Testimony supporting Maryland Housing Impact Fairness Act

November 21, 2019

Montgomery County Council

Council Office Building

100 Maryland Ave.

Rockville, MD 20850

Bill 34-19, Taxation – Development Impact Taxes – Affordable Housing – Housing Impact Fairness Act (Support)

Testimony for December 3, 2019

Kimberly Golden Brandt, Director, Smart Growth Maryland

Jane Lyons, Maryland Advocacy Manager, Coalition for Smarter Growth

President Navarro and Councilmembers, thank you for the opportunity to speak today. My name is Kim Golden Brandt, Director of Smart Growth Maryland, which advocates for a more environmentally and economically sustainable future that creates opportunities for all Marylanders through better development patterns. I am also speaking on behalf of the Coalition for Smarter Growth, the leading organization in the D.C. region advocating for walkable, inclusive, transit-oriented communities. 

First, thank you to the Council for your support of affordable housing, shown through your continued investment in the Housing Initiative Fund and recent adoption of the Council of Government’s housing targets. In addition to the legislation before us this evening, we welcome additional proposals that will help get the HIF to the $100 million per year goal and help double housing production to meet the COG targets.

We support the Housing Impact Fairness Act, given the existing and growing need for both affordable housing and school construction funding. This legislation ensures that all new construction contributes for its impact. 

For example, there was a $575,000 home from 1953 on Dickens Avenue in Bethesda. It was torn down and replaced with a 4,891 square foot, $1.425 million home. When this happens again and again in a neighborhood, middle-class households are replaced by wealthier households. Teardowns can lead to neighborhoods becoming more exclusionary over time, especially when “middle” housing types are missing.

On average, the additional impact fees would result in a newly rebuilt home costing $1.8 million instead of $1.75 million. As with all taxes, this is a statement of values. The HIF portion of the impact tax from just this one teardown would go a long way to helping provide affordable housing, for example, more than covering the rent of two very low-income families for over a year. Or it would meaningfully contribute to more room in our schools for students. For homes built after 1986, we’ve already made that value judgement to support these goals.

In addition to our support of the bill, we also offer the following amendments and considerations. First, to ensure that this proposal will be a net gain in revenue over time, we welcome additional economic analysis. The recordation tax and increased property taxes that come from teardowns also go towards affordable housing, school construction, and other investments.

Next, we recognize that some neighborhoods, especially those with older structures, need investment including improved housing stock, and that teardowns can offer that needed investment. Therefore, we welcome an amendment that exempts blighted or condemned properties.

Finally, we ask the PHED committee to strongly consider exempting properties if an additional living unit is provided. This policy could be modeled after Portland’s residential infill project. Replacing one home with another does nothing to address the county’s housing shortage. If we do not build enough homes to address demand, then older homes will just continue to become more and more unaffordable.

Thank you for your time.