An Anne Arundel County Council bill introduced this week would require a portion of all new residential developments with 20 or more units be set aside for people with incomes at or below the Baltimore-area median.
Called the “Essential Worker Housing Access Act,” the ordinance would mandate that qualifying new rental developments designate 15% of units for people earning 75% of the area median income or below, and all new for-sale developments with more than 20 units would assign 10% of them for people earning no more than 100% of the area median income. This amounts to about $82,875 for an individual and $118,313 for a family of four, according to the county’s sliding scale.
Meanwhile, developments with 10 to 19 units would have the option to pay a fee instead of reserving affordable units, according to the draft of the legislation. Those fees would help support a county fund dedicated to affordable housing solutions. And developers with nine units or fewer would be exempt from the bill’s requirements.
A hearing is scheduled for the bill in November.
Anne Arundel County Executive Steuart Pittman, who is spearheading the bill, said the county would attempt to make the requirements financially viable for developers by cutting developers’ water and sewer bills by 50% and waiving certain one-time fees for utilities.. Developers also would receive “density bonuses” — or the ability to build more units than what is usually allowed under local zoning — of 10% for homeownership units and 15% for rental units.
Despite what the title of the ordinance suggests, there are no job requirements for people to qualify for an income-restricted unit. But Pittman said income eligibility requirements will likely encompass “essential workers,” a term used during the coronavirus pandemic that identified groups of frontline employees including in health care, government and critical trades.
In addition to the income-eligibility requirements, the “moderately priced” units would be limited to those who not have owned a home in the last three years. Eligible people would also either have to have been residents of the county or of Annapolis for a year; employed by the county for the last year; or be currently employed by the county, city of Annapolis or the Anne Arundel County Board of Education.
Pittman, a second-term Democrat who won reelection last year, said the county has long sought to create more housing opportunities for its workforce — teachers, service workers and law enforcement officers, for example — who may not be able to afford housing where they live or work. This bill predates the coronavirus pandemic, Pittman said, and would join a few other housing measures put forth during his tenure, including one that created a housing trust fund in the county and a fair housing bill that restricted housing discrimination based on income source.
Pittman pledged to “work harder on this than any other [bill] to get this passed.”
“We expect a bit of a battle on this,” he said in an interview with The Baltimore Banner. “This is the first time we’ve asked developers to put skin in the game. But if we don’t do this, and we don’t do this now, the units that come online ― two, three years down the line — and that land, will have been lost.”
Pittman said he did not believe the bill would generate community opposition. Workers of all incomes have felt the impact of the COVID-19 economy, he said, and no neighborhood would be dramatically altered, devalued or displaced as a result.
But he did acknowledge that housing and building developers already have expressed opposition, arguing that it will hurt their profit margins and discourage more high-density projects in the county.
Still, Pittman said, “I actually think this is good politics,” and said he hoped the county’s planned incentives will help bridge the divide.
Representatives from the Maryland Building Industry Association did not respond to requests for comment. Aaron Greenfield, who directs government affairs for the Maryland Multi-Housing Association, said the organization is obtaining feedback from members and could not yet comment.
Robert Johnston, CEO of the Anne Arundel County Association of Realtors, commended the county executive for seeking out solutions to what he referred to as a national and local “housing crisis.” But he thinks the measure could dissuade developers from entering the county fold.
“It could place more burden on them, and create more hoops for them to jump through that they may not even bother to come,” he said. “But we’re looking at it [the bill], we’re working on it and we will be giving some input.”
Jurisdictions across the U.S. are zeroing in on housing affordability as a top priority as rent and mortgage prices soar. Nearly a quarter of all renters are severely cost burdened, according to the National Association of Counties. And there’s a shortage of nearly 4 million homes nationwide — both rentals and for-sale — that will take 20 years to remediate, according to Freddie Mac.
In July, the national counties association published a set of policy recommendations centered around solving the affordability challenge. Included in the guidance is a suggestion for counties to lower or waive “impact fees” to encourage development and foster more affordability — precisely the approach in Anne Arundel.
Rents in the county have risen dramatically over the past three years by an average of 5.7% a year from 2019 to 2022, according to county data. The county estimates median home prices jumping from $324,604 in 2017 to $438,140 in 2022, or 35%. The price hikes stem from a mix of factors, including higher costs of construction materials, more competition among homebuyers, and rising mortgage interest rates that pushed more people into the rental market. Meanwhile, median household incomes have also grown by about 17%, according to the county.
About 45% of renters in Anne Arundel County are cost burdened, paying more than 30% of their income for housing, with another 19% paying more than 50% of their incomes for housing, according to a fact sheet prepared by the county executive’s office about the ordinance. The county’s affordable housing waitlist stands at more than 31,000 households, or 100,000 individuals, according to the county.
This measure likely won’t make much of a dent in that backlog, said Emily Hamilton, senior research fellow at the Mercatus Center at George Mason University, a libertarian think tank.
Such programs, Hamilton said, generally come at a cost: “They can make it so projects won’t happen, or different types of housing developments go forward than would have without this requirement — and that might have important benefits for these households living in income-restricted units but have costs borne by the housing market overall,” she said.
And localities that have adopted mandatory inclusionary zoning requirements have seen slightly higher growth rates in their median home prices than they could’ve expected without, Hamilton added, further exacerbating affordability challenges.
Still, the essential worker bill already has won support from Arundel Community Development Services, the quasi-governmental organization that creates and supports affordable housing opportunities.
“We appreciate that this bill is creating another tool to help that mission,” CEO Erin Karpewicz said in a statement. “More than just creating affordable units, inclusionary housing policies also help develop housing choices in communities that otherwise may not produce housing that is affordable to some of our essential workers.”
It’s not yet clear how the County Council will respond to the proposal.
County Councilwoman Allison Pickard, the council’s vice chair, said she hopes the bill will generate more discussion and collaboration about county zoning policies, which she notes have been long overlooked.
“I’m hopeful the county executive can work with the council, and we can make some tweaks here and there, and we can have an impactful policy,” she said.
Pickard, a second-term Democrat, said she’s not sure what the actual impact of the bill would be without such changes, despite the attached density bonuses. “Ten percent of a low number is a low number,” she said. “It will take more than one piece of legislation to get where I think we need to be.”
She declined to comment on the positions her council colleagues would take on the matter, saying that all seven members would likely present clashing opinions.
“This is a big bill,” she said. “And housing conversations can always be complicated to navigate.”
Anne Arundel isn’t alone in working toward — and grappling to implement — housing affordability solutions.
- In Howard County, Councilwoman Liz Walsh introduced an amendment Monday to the Howard County General Plan that would “legislate rent stabilization measures.”
- In Baltimore County, the newly formed housing department is throwing its weight behind meeting its goals to create more affordable housing units by 2027 as part of a voluntary consent agreement it signed in 2011 to rest a housing discrimination lawsuit.
- And in Baltimore City, a pair of “inclusionary housing” bills would require developers using public subsidies for projects of a certain size reserve 10% of the units to people earning no more than 60% of the area median income and provide a 15% tax credit. But neither has advanced out of committee.