Government officials in Anne Arundel County and Baltimore City will consider advancing two separate proposals Monday night that would compel both jurisdictions to implement requirements that could boost the supply of reduced-priced housing in both areas.

Though the city’s legislative package differs slightly from the county’s proposal, they share a similar goal: that housing developments exceeding a certain size or value, or already receiving large public subsidies, should allocate at least a portion of the units for people at income levels below the Baltimore-area median — a practice known as inclusionary housing.

Why inclusionary housing?

Housing policy experts say inclusive mandates can help unravel generations of racist practices that segregated neighborhoods along lines of race and class. Integrating communities also has social and economic benefits for residents and can give more people better access to transit, food, health care and schools. The considerations come as jurisdictions across the country race to put forth solutions to dueling housing affordability and supply challenges. Freddie Mac and the National Association of Realtors estimated Maryland was short 120,000 housing units in 2022; Greater Greater Washington estimates the deficit is as many as 91,000 units.

Inclusionary housing mandates are in practice in several jurisdictions across the country, including in nearby Montgomery County, which instituted the measure in 1976. There, it has produced more than 16,000 moderately priced rental and for-sale units, according to county data.

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“Development is happening in the city. The question is, who is going to participate?” said C. Matthew Hill, an attorney and team leader of the Human Right to Housing Project at the Public Justice Center, before a Baltimore City Council hearing about the matter last week. “We need to get this done. If we don’t, that means there’s not going to be any affordable units in those developments coming online.”

Critics of the policy say market-rate house prices in places with inclusionary requirements have risen, exacerbating the affordability problem. And the requirements can cause developers to choose different types of projects or rethink investing in certain areas over others.

A city-based inclusionary housing policy, long criticized as too flimsy, expired in 2022. Over 17 years, it produced less than three dozen moderately priced units, according to the city.

In Anne Arundel County, meanwhile, the County Council took up the issue in 2004 under the leadership of state Sen. Pamela G. Beidle, then a county councilwoman. Beidle said she had the votes to pass the bill, but it failed when one member left the chambers early on the night of the vote. Had the measure passed, Beidle said earlier this month, the county would have produced roughly 4,000 more moderately priced units by now.

Two approaches

Despite sharing some common ground, the bills differ in crucial ways.

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In relatively affluent Anne Arundel, County Executive Steuart Pittman handcrafted the bill, referring to it as the fourth piece of the housing-related agenda he mapped out after taking office in 2018. Now in his second term, the Democrat must now whip four votes from the seven-person council to get the bill passed. He faces some resistance from business leaders and developers and County Council Democrat Allison Pickard, who has argued the bill doesn’t go far enough in addressing the problem.

In Baltimore, the bills, engineered by City Councilwoman Odette Ramos, have won the crucial backing of City Council President Nick Mosby, but have received a more tentative response from Mayor Brandon Scott’s administration, who argued that the city’s $100 million structural budget deficit may make the inclusionary housing tax credit component unfeasible (the city’s Department of Finance, meanwhile, has been criticized for not suggesting the city amend the amount it spends on developer subsidies every year).

Representatives from the first-term mayor’s administration said last week that while Scott supports the concept, the legislative package would need to be amended before landing on his desk, and they asked for more time to consider the cost implications. A vote is expected on the legislative package Monday night.

What’s in the bills?

Here are the specifics of both measures, as of Monday afternoon.

  • In Anne Arundel County, the so-called Essential Worker Housing Access Act would require new multifamily rental development projects that exceed a certain size to reserve a portion of their units for people earning 75% or below the Baltimore-area median income; for-sale development projects with 20 or more units would be offered at 100% or below the area-median income. It would allow developers creating smaller-scale projects to pay a fee in lieu of the moderately priced unit requirement that would be directed toward the county’s affordable housing trust fund. Regulated for-sale and rental developments would be required to offer 15% of the units at the reduced-price rate. The county, in exchange, would allow developers to build 15% more units than what is authorized under current zoning, which is more commonly referred to as a “density bonus.” It would also waive impact fees and cut water and sewer connection bills by 50%.
  • In Baltimore, any multifamily market rate development with 20 or more units that is already receiving “major” public subsidy or planning to apply for one must offer up to 15% of the units at reduced prices; 10% would be for people earning up to 60% of the area median income. If additional public subsidies are available, developers would be asked to extend access to people earning up to 50% of the area median income. The mandate would apply citywide and would be overseen by a nine-person Inclusionary Housing Board, which would be tasked with reviewing the regulations and offering guidance. A complementary bill would offer a tax credit equal to the difference of the market rate and the rent collected in the reduced-priced units with a cap of $1,200 per unit per month or $14,400 per unit per year. Developers would have to apply to make use of the credits.
  • The City Council is expected to consider several new amendments Monday, including one from Ramos that would require the Inclusionary Housing Board and the city’s Department of Housing and Community Development to study the effectiveness of the program after the completion of the first 200 units; one put forth by City Councilman James Torrence that would cap the inclusionary housing mandate at 350 units; and one from Mosby that would adjust the reduced-price requirement to 10%, with half of those units for people earning 60% of the area median income and half for people earning up to 50% of the area median income. He also put forward an amendment that would start the study after three years, instead of Ramos’ suggested 200 unit benchmark. Mosby encouraged the City Council to vote down Torrence’s amendment Monday afternoon.