Montgomery County lawmakers plan to revive a bill that would exempt residential developers from paying development taxes on a property or subdivision if at least a quarter of the apartments or houses meet affordable-housing guidelines.
Under current law, between 12.5 percent and 15 percent of the units in an apartment building or subdivision that has 20 or more units are required to be affordable housing. Housing is considered affordable when rent or mortgage payments account for about a third of the gross income of a household earning up to 120 percent of the median income.
But the current requirements aren't resulting in sufficient affordable housing, "and we're putting a lot of public money into subsidizing this," said the bill's lead sponsor, Councilwoman Nancy Floreen, D-at large.
Unlike other subsidies, the bill would not cost taxpayers anything, Floreen said. "It's not money out of the public's pocket, it's just money that the government might not receive. The glass is half-full, the way I look at it."
But if passed, the measure could cost the cash-strapped county as much as $56.8 million in lost funds for school and transportation construction projects, based on major rental housing projects that are already in the works, according to an analysis by the county's Office of Management and Budget and Department of Finance. Looking at planned projects in the Great Seneca Science Corridor, White Flint and Shady Grove, the analysis found the bill could cost the county an average $89,449 for each affordable-housing unit that results if developers in those areas decide to take advantage of the measure
The bill's sponsors question whether that analysis is accurate, though.
"We asked them to give us some updated numbers," said Councilman Craig Rice, D-Germantown, and a bill sponsor, "because we said there's no way that's possible."
But OMB Director Jennifer Hughes and Finance Director Joe Beach stand by their analysis.
"At this point, we don't have any reason to doubt the fiscal impact statement," Beach said.
If they are right, taking away money from school and transportation projects could be a problem, because there are already more projects in the pipeline than there are funds to pay for them, Hughes said.
The county's waiting list of transportation projects alone would cost several hundred million dollars to build, The Washington Examiner has previously reported, and both school and transportation projects have had to be postponed over the last several years due to budget constraints.
"Any diminuation of dollars is an issue," Hughes said.