By Adam Pagnucco.
County Executive Marc Elrich appeared on last week’s Politics Hour with Kojo Nnamdi and made news. Most of his conversation with Kojo and analyst Tom Sherwood addressed federal layoffs and his advocacy for higher taxes on commercial property. But Kojo got a scoop when the topic shifted to housing.
First, a relevant note. MoCo has had a Moderately Priced Dwelling Unit (MDPU) program since the 1970s. The program requires many housing development projects to offer rental or owned units affordable to people making up to 70% of the area median income. The percentage of MPDUs required in new projects varies between 12.5% and 15% depending on where they are built in the county. MPDUs have been a key tool used by the county to build and preserve affordable housing and to provide mixed housing types in the same projects.
On the Politics Hour, Elrich was asked by a housing advocate about his policies on affordable housing. Following is a partial transcript of his response along with a comment by Sherwood.
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Elrich: If you make less than $60,000, there’s almost nothing for you in the county and an MPDU program doesn’t really cover that. And if you make more than 75 or $80,000, you fall into this black hole where you make too much for an MPDU program but you make too little for what’s being built in the market. So we’re trying to find a space in between. And we’ve got a proposal coming up. The most effective thing you can do is up the requirement. I honestly believe we ought to go from 15% MPDUs to 15% MPDU and 15%…
Sherwood: I’m sorry, I’ve already forgotten what MPDU…
Elrich: 15% Moderately Priced Dwelling Units up to 75,000 with our ability to negotiate less expensive units and then also require 15% between 80% of area median income and 100% of area median income to kind of fill that kind of gap you’re talking about. But that’s government’s role is policies that will, you know, require development to kind of reshape what they build.
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I asked the executive branch to elaborate on the county executive’s comments. County Executive Marc Elrich sent me the following statement.
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I laid out the general idea on the Kojo show. Implementation across the county is more complicated. I’ve asked the Department of Housing and Community Affairs (DHCA) to present a proposal that could implement this goal. Their proposal would significantly revise the County’s Moderately Priced Dwelling Unit (MPDU) program (which has been around for almost 50 years) and expand it to include a wider range of affordability including workforce housing income levels (defined as up to 120% of Area Median Income). As you may know, rent and purchase levels can vary widely across the county so we’re trying to understand the impacts in different areas and how to best tackle affordability, including increasing homeownership.
As I’ve said multiple times, Planning’s attachment to zoning virtually everything high-rise is part of this problem; high-rise construction is expensive and at this point, only works in areas that can charge very high rents, generally the Bethesda area. It produces luxury-level apartments and condos. With rental units, there are the standard MPDUs but if the high rises are condos (for purchase), the condo fees make affordable units virtually impossible. Luxury buildings are not penciling out for developers. We’ve seen in North Bethesda recently two different projects that are moving forward with much lower heights/density because they are delivering what the market will pay for. In one case, we partnered with the developer to expand the affordability beyond the required amount. (Here are the two projects: New plan for North Bethesda housing project focuses on affordability – Bethesda Magazine; Developers may ditch high-rise plans for townhomes in North Bethesda housing project- Bethesda Magazine)
DHCA staff are vetting the proposed changes with a national group of housing experts convened by the Urban Land Institute. They have also been meeting regularly with Council staff to inform them about the proposed MPDU revisions and seek their input on ways to integrate Council goals. DHCA intends to have a proposal for the Council to review after the budget process has been completed.
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Elrich can’t unilaterally establish a new requirement for projects of this kind. He would need the council to pass it. We shall see how the council reacts to any proposal he sends over. We shall see how the real estate industry reacts as well.