Members of the GBC’s Built Environment and Regional Transportation Committee are mulling potential unintended consequences of a city task force’s proposals for increasing affordable housing in the city through enactment of an “inclusionary housing” concept.
A public hearing will be held on October 4 by the Baltimore City Council’s Land Use and Transportation Committee to consider recommendations issued in July by a task force appointed by the council to study the prospect of creating an inclusionary housing plan in the city.
GBC committee members are voicing concern over the potential consequences of a key task force’s recommendation that most future developments of 30 or more houses in the city be mandated to include at least 10 percent “affordable” units.
Task force recommendations would impose “inclusionary” home requirements of 20 percent in developments where there is “direct, major public subsidy;” 20 percent where there is “significant rezoning,” and 10 percent where there is no major direct public subsidy.
Arbitrary mandates could result in artificially stifling housing development in the city at a time when city leaders are seeking to increase residents, advocates for developers and real estate agents warned at a July 27 GBC meeting to review the task force recommendations.
While most agree on the need for affordable housing in the city and the region, developers and business advocates are urging caution in developing specific strategies that could impact Baltimore’s current housing development momentum.
“One primary concern is that the task force performed no financial or cost-benefit analysis to gauge the potential economic effects of the recommendations on the market or on the city coffers,” said GBC President Donald C. Fry.
For instance, GBC committee members pointed to the task force recommendation that would effectively impose a minimum “affordable” housing percentage requirement on all developers – including those who seek no public subsidy or assistance for their projects.
Some questioned whether it’s appropriate to impose such mandates on unsubsidized private property.
Such a requirement would have the consequence of encouraging developers – even pushing them – to obtain public subsidies for their projects, rather than find ways to build developments without public subsidies or incentives, several GBC members noted.
A better approach would be to make incentives – such as tax credits or low-interest loans – available to developers who require no subsidies to encourage them to include affordable units, but not to mandate it, suggests Jody Landers, president of the Greater Baltimore Board of Realtors.
Other task force recommendations include:
- Creation of an inclusionary housing trust fund that would use 20 percent of city transfer taxes to fund assistance for working families and others with low to moderate incomes;
- streamline city land acquisition processes to “ease the availability of land for development;”
- passage of “appropriate grandfather provisions” for when the inclusionary requirements would take effect;
- enactment of a “clear and efficient appeals and exceptions process in appropriate situations;”
- increase state level of support to at least $50 million for workforce housing grants.
So far, no specific inclusionary housing bill has been filed in the City Council, but advocates expect that a bill will be filed in the fall, possibly before the October 4 hearing.
July 11 Baltimore Sun story on inclusionary zoning