Updated: Elrich Opposes Affordable Housing Targets in Council’s Economic Development Plan

Joint press conference was meant to highlight agreement between branches

By Kate Masters

Council President Nancy Navarro announces a new economic development platform at a press conference on Tuesday. Photo by Kate Masters

This story was updated on Nov. 13 at 11:50 a.m. to correct a quote by Council President Nancy Navarro. It was updated again on Nov. 22 at noon to provide a corrected, fuller account of County Executive Marc Elrich’s comment about affordable-housing targets.

Amid increasing concern over Montgomery County’s fiscal future, Council President Nancy Navarro and County Executive Marc Elrich met Tuesday to announce a comprehensive new economic development platform.

But the joint announcement underscored major disagreements between Elrich and the County Council on affordable housing targets for the region. Housing is one of the key pillars — or core areas for improvement — of the four-part development plan, along with transportation, business development and workforce development.

Each pillar includes broad goals, such as increasing public transit ridership (transportation) or “promoting the County’s businesses” (business development). The plan does not set clear policy proposals for improvements. Council committees are tasked with establishing work plans for each pillar and presenting them to the full council in February.

“What makes us so awesome in Montgomery County is that we care so much about the most vulnerable,” Navarro said at the press conference. “We care very deeply, but… in order for us to continue to fund education, in order for us to continue to fund the safety net, in order for us to continue to fund all of those really awesome programs, like after school programs, etc., we have got to expand our tax base.”

The housing pillar includes the clearest mandate, tasking the council with meeting recent housing targets established by the Metropolitan Washington Council of Governments. The regional organization prioritized new development near transit centers, a recommendation incorporated into the new economic development platform..

But at Tuesday’s press conference — ostensibly an intergovernmental show of support for the council-developed platform — Elrich dedicated a significant portion of his remarks to criticizing the organization’s housing goals.

The Council of Governments projected a need for at least 320,000 new units for low- and middle-income households in the region over the next 10 years. Approximately 41,000 of those units are needed in Montgomery County, according to planning experts and regional leaders, including sections of Rockville and Gaithersburg.

Navarro, a member of the Council of Governments housing work group that developed the targets, said the organization adopted a broad income range for new housing — accommodating low-income earners, families and young professionals who earn a median wage but still struggle to find housing in an increasingly expensive area.

The organization’s report noted recommendations from the Urban Institute, which projected a need for approximately 38% of new units in the low-cost band (with costs between $0 and $1,299 a month), 40% of units in the mid-cost band ($1,300-$2,499 per month) and 22% of units in the highest-cost band ($2,500-$3,500 per month).

Montgomery County specifically is projected to need 23,100 units in the low-cost band, 18,100 in the mid-cost band and 6,300 in the high-cost band, according to the Urban Institute.

Elrich has disputed the increased targets, interpreting the report as a projection of low-wage growth in Montgomery County.

“If you read the report … their assumption was, that of the next 40,000 households, 10,000 would not be able to afford more than $800 a month rent,” Elrich said at the press conference. “That’s 10,000 households earning less than $30,000, or around $30,000. The next 10,000 households could not afford more than $1,300 a month rent, which means a $52,000 or $50,000 income. …That’s not the kind of job profile that we’re trying to bring to Montgomery County.”

Actually, a resident would need to make approximately $51,960 a year after taxes to comfortably afford a unit at the upper range of the low-cost band — widely defined as spending no more than 30% of monthly income on rent or mortgage payments, according to the U.S. Department of Housing and Urban Development — and $99,960 to comfortably afford a unit at the upper range of the mid-cost band.

It’s unclear whether Elrich’s objections will factor into the implementation of the development platform. He can propose new funding and legislation, but both must go through the council for final approval.

Elrich briefly mentioned plans to submit a no-net-loss affordable housing strategy to the council, which would prevent the demolition of existing affordable housing units, according to spokesman Barry Hudson.

But the plan “isn’t ready for prime time,” Hudson said, and the council has not been briefed on the details. The county’s Planning Department already prioritizes existing development in master plans, Navarro said.

“I’m not concerned by the county executive’s comments,” she added in a phone interview after the press conference. “I think the public knows we have a problem with housing. Our young people and seniors are having a hard time staying in the county. So, as a council, we’re going to do everything to move this forward.”

Individual council members have already advanced plans to increase housing availability. In July, the council passed a bill from Council Member Hans Riemer that makes it easier for property owners to construct accessory dwelling units on residential lots.

In October, Council Member Evan Glass proposed a bill that would impose impact taxes on “teardown homes” — new residences that replace existing construction. The new fees would raise roughly $43 million for the county’s Housing Initiative Fund over the next 10 years, he said.