major housing programs in montgomery county md
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MAJOR HOUSING PROGRAMS IN MONTGOMERY COUNTY MD. Presented by Elizabeth B Davison Department of Housing and Community Affairs. Montgomery County Known for Innovative Housing Programs. Moderately Priced Dwelling Unit Ordinance Condominium Conversion laws - PowerPoint PPT PresentationTRANSCRIPT
MAJOR HOUSING PROGRAMS IN MONTGOMERY COUNTY MD
Presented byElizabeth B DavisonDepartment of Housing and Community Affairs
Montgomery County Known for Innovative Housing Programs
Moderately Priced Dwelling Unit Ordinance Condominium Conversion laws Right of First Refusal on Sale of Multifamily
Housing Housing Initiative Fund
Moderate Priced Dwelling Unit Program
The Moderate Priced Dwelling Unit Program In Brief
Priced to be affordable to moderate income households Required in subdivisions of 20 units or more Enacted in 1974, produced 11,700 housing units An “inclusionary zoning” technique – Allow density bonuses above the base zone MPDU sales prices controlled for 30 years; MPDU rents controlled for 99 years County and the owner split the “windfall” profit after control period The first inclusionary zoning program in the country
Montgomery County, Maryland
Montgomery County, MarylandModerately Priced Dwelling Unit (MPDU) ProgramBackground – Demographics (2000 Census):
Montgomery County, Maryland
People
Total Population 873,341
Estimate (7/1/2004) 921,690
Under age 18 25.4 %
Over age 65 11.2 %
White 73.6 %
Black 15.1 %
Asian 11.3 %
Hispanic (all races) 11.5 %
Median Income (2005) $89,300
Housing
Total households 324,565
Single-family detached 51.2 %
Single-family attached 17.9 %
Multi-family 30.7 %
Owner Occupied 68.7 %
Renter Occupied 31.3 %
A relatively diverse, higher income population with children
Montgomery County, Maryland
Background - Current housing situation:2004 Median Housing Sales Price
New
ResaleSF Detached $666,540 $450,000SF Attached $427,501 $283,500 All Single Family $395,000
Average Rent (2004) HUD/FMR (2004)Efficiency $ 887 $ 9131-BR $1,027 $1,0392-BR $1,211 $1,2183-BR $1,526 $1,660
HUD limit for family of four (2005) @ 50% of median…………$44,650
Montgomery County, Maryland
Legislative History of MPDU Program in Early 1970’s
Civic pressure from Fair Housing advocates and the League of Women Voters
A concept to have builders supply a percentage of houses in each development that would be “affordable”
Issues: “Taking” of property Successful economic integration of neighborhoods “Marketing” developments with mixed incomes The economic impact of affordable units on housing values Density bonuses undermining “pristine” zoning practices
Montgomery County, Maryland
The Moderately Priced Dwelling Unit Ordinance : Goals and Implementation
Goals of the MPDU Program:
Distribute low and moderate income households throughout the County
Expand inventory of low and moderate -income housing for the County
Housing authority and nonprofits to retain long term ownership of affordable units
Funds future affordable housing by sharing windfall appreciation.
Implementing the MPDU Goals:
Partnership with developers:Density bonus (22%) to off-set land and other costs.
Apply MPDU requirement county-wide to achieve distribution of MPDUs in every community.
Off-set expiration of MPDU inventory by purchase of portion of units by Housing Authority or non profits.
Dedicating shared profits from sales after price controls to the County’s housing trust fund.
Montgomery County, Maryland
Montgomery County, MarylandModerately Priced Dwelling Unit (MPDU) Program
The public policies underpinning the law include: Providing a full range of housing choices Provide affordable housing to meet employment needs Disperse affordable housing throughout the county Allow increased densities to off-set the additional costs to developers provide flexibility for developers to meet the MPDU requirement
Montgomery County, Maryland
Montgomery County, MarylandModerately Priced Dwelling Unit (MPDU)
Three County Agencies with Responsibility: The Planning Board The Department of Housing and Community Affairs (DHCA) The Department of Permitting Services (DPS)
Montgomery County Government must: administer the zoning and plan approval assure that the project’s MPDU requirements are documented certify consumer eligibility establish agreements with developers on staging establish MPDU pricing oversee the selection of potential buyers through the lottery enforce resale and shared profit restrictions
Profile of ConsumersModerately Priced Dwelling Unit (MPDU) Program
Maximum Income Range: For Sale $44,000 (individual) to $68,000 (family of 5) Rental $40,000 (individual) to $62,000 (family of 5)
Maximum income limits are set at about 65% to 70% of median Average income of purchasers - $32,000 Number of certificate holders - 1,300 MPDU purchasers are:
Employed Hold jobs in the retail and service sectors, often multiple jobs at one time Entry level teachers, firemen and police officers
Montgomery County, Maryland
The Moderately Priced Dwelling Unit Ordinance: What do they look like?
Achieving Compatibility: judge the results by identifying the MPDUs
Montgomery County, Maryland
The Moderately Priced Dwelling Unit Ordinance: Design Compatibility is a Must.
Achieving Compatibility: judge the results by identifying the MPDUs
Montgomery County, Maryland
Market Rate
Market Rate
MPDUs
MPDUs
MPDUs
MPDU duplexes in a single familydetached community.
The Moderately Priced Dwelling Unit Ordinance: Dispersal Throughout the Community
Montgomery County, Maryland
Research & Tech nolog y C enterM-NCPPC, Mo ntgomery C ty.
Key:>1010 - 99100 – 249250 – 499500 – 9991,000 – 1,4991,500 – 1,999>2,000
MPDUs Are Well Dispersed by Policy AreaMPDUs Are Well Dispersed by Policy Areain the Countyin the County
Rural Areas And Clarksburg
BCC
Potomac
FairlandK-W
Olney
Aspen Hill
GaithersburgVicinity
Damascus
Rockville
Silver Spring
Rockville is not part of the County MPDU Program.
Mont. Village
The Moderately Priced Dwelling Unit Ordinance Does it Work? Yes. Is it Perfect? No.
Benefits Housing for needed
workers. Homeownership
opportunities Access to schools and
services Prevents ghettos and
mainstreams low income
Issues Dependent on market rate
new construction Cost in High Rise Large Waiting list Credit issues for
applicants Enforcement of Covenants
Montgomery County, Maryland
Questions and More Info
More Background informatination, forms and regulations:
www.montgomerycountymd.gov/mpdu
Condominium Conversions and Right of First Refusal
Page 2
Condominium Conversions: Back to the Future
Similar to condo craze of late ’70’s early 1980’s New construction of condominiums began a few
years ago as high end rentals became saturated Conversion of high end properties well underway Laws from 1980’s apply but need update
Page 3
Status of Conversions In Montgomery County
19 complexes are in early stages of conversion Represents 3,850 Units Only 3 buildings has gone through conversion
process Half the buildings converting by owner 1 building a tenant sponsored conversion 5 properties created as condominium, but initially
rented, now being sold
Page 5
Several Laws Regulate Conversions
Ch 53 A: Montgomery County Right of First Refusal
Title 11: State of Maryland Condominium Conversion
Ch11A: Montgomery County Condominium Conversion
Ch29: Montgomery County Landlord Tenant Law
Page 6
Right Of First Refusal: 53 A
Gives Right to Certified tenant organization, County, Housing Authority
Must match price and terms
Page 7
Title 11 State of Maryland Condominium Conversion Law
Requires extended tenancies for protected classes up to 20% of units
Allows Local government to extend protections
Defines protected classes as those: - over 62 years of age,– “Handicapped”/ mobility impaired,– Under 80% of median income
Page 8
Ch 11A Montgomery County Condominium Conversion
Extends protections in state law to Lifetime Tenancies:– Over 62 or “handicapped” and– under 80% of median income, and– Tenant for at least 12 months Includes 3 year tenancies for persons with
disabilities, seniors, or any person under 80% median income
Page 9
Other Provisions
Tenants have right of first refusal on their unit HOC and County have Right of first refusal on entire
building, also of up to 20% of the individual units Relocation payments to tenants on a reimbursement
basis up to $750 Priority for extended tenancies by length of
residence in property
The Housing Initiative Fund
A Housing Trust Fund of Local Money Dedicated to Promote Affordable Housing
The Housing Initiative Fund
Adopted As part of the County Code in 1988.
Purpose Establishes a trust fund to promote a broad range of housing opportunities in Montgomery County.
1. Renovating distressed properties.
2. Preserving housing that could be lost from the affordable housing stock.
3. Special needs housing.
4. Helping create mixed-income communities.
5. Making sure that housing programs build neighborhood and not just housing units.
6. Working toward an equitable distribution of affordable housing units.
Goals of the Housing Initiative Fund
Sources of Revenue for the Fund
•Condominium conversion tax•Impact tax
•Property rental•State contributions
General fund: 2.5% of property Tax
Current sources:
•Sale of moderate priced housing•Sale of publicly owned land•Investment income•Loan repayments•Developer payments
Past sources:
The Problem of Uneven Funding:Solved by 2.5% of Property Tax
Housing Initiative FundAnnual Revenue Totals
02,000,0004,000,0006,000,0008,000,000
10,000,00012,000,00014,000,00016,000,00018,000,000
Year
Rev
enue
s in
$
Nominal $Constant $'89
Administration of the Fund
1. Developer submits application to the Department of Housing and Community Affairs.
2.Housing Loan Committee reviews proposal in monthly meeting
3. Presentation to Director for final decision
4. Dispersal of funds to developer if approved
Process for Approval
Factors Considered During the Review Process
Purpose:
Complies with HIF mission Public purpose Neighborhood needNeed for physical improvement
Compatibility:
Project design Land use and zoning Community support
Feasibility/cost:
Financial feasibility and need Leveraging Cost reasonableness Market feasibility Readiness to go forward Availability of support services Development team capacity
For every dollar of local funding spent, the Housing Initiative Fund was able to leverage
seven dollars in resources from private, federal, and state sources.
Important Note:
Case Studies
Preservation: Stewartown Homes ApartmentsProperty: 94 unit complex, one third uninhabitable when acquired by the housing authority. Expiring “236” property.
HIF role: 30 year loan at 1%, with no payments for 17 years and no interest accruing. Rehab costs of $120K/unit. Leverage ratio of County funds: 5.24 to 1.
Goals met by this project:
1. Renovating distressed properties.
2. Preserving housing that could be lost from the affordable housing stock.
3. Making sure that housing programs build neighborhood and not just housing units.
Community Preservation and Development Corp. runs a computer learning center and after school job training at Stewartown Homes Apartments.
Rehabilitation: Montgomery Arms Apartments
Property: Historic 130 unit complex located in downtown Silver Spring built in the 1940s. Owned by the housing authority.
HIF role: $2 million, 30 year loan at 3%, no payments for 6 years, no interest accruing. In 7th year, payment to be based on available cash flow.
Rehabilitation and upgrading underway at Montgomery Arms.
Conditions: 84 units reserved for families and individuals in affordable housing programs. Of these, 10 are “McKinney Act” units for chronically mental ill persons. 46 units leased at market rate.
Goals met by the project:
1. Renovating distressed properties.2. Special needs housing.3. Helping create mixed-income
communities.4. Working toward an equitable
distribution of affordable housing units.
New Construction: Victory TerraceProperty: Former 16-acre school site (surplus), purchased by nonprofit housing developer Victory Housing. Located in Wealthy Potomac
HIF role: Two loans: a land purchase loan to defer payments, with no interest accrual, for 20 years. Predevelopment and development loan will have 1% interest only payments for 5 years, then fully amortized for remaining 35 years. Both loans to be cash flow loans.
Conditions: 72 units with 14 affordable to persons at or below 40% of the area median income, 44 units to persons at or below 60%. Remaining 14 units unrestricted.
Goals met by the project:
1. Special needs housing.
2. Helping create mixed-income communities.
3. Working toward an equitable distribution of affordable housing units.
Transitional Family Housing and Single Room Occupancy: Econolodge makeover
Property: 99 room motel in two buildings.
HIF role: $287,246 towards purchase of the motel by the County. Housing authority to serve as development manager during construction.
Goals Met by the project
• Renovating distressed properties.
• Special needs housing.
• Making sure that housing programs build neighborhood and not just housing units.
Conditions: 40 living units will be created for single adults needing permanent supportive housing and 17 2-bedroom apartments will be created for families needing 3-6 month transitional housing, operated by the Montgomery County Coalition for the Homeless, Inc. under partnership with DHCA and HHS.
Econolodge makeover:
http://www.montgomerycountymd.gov/
For more information, please contact Stephanie Killian, Multifamily Housing Manager
content/hca/Housing/mutifamily-intro.htm