Neighbors:
As a government, we must use every tool possible to build more housing. That responsibility certainly includes zoning reform and incentivizing half-vacant office buildings to create homes for people to thrive. I am thrilled to report that yesterday the Council approved the first two pieces of the More Housing N.O.W. package that Councilmember Friedson and I spearheaded. We approved legislation to reduce the costs and speed up the approval of office to housing conversions: Zoning Text Amendment (ZTA) 25-03 and Subdivision Regulation Amendment (SRA) 25-01 create an expedited approval process, and Bill 2-25 establishes a 20-year Payment in Lieu of Taxes (PILOT) for qualifying office to housing conversions that provide at least 17.5 percent affordable housing.
Like many jurisdictions, Montgomery County has an excess of commercial office space with vacancies. At the end of 2024, the countywide office vacancy rate rose to 18.5 percent with vacancies concentrated in older, functionally obsolete office buildings, which negatively impacts revenues and introduces blight into communities.
Meanwhile, the lack of housing supply drives up costs for residents. According to the most recent data, the median sales price of homes increased by 11.2 percent across all unit types last year, while wages have only increased by 1.7 percent. As a result, working families and young professionals face exorbitant housing costs and must compete with residents at lower income bands for less expensive housing options, or leave the county entirely. From 2013 to 2023, the county’s labor force experienced a loss of 12,133 (or 10 percent) of workers aged 25-34, compared to a five percent loss in the D.C. region as a whole, while the nationwide labor market increased by 10 percent during the same period.
As our neighboring jurisdictions in Northern Virginia and Washington, D.C. have already done, Bill 2-25 and ZTA 25-03 address these interrelated challenges by incentivizing the adaptive reuse and repurposing of highly vacant office buildings to ensure the highest and best use of these properties. These vacant office buildings are currently paying very little in property tax and will be paying even less into the future as they depreciate once they are reassessed, or their tax bills are appealed. For context, the assessed value of office real estate is only six percent of total assessed value in the county, and the highly vacant office buildings represent a mere fraction of that.
With redevelopment into multi-family housing, the County will be receiving new impact taxes for schools and transportation, additional income taxes from the new residents, and revenue from fees, in addition to the spillover benefits of new construction jobs and increased economic activity at local businesses. Moreover, at the end of the PILOT term, the property tax receipts from the redeveloped building will be significantly higher due to a ten-fold increase in value relative to the vacant office building, based on conservative estimates.
I’m proud to be part of a Council that understands the urgency of moving forward with more housing solutions.
Status of the More Housing N.O.W. Package
As you know, the package takes a comprehensive approach by leveraging zoning reforms, financial incentives, and public investment to create more housing. It includes:
- Workforce Housing ZTA: Allows more housing types along key corridors while requiring 15 percent workforce housing (The PHP Committee will continue its review of this zoning measure in June after the Council approves the budget).
- Workforce Housing Opportunity Fund: Supports workforce housing development (status: to be addressed during the budget).
- Office to Housing ZTA and Subdivision Regulation Amendment: Expedites the approval process for conversion of underutilized office space into housing (status: approved on April 8).
- Office to Housing Tax Abatement Bill: Provides incentives to encourage office to housing conversions (status: approved on April 8).
- Doubling the County’s investment in the Homeowner Assistance Program (status: to be addressed during the budget).
Updates on Tax Credits
I’m thrilled to share that applications for my two bills on property tax credits are now LIVE! These important programs expand financial relief to more of our veterans and first responders, ensuring they receive the support they deserve. If you or someone you know qualifies, visit the links below to apply:
- Bill 6-24: the Property Tax Credit for Disabled Veterans
- Bill 15-24: Expansion of the Property Tax Credit for Public Safety Workers
This is a big step in making Montgomery County more affordable for those who have served our country.
Furthermore, I would like to take the opportunity to share that last week, the Council unanimously approved a bill led by the GO committee that I co-sponsored: Bill 3-25, which expands eligibility for the County Supplement to the State of Maryland Homeowners’ Tax Credit, known as the HOTC. The HOTC and the County Supplement to the HOTC are progressive tax credits administered by the State of Maryland Department of Assessments and Taxation (SDAT) where lower income households receive a larger credit on their property taxes. Bill 3-25 is aimed at helping residents who have limited or fixed incomes and are cost-burdened because of rising property assessments by doing three things to expand the pool of eligible individuals who can apply for the County Supplement to the HOTC credit:
- increasing the combined income eligibility level from $60,000 to $75,000;
- increasing the net worth criteria from $200,000 to $250,000; and
- increasing from $300,000 to $375,000 the assessed value upon which the credit could apply.
Residents can apply via the Maryland Department of Assessments and Taxation.
Budget Underway
This week, the Council officially kicked off its review of the upcoming year’s budget. We have held public hearings on Monday, Tuesday, and Wednesday with hundreds of residents testifying. I am so grateful for the outpouring of constructive feedback on the budget.
To that end, we received a very detailed overview of the Operating Budget from Council staff. I encourage you to review it. As we do every year, my colleagues and I will work to craft a budget that balances the needs of our community members, brings a world class education to our students, and makes targeted investments in our economy while being mindful of the effects of rising costs on working families.
Youth Townhall
Last week, we had an enriching youth townhall on arts and culture with over 120 middle and high school students from my district, including from Kennedy, Wheaton and Einstein High Schools, and Argyle, Odessa Shannon, A. Mario Loiederman and Parkland Middle Schools. We proudly organized this meeting in partnership with the Arts and Humanities Council of Montgomery County and held it at the Park and Planning Commission headquarters in Wheaton. Thank you all for coming!
