As Maryland lawmakers convene for the 2026 General Assembly session, they face a challenging agenda headlined by the affordability of energy and housing. Solutions will be shaped by a revamped House leadership team, limited by a weak economy which is contributing to a $1.5-billion state budget shortfall, and pressured by a looming general election in November.
Maryland residents and businesses are facing increasingly high electricity and natural gas bills due to a convergence of rising demand, increased public utility infrastructure costs, Maryland’s climate-related energy policies, and the regional electricity market structure. The assembly is expected to take up these issues, but realistically, may not have many policy levers to pull that can bring additional capacity online quickly enough to rein in prices.
With a few exceptions, the framework for housing and job growth put in place by local governments in the 1980s has been built out. Lack of land development capacity and persistent anti-growth sentiment in the central Maryland counties has resulted in the failure of housing production to keep pace with population and employment growth. Weak job and income growth has eroded affordability for many, especially first-time homebuyers.
Governor Wes Moore is putting forward a three-bill legislative package focused on breaking down regulatory barriers to housing and capitalizing on the potential for higher density development near transit stations.
The Transit and Housing Opportunity Act would promote development near transit by cutting parking requirements, limiting local government authority to bar high-density, mixed‑use projects, and connecting Enterprise Zone corridors to state‑owned land around high-frequency transit stations.
The Starter and Silver Homes Act takes on prescriptive requirements that result in large building lots and house sizes. It seeks to expand options for smaller, more affordable attached and single-family homes by limiting minimum lot sizes in water and sewer service areas, and prohibiting barriers to subdividing single-family building lots.
The third measure, the Housing Certainty Act, aims to protect mature development applications from late-stage regulatory changes and provide certainty through earlier vesting for approved projects.
Devastating floods in Western Maryland and Prince George’s County are bringing a renewed focus on watershed planning and flood mitigation. The Maryland Department of the Environment (MDE) is nearing completion of a five-year process of revisions to the stormwater management regulations for new construction and redevelopment. During the 2026 session, MDE will seek broader authority to require that local governments conduct watershed-wide flood mitigation studies in an effort to forecast the impacts of 1,000-year storms on buildings and infrastructure.
In 2024 and 2025, there was a deadly outbreak of Legionnaires’ disease in New York City and the discovery of the bacteria in several Baltimore City government buildings. In response, the General Assembly will be asked to consider mandatory water management plans for large buildings. The proposal is based on the requirements of ASHRAE Standard 188, which sets out preventative measures for hotels, hospitals, and office buildings with HVAC cooling towers and large plumbing systems.
The General Assembly leadership and the Governor have stated that they do not intend to raise taxes during this election-year General Assembly session. Holding to that commitment may be difficult. The Maryland Board of Revenue Estimates forecasts a $1.5-billion deficit in the next fiscal year, increasing to nearly $4 billion by 2030. General fund spending growth is outpacing revenues, driven largely by long-term education and healthcare commitments. Overall economic growth has been sluggish, resulting in lower-than-expected corporate and sales tax collections.
The assembly has in recent years considered and rejected a half dozen bills granting counties the authority to tax commercial property at higher rates than residential. In 2026, counties will again seek the authority, arguing that it is needed to pay for mandated state education spending and to fund transportation projects.
The NAIOP State Legislative Committee, led by Chair Tom Pilon of St. John Properties, will engage on these and any other bills affecting commercial real estate. For more information on the NAIOP State Legislative Committee, please contact Tom Ballentine, at tom.ballentine@naiop-md.org.