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Developer Fee Details

November 12, 2019

Increased Building Fees for Schools

 

Many have followed the work by public officials and advocates to get Howard County building impact fees to a higher rate, at least for school capital funds, for years. The legislative session on CB42 which recently passed, seemed quite complicated with amendments and amendments to amendments. For those who wish to follow this level of detail, I outline the issues in the passed Bill below, and we now await the County Executive’s signature to fully pass this long overdue and much needed and appreciated Bill.

 

The Bill increases the square footage charge that is currently $1.32 and extremely lower than most other jurisdictions in MD, and is charged at time of permit, on new residential building units.

CB42 – was originally introduced by Chair Rigby, and Council Member Jung with secondary sponsors of Council Members Walsh and Jones. It was tabled in its first month after public hearing, to give more time to work on concerns. On November 4, it was passed unanimously. The following amendments were proposed and status is noted. I have left out some technical aspects. The Bill increases the square footage fee from $1.32 to $6.80.

 

Amendment 1 – filed by Jung and Rigby – Moderate income housing units (MIHU) provided above the amount that is required in a project will be charged at the lower of $1.32 or one-third of the fee.  AMENDED – Jones/Rigby added to have Columbia affordable be half the increase. (that change was added to the amendment with only Walsh voting no). This amended amendment passed with only Yungmann voting no. 

 

Amendment 2 – Allowed for new affordable projects requiring state funding be charged 1/3 of the total new fee. Walsh attempted to get the fee increased elsewhere to offset the financial cost of this amendment. That had no support. This amendment passed with only Yungmann voting no.

 

Amendment 3 – Identified certain affordable projects funded at the State Level as being grandfathered from the increase in fee.  Walsh attempted to get the fee elsewhere raised to make up for the financial loss of this amendment, which had no support. This amendment passed unanimously.

 

WHAT THESE MEAN – NEW affordable housing projects will pay 1/3 of the increased fee. Affordable projects that were already in the funding stages don’t pay the increased fee.

 

Amendment 4 – filed by Jones. Lowering the increase in fee to half for Columbia development, not just affordable. Walsh attempted to offset the cost of this amendment by raising the fee to others, only Jung supported, but that amendment to this amendment failed. Jones and Yungmann voted yes on this failed amendment.

 

This was contentious and it is great this did not pass. It was yet another benefit to Howard Hughes that was not warranted, given they have been granted a large amount of density with much lower affordable requirements and the notion that the payback issues in the TIF (Tax increment financing) deal they made with the County is somehow not profitable for them, is absurd.  It is great that this did not pass, thank you to Jung, Walsh and Rigby on this one.

 

Amendment 5 – Yungmann filed to have a phase-in of the increased fees. At first he proposed $4.08 to 2020, $5.44 to 2021, then the $6.80. This did not have support. He amended the amendment to have the phase in be $4.75 through 2020, $6.25 through 2021, then $7.50 thereafter. (The amendment to the amendment passed unanimously which increased the charges).  After being told by the County auditor’s office that this amendment would actually reap more funds for the County than not phasing in, it passed with only Walsh voting no on the amended amendment.

 

Amendment 6 – Yungmann filed this sole market rate grandfathering amendment. At first it was at a very early stage in the development process and did not have support. Walsh and Jung wanted no grandfathering of market rate units. Yungmann offered to change the stage of grandfathering to final plan approval (two steps earlier than permitting, which is when the fee is paid).  Rigby was clearly going to be the swing vote on this amendment, and proposed a change to have it be one step prior to permitting (signed final plan approval). This amendment to the amendment (Rigby’s but filed by Yungmann) passed with Jung and Walsh voting no.

 

OUTCOME OF GRANDFATHERING – For market rate units, the grandfathering being “signed” final approval versus final approval, ended up exempting a large development of over 700 units in Laurel. Walsh attempted again to get higher rates elsewhere to offset the cost without support. A Bill is enacted in 60 days, so it seems as if the Department of Planning and Zoning (DPZ) is going to be signing their hands off in the coming months. We should all get over there and hide their pens no? I wish there had just been no grandfathering on market units. The phase-in should be enough of an assist there.

 

In general, I am very pleased that we got this high of an increase, which was so needed. It is a shame it couldn’t be a bit higher, given the basis of the configuration of the amount was based on an inaccurate notion that only 42% of new students come from  new development and the rest are from resales. When you DEFINE “resales” as only a one year old house, that data just doesn’t pass the laugh test, but at least we got a large increase.

 

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