of the table and then showing your cards to everyone you’re playing against.
We have a long history in this county of partnering with local developers but a blanket, one-size-fits-all approach in a giveaway isn’t the right approach – especially not now, when so many people are struggling in a tough budget season.
I’m asking my colleagues to withdraw this aspect of the broader housing proposal and I’m asking you to get involved. If you’re as worried as I am about this giveaway, call and email your council members. Tune in to the Government Operations and Economic Development Committee work session this Thursday, March 27th.
Oddly enough, I’m the only housing committee member who opposes this tax giveaway and the only one who won’t get a vote at this crucial stage in committee. So I am making this video so you’re aware and to share my view with you in the hopes that you’ll get engaged.