Subject
title
Discussion & Instructions, Possible Introduction, and Possible Adoption of an Ordinance to amend City Code Chapter 13.5, titled “Moderately Priced Housing,” to require that all housing developments with twenty or more dwelling units provide moderately priced housing
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Department
Housing and Community Development
Recommendation
Staff recommends lowering the threshold at which residential development applications are required to provide moderately priced dwelling units (MPDUs) from fifty (50) units to twenty (20) units.
As written, the ordinance would become effective immediately upon adoption, except that it would not apply to any housing development for which an applicant has submitted an application for a building permit, preliminary plan of subdivision, record plat, project plan, or site plan as of the date this ordinance was adopted.
If the Mayor and Council wish to proceed with adoption of the ordinance at the same meeting, the ordinance should first be introduced and then a motion should be made to waive the layover period. If the motion to waive the layover period is approved by an affirmative vote of six or more members of the Mayor and Council, a motion to adopt the ordinance may then proceed.
Discussion
The city first established Chapter 13.5 (Moderately Priced Housing) in 1990. Currently, the requirement in Chapter 13.5 (Moderately Priced Housing) only applies to residential developments with 50 or more housing units. Qualifying developments must offer 15% of the total units for rent or sale to moderate income households as moderately priced dwelling units (MPDUs).
The 2021 Rockville 2040 Comprehensive Plan (Comprehensive Plan) includes an action item to “adjust the structure of the MPDU program to encourage the production of more MPDUs” and lists “explore and study requiring MPDUs for residential developments of 10 units or more” as an example.1 Staff is in the early stages of a comprehensive MPDU ordinance rewrite, which will delve into the action items in the Comprehensive Plan and more. However, prior to that process, staff believes it would be in the city’s best interest to reduce the MPDU applicability threshold from developments with 50 or more units to 20 or more units, in alignment with both Montgomery County and the City of Gaithersburg’s MPDU programs.
Given the threshold of 20 units in the city’s neighboring jurisdictions, development in the City of Rockville would not be expected to experience any significant negative shocks. Conversely, staff expect residential development projects would increase in unit count since there would no longer be an incentive for projects to have just under 50 units so as to not be beholden to the MPDU program.
Since 2014, there have been two development projects approved with 20-49 units. If the MPDU threshold had been 20 units rather than 50 units during that time period, the city would have approved an additional 12 MDPUs. There are currently two projects with 20-49 units under review. If the 15% MPDU set-aside requirement applied to these projects, the city would receive 13 additional MPDUs.
Mayor and Council History
On October 29, 2018, staff recommended to require MPDUs for residential developments of 20 units or more as a part of a broader work session on the MPDU program and accessory dwelling unit requirements. Due to a lack of Mayor and Council support, this recommendation was not ultimately included in the final ordinance update that was adopted on April 1, 2019.
Next Steps
Should the Mayor and Council adopt the ordinance, the change could immediately apply to all new, qualifying development applications. Further changes to the MPDU ordinance will be discussed at subsequent Mayor and Council meetings.