Yesterday the County Council unanimously voted to approve the 38-17 “Moderately Priced Dwelling Units, Requirement to Build”. Commonwealth reported on Bill 38-17 last winter and noted that it was a decent attempt at a sort of Rawlsian redistribution of wealth policy. But there is still much that needs to be done to address the lack of affordable housing in the county.
A few reminders to readers of the details of 38-17: The County’s Inclusionary Zoning (IZ) policy mandates developers set aside at least 12.5% of the units in their projects to be “affordable,” rather than priced at market rates, this is referred to as Moderately Priced Dwelling Units (MPDUs). The new legislation would require areas where 45% of household income is at or above 150% of the average county median household income to increase that required minimum of MPDUs to 15%.
This would lead to more affordable housing in areas of the county like District 1, 2, and 3 which are more wealthy than eastern parts of the county and generally has less MPDUs. The developers will get the same density bonuses, but it looks like that is the only thing they’ll get after this new regulation. In fact, the lack of additional incentives was a grievance developer lobbyists include in their testimony on the bill.
Under the current political-economic situation, where the local housing market does legitimately have a lack of housing stock across multiple income levels and locations, raising the required MPDU percentage is a positive change. A 2017 study commissioned by the Montgomery County Department of Housing and Community Affairs suggested raising the existing 12.5% MPDU requirement to 15% everywhere (not just in high-income areas) among many other proposals for more affordable units. So this could also be a path towards a county-wide uptick in the required number of affordable units that get built.
But there are some figures on the County Council who abhorred the government taking steps to require capitalists to build housing across the spectrum of income levels. Councilmember Nancy Floreen, who is running an independent campaign for County Executive at the behest of her developer donors, doesn’t like the bill. She made this very clear when 38-17 was brought before the Planning, Housing, and Economic Development Committee by being the only member of the committee to vote against a plan for providing more affordable housing.
Floreen again testified against the bill before yesterday’s unanimous vote. The bill’s sponsor Hans Reimer may be a neoliberal, but in this scenario, Nancy Floreen is an outright Reaganite. Readers who have the time to should listen to her testimony yesterday or in PHED committee hearing from June 18. Her talking points are all from the business community.
Some select Nancy Floreen quotes from yesterday’s hearing: “At the end of the day we want more MPDUs in more locations but [our emphasis] the extent to which we make building MPDUs more expensive we’ll have fewer units.” Another, “Will [Bill 38-17] incenti— will it produce more affordable units or will costs rise?” And finally, a clear case of her anti-government and pro-free market bias, “Having more rules doesn’t get you more of what you want.”
In the first quote, she’s ignoring certain ways developers can offset additional affordable units with higher priced market-rate units (or vice versa). Additionally, the 2017 study linked to above claimed raising the MPDU percentage will only result in a brief “cooling” of construction until the market can incorporate the adjustment (which it has done ever since the program was started in the 70s).
In the second quote, she nearly says “will [Bill 38-17] incentivize more MPDUs” but she stops herself short, most likely because this is nearly word-for-word what the lobbyist for the Maryland Building Industry Association (MBIA) complained about in their testimony — lack of incentives being given in return for higher MPDUs (circle 20 of the legislative packet).
Nancy Floreen’s preferred route to MPDUs is to continue the status quo. The Council may require higher MPDU requirements for particular areas on a case by case basis during the debate on area Master Plans. But this leads to uneven development and more opportunities for rich communities to lobby against higher MPDU requirements in their neighborhoods. Floreen’s resentfully voted “yes” to 38-17 over her Reaganite concerns only because her opponent for County Executive Marc Elrich could otherwise have attacked her as being anti-affordable housing.
There is plenty of room to criticize Inclusionary Zoning, but it certainly isn’t from Nancy Floreen’s developer-influenced perspective. Rather, the left should observe where Inclusionary Zoning isn’t working to meet the needs of residents in places like New York City.
In our own county we have to recognize that the MPDUs this bill will promote still are not affordable enough for the majority of renters. IZ policies still rely on capitalists subsidizing the low income units with luxury units and Montgomery County developers aren’t willing to spend what is necessary to produce deeply affordable units.
As Maryland Building Industry Association lobbyist Sylke Knuppel testified before the County Council, “[Builders and developers] should have a reasonable prospect of realizing a profit on the MPDUs.” Building truly affordable housing for the people isn’t included in the capitalists’ business plans. We stand by our original opinion of Bill 38-17 from last winter — it is a good proposal, but only a shift to a building Social Housing can get Montgomery County residents the affordable housing they need.