Baltimore is one step away from more affordable rents for new housing

After a nearly two-year campaign cheered on by housing advocates and policy experts, the Baltimore City Council on Monday night approved an inclusionary housing bill that would compel all major developments to reserve a portion of the units to be rented at reduced prices.

Meant to bolster diversity in neighborhoods and increase the stock of affordable units in affluent communities, inclusionary housing policies have been passed in cities and jurisdictions across the country — including in Baltimore, which approved a similar measure in 2005. That policy, which expired in 2022, had long been criticized as ineffective, producing less than three-dozen moderately priced units in 17 years, according to the city.

At Monday evening’s meeting, City Council President Nick Mosby called the new policy “the most equitable way of pushing our city forward.”

“As we continue to utilize our tax base and grow our communities around the Inner Harbor, we know mixed-use, mixed-income communities are our safest communities, our best communities,” Mosby said.

The council delayed a vote on a complementary bill that would provide a tax credit for developers to offset the costs of affordable housing units.

Under the leadership of Baltimore City Councilwoman Odette Ramos, the city’s inclusionary housing bill has advanced slowly. It’s received mixed reviews from city agency leaders who have questioned Baltimore’s ability to pay for the tax credit program as well as whether it would discourage developers from investing in the city.

The latest version of the bill forges middle ground between developers, community members and advocates, Ramos told reporters before the vote on Monday.

“This is a bill that we can all be proud of,” Ramos said, acknowledging that the bill package is “not perfect” and has lost some of its punch over the past several months.

The tax credit bill, for example, represented to her a “hard pill to swallow,” she said, given the massive amounts of subsidies already available to developers who build in Baltimore. In fiscal year 2022, the city disbursed about $38 million in developer incentives, according to city data.

In a statement, Mayor Brandon Scott said he would sign the tax credit and inclusionary housing measures into law.

The inclusionary housing measure will help combat racist past policy and intentional disinvestment in Baltimore, he said in a statement, adding that it is part of a broader effort to support working families and create more inclusive communities.

Scott had previously said he supported the concept, but both bills would need to be significantly refined before reaching his desk.

The bill that passed Monday requires any development with 20 or more units that is receiving or plans to apply for a major public subsidy to reserve up to 15% of its units for households earning below the Baltimore area median income. Of those:

• 5% would go to households making 60% of the area median income (about $53,000 for a family of two and $67,000 for family of four)
• 5% would go to households earning 50% of the area median income (about $48,700 for a family of two and $60,850 for a family of four)
• And, if more subsidies are available at the city’s Department of Housing and Community Development or the Housing Authority of Baltimore City, another 5% would go to households at 50% or below the area median income

There are no waivers but a few exemptions: dormitories, residential care facilities, fraternities/sororities and student housing. Penthouses, large apartments and the highest-rent units in developments also are not included in the requirement. The units would stay affordable for at least 30 years; after that, the city or nonprofits will have the ability to buy and to master lease those units to keep them affordable.

The bill requires an “in-depth” study of the program after the completion of the 200th unit or the first three years after the ordinance’s passage, whichever comes first. The study would be commissioned by the city’s housing department and the Inclusionary Housing Board, a nine-member committee that would be charged with reviewing the bill’s regulations.

The tax credit bill, expected to receive a vote Thursday, would offer a credit equal to the difference between the market-rate rent and the rent collected from the inclusionary units. Developers would apply for the credit each year.

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