Council approves “More Housing at Metro Stations” legislation

Council enacts the More Housing at Metrorail Stations Act 
New bill creates incentive for housing on Metro station properties; goal is to fight climate change, promote housing affordability and spur economic growth
as regional leaders push to close a housing gap, a solution with regional potential; endorsed by Sierra Club, Coalition for Smarter Growth

ROCKVILLE, Md., Oct. 6, 2020—Today the Council, by a vote of 7-2, enacted Bill 29-20, called the “More Housing at Metrorail Stations Act,” a major new housing initiative supported by the Sierra Club, the Coalition for Smarter Growth and leading housing advocates. Councilmember Will Jawando and Council Vice President Tom Hucker voted against the bill. 

Councilmember Hans Riemer, chair of the Council’s Planning, Housing and Economic Development (PHED) Committee, and Councilmember Andrew Friedson, member of the PHED Committee, were the lead sponsors of Bill 29-20. Councilmembers Evan Glass, Nancy Navarro, Council President Sidney Katz, Councilmember Gabe Albornoz, Council Vice President Tom Hucker and Councilmember Craig Rice were cosponsors.

The bill will make a significant impact on the viability of building new housing on Metro station property. Presently, there are no high-rise developments underway on any Metro station property in Montgomery County, nor have there been for many years.

The legislation will respond to this problem by providing a payment in lieu of taxes (PILOT) for a period of 15 years for new high-rise development that includes at least 50 percent rental housing. The PILOT would exempt 100 percent of the property tax that would otherwise be due for a project constructed on property leased from WMATA at a Metro Station in the County. According to Metro, station properties in the County have the capacity to deliver at least 8,600 units of housing, which would provide a significant contribution to the County’s long-term housing shortage. The high-rise buildings also would include between 1,200 to 1,300 units for the County’s Moderately Priced Dwelling Unit (MPDU) affordable housing set-aside programs. The legislation seeks to change the economics of high-rise Metro station development and deliver the essential housing on top of Metro that the County needs to fight climate change, promote housing affordability and spur economic growth.

“Montgomery County has a lot riding on getting high-rise development going at our Metro stations,” said Councilmember Hans Riemer. “To fight climate change, this is exactly the kind of location where we should have as much housing as possible. To promote economic development, we need new housing and jobs around the station areas, and these high-rise buildings should help catalyze the market. Our housing market is not producing enough new housing and that is creating affordability problems for young and working families and putting rent pressure on market affordable housing. With the potential for more than 8,000 units of housing, these measures should help us take a big stride towards our regional housing goals.”

“This effort is about turning housing targets into actual housing units, making ridership goals actual transit riders, and transforming outdated parking lots into vibrant communities for actual people,” said Councilmember Andrew Friedson. “It’s about building modern, sustainable, inclusive communities in true smart growth fashion. Few things would be more impactful to meeting our affordable housing, environmental and economic development goals than maximizing transit-oriented development at Metro stations.”

The bill was enacted with three amendments added during the Council meeting. The first amendment, proposed by Councilmember Jawando, requires that 25 percent of the moderately priced dwelling units be reserved for individuals with incomes at 50 percent or less of the area median income. The next amendment, proposed by Councilmember Albornoz, mandates that 25 percent of the workers on each project be residents of the County. The last amendment, proposed by Councilmember Friedson, created a Dec. 31, 2032 sunset date for the legislation.

“This legislation is central to the Economic Development Platform that I authored, and the Council adopted during my Council presidency last year,” said Councilmember Nancy Navarro, who also serves as chair of the Government Operations and Fiscal Policy Committee. “This bill seeks to leverage WMATA sites to create additional residential units. As such, it actually touches on two pillars of the Economic Development Platform; the housing pillar, which calls on the Council to find ways to achieve the Metropolitan Washington Council of Governments’ housing targets; and the transportation pillar, as it would provide incentives for developers to construct housing in our activity centers near transit. This bill will help increase ridership in non-automobile transportation modes.”

According to projections by the Metropolitan Washington Council of Governments and the Urban Institute, Montgomery County is expected to become home to more than 60,000 additional households by 2040. Meanwhile, home prices are rising faster than incomes. Moreover in 2018, the Montgomery County Planning Department determined that the County's median household income of $108,188 was below the $125,621 required to afford a home priced at the midpoint.

Montgomery County is not producing nearly enough housing to keep up with demand. Since 2010, the County’s population has grown by approximately 8,000 people per year, but the County has only added about 2,700 new housing units per year. Almost half of the County's 120,000 rental households are cost-burdened, which means that more than one-third of their incomes go to pay for housing.

WMATA does not pay property taxes to Montgomery County. The legislation allows a new development on a Metro station property to retain that property tax exemption for 15 years. The developers would continue to pay impact taxes, and residents living in the housing would pay personal income taxes.

“Ridership on public transportation is at an all-time low because people are concerned about their personal health. Once we have a vaccine for Covid-19, we will once again have to protect the health of our planet, which means more public transportation and less carbon polluting vehicles,” Councilmember Evan Glass said. “Placing more homes near transit isn't just good for housing affordability, it’s also good for the Earth.”

“Incentivizing housing at our Metro stations is a win, win, win all around,” said Councilmember Gabe Albornoz. “Transit oriented development is good for our environment, our economy and our residents who need affordable housing.”

“Sierra Club Montgomery County enthusiastically supports this legislation proposed by Councilmember Riemer to expand housing by metro stations,” said Shruti Bhatnagar, chair of the Montgomery County Chapter of the Sierra Club. "The proposed legislation aligns with Sierra Club priorities to address climate change through smart growth policies focusing on transportation, housing and land use. We need more total housing units in the County, and we can help reduce greenhouse gas by building most (at least 80 percent) of these new housing units within walking distance of transit stations, which also promotes a healthy active lifestyle. Sierra Club recommends making many of these units affordable to help the County move forward in its equity goals.”

“This is a promising approach," said Jane Lyons, Maryland Advocacy Manager for the Coalition for Smarter Growth. “Housing on top of Metro stations is key to meeting housing demand without putting new cars on the road. This strategy will help the county meet its climate, economic development and housing goals.”

The Council staff report can be viewed here.

 

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