In what is being described as a major and business-friendly shift in development policy, the Montgomery County Council has adopted a Growth and Infrastructure Policy that eliminates moratoria on new developments.
The “marquee change” in the new policy which came into effect January 1 and lasts through 2024, is the elimination of residential development moratoria based on school capacity, Jason Sartori, Chief of the County-wide Planning and Policy Division, said in a presentation.
Instead of blocking development, the county will require Utilization Premium Payments (UPPs) for each new residential unit constructed and will tailor those payments to reflect capacity levels in area schools, the type of residential units built and an updated process that more accurately anticipates the number of students generated by each housing type.
In addition, the new policy lowers those UPPs from the previous level of 120 percent of the cost of each additional seat in a school to 100 percent. Overall, the new policy will lower UPPs on all new housing starts with savings ranging from $2,900 to $16,700 per unit, Sartori said.
“In Montgomery County, there is such an understanding that there is a need for more housing to accommodate growth. The county is being creative and figuring out ways to remove some of the barriers to developers coming into the county,” said Stacy Silber of Lerch, Early & Brewer.
The new policy could facilitate both housing growth and a variety of mixed-use and other projects.
“The problem with the previous policy was the moratoria were happening in those areas where the county wanted to direct growth – for example, certain areas of North Bethesda and Silver Spring,” Silber said.
The previous policy also created an environment where existing and anticipated moratoria dampened development activity.
“Investors need certainty that there is not going to be a capacity issue or a school delay that prevents a development from coming to fruition,” she said. “In the past, a number of institutional users decided to sit on their development plans and not invest in soft costs until a local school issue was firmly resolved.”
The county’s new Growth and Infrastructure Policy also changes requirements and fees relating to transportation. The policy eliminates motor vehicle adequacy tests in Red Policy Areas (i.e. sites within half a mile of a Metro station) and expands the list of Red Policy Areas to include future Purple Line stations. It also exempts new bioscience facilities from all transportation adequacy tests for the next four years and discounts transportation impact fees in Desired Growth and Investment Areas.
The policy, however, also expands the adequate public facilities tests that determine whether a developer will be required to fund transportation improvements, such as roads, bike lanes, sidewalks, bus shelters and other infrastructure.
“My sense is a greater percentage of development applications will be required to do transportation studies and provide mitigation,” said Brian Downie of Saul Centers, Inc. “Secondly, I think those mitigation measures tend to cost more than they would have cost under the old requirements.”
Downie notes that the policy further expands the number of transportation items that must be studied and potentially paid for.
“In 2016, the county expanded its transportation test to become multi-modal and include roads, sidewalks, bicycle lane capacity, transit capacity and ADA compliance. The 2020 test adds street lighting and measures to meet Vision Zero criteria, which is the county’s policy to try to reduce to zero the number of bicyclist and pedestrian fatalities,” Downie said. “What dollar impact all of that will have on a development is yet to be determined.”
“The transportation test is a really intricate piece of legislation and we won’t know all the impacts until it has been applied to multiple projects,” Downie said. “But overall, I think the new Growth and Infrastructure Policy is a positive development. I think county council showed they want a policy that fosters growth.”