Subject
title
Public Land Disposition and Co-Location of Affordable Housing Work Session
end
Department
Housing and Community Development
Recommendation
Staff recommend that the Mayor and Council receive the presentation, discuss, and provide direction on a policy for public land disposition and co-location of affordable housing. The feedback received from the Mayor and Council will guide staff’s drafting of policies. Do you agree with staff’s recommendations to:
1. Inventory public land.
2. Create a policy for the disposition of public land for affordable housing.
3. Create a policy for the co-location of affordable housing with new or significantly renovated public facilities.
Discussion
Background
Land availability and acquisition are significant barriers to affordable housing development in the City of Rockville. Because publicly owned land can reduce or eliminate one of the largest costs of housing development, establishing a process to consider affordable housing when disposing of public land or developing new public facilities could make projects financially feasible that otherwise would not be. Additionally, co-locating affordable housing with new public facilities like libraries, parking garages, community centers, and fire stations can maximize the use of public land for the public good.
Creating a public land disposition policy was one of five recommended tools in the Rockville Housing Needs Assessment, published in June 2026 (Attachment A). Key actions included completing a public land inventory, adopting a disposition-for-affordability policy, allowing use of ground leases, and coordinating with Montgomery County.
Furthermore, as a part of the Housing Needs Assessment, the consultant prepared a Site Suitability and Unit Yield analysis of parcels across the city to identify sites suitable for multifamily development. Sites were then scored based on their proximity to amenities and inclusion within state and federal priority development areas to identify sites with the highest development potential and greatest level of opportunity for future residents. The analysis identified six publicly owned sites, owned by either the city or the Washington Metropolitan Area Transit Authority (WMATA), suitable for multifamily development with a potential yield of 3,041 units. City-owned sites were estimated to yield 798 units.
Current Policy
The policy for acquisition, possession, and disposition of city property is found in the City Charter Article XII Section 1: “The City may acquire real, personal, or mixed property within or without the corporate limits of the City for any public purpose by purchase, gift, bequest, devise, lease, condemnation, or otherwise and may sell, lease or otherwise dispose of any property belonging to the City. All municipal property, funds, and franchises of every kind belonging to or in the possession of the City (by whatever prior name known) at the time this section becomes effective are vested in the City, subject to the terms and conditions thereof.”
There are separate requirements for the permanent closing and abandonment of city right of way, found in City Code Chapter 21 (Streets, Roads, Rights-of-Way, and Public Improvements) Article V Division 2, but this would be less relevant for the construction of housing.
Examples of Public Land Disposition Requirements for Affordable Housing
Washington, D.C.
The Mayor of Washington, D.C. may dispose of District-owned property that the Council has determined is no longer needed for public use. The Disposition of District Land for Affordable Housing Amendment Act of 2014 requires public land sold for residential development of 10 or more units to dedicate a certain percentage as affordable housing. In these cases, the land may be sold below market value.
At least 30% of the units must be dedicated as affordable housing in designated areas near public transit and at least 20% of units must be dedicated in all other areas of the city. The units must remain affordable for the life of the building. A quarter of the rental units dedicated as affordable must be for residents earning 30% AMI and the rest for those earning 50% AMI. With for-sale properties, affordable units must be split between those earning 50% AMI and 80% AMI.
The Mayor may waive the affordable housing requirement, provided that:
• The appraised value of the property is insufficient to support the affordable housing requirements, taking into account all other available sources of public funding for affordable housing;
• The terms and conditions under which the real property is to be disposed satisfy the housing requirements to the maximum extent possible; and
• The Chief Financial Officer has provided to the Mayor and Council a financial analysis stating whether it is likely the developer could be reasonably expected to meet the affordable housing requirements.
Additionally, the Mayor may reduce the affordable housing requirements if the proposed disposition finances the development of a significant public facility.
King County, WA
King County Ordinance 12394 requires that any surplus parcels that are suitable for housing should be sold or leased for the development of affordable housing. “Each year the surplus property list is updated, and suitable properties are offered for development as affordable homes.”
“Departments are required to provide status reports on all sites on an annual basis; properties that are designated as ‘surplus’ are then subject to further inquiries to determine whether they should be transferred to another department or be considered for affordable housing. Factors considered when determining viability for affordable housing development include the site’s natural features, the underlying zoning designation, and existing linkages to utilities.”
San Francisco, CA
San Francisco requires the transfer of underutilized or surplus property to the Mayor’s Office of Housing for the development of affordable housing, though this excludes land and buildings reserved for open space or parks purposes, various rights-of-way, property owned by the school district, and certain enterprise city agencies. Suitable properties are to be sold or leased to a non-profit for the development of either: affordable housing for the homeless and extremely low-income households, on-site services for the homeless or non-profits serving the homeless, or housing for households earning less than 60% AMI. Land may be transferred at below market value or at no cost.
The Center for Housing Policy and the National Housing Conference identified that the San Francisco ordinance is limited because “it places the responsibility for determining which properties are underutilized or surplus with each individual city department, and does not audit departments or provide incentives for turning over property for use as affordable housing.”
Examples of Affordable Housing Co-Location with Public Facilities
Montgomery County, MD
Montgomery County requires that for any applicable capital project, prior to the completion of facility planning, the program of requirements, site selection, or land acquisition, the Department of General Services (DGS) must prepare and submit an affordable housing feasibility study to the County Council. The council must then vote on whether to approve or disapprove the analysis provided in the feasibility study. An analysis approved by the council permits the project to proceed in its normal course of planning, design, and construction. If the council disapproves of the analysis and determines that co-location of affordable housing is feasible, DGS must develop a plan where the capital project includes affordable housing.
The council may waive the feasibility study requirement if it finds that the project would result in a loss of a site, require emergency appropriation, or may experience further delay not in the best interest of the public.
Additionally, for each applicable capital project in the Capital Improvements Program (CIP) during facility planning, the Office of Management and Budget must include in or transmit with the CIP an evaluation of:
• The feasibility of including affordable housing;
• The effect on the supply of affordable housing in the immediate area;
• What capital or operating modifications, if any, would promote and maximize affordable housing in the project and the immediate area; and
• What operating budget modifications, if any, would be needed to build and maintain affordable housing in the project.
The evaluation also discusses the compatibility of affordable housing, conformity with applicable zoning and land use plans, and proximity to public transportation and other community services.
Boston, MA
Although Boston does not have a formal policy requiring the co-location of affordable housing with public facilities, in 2018, the city established a Housing with Public Assets initiative by putting out a Request for Information, hosting a response showcase at the Boston Society of Architects, and soliciting public input. As a result, in 2024, the city designated a team to redevelop a two-story branch library with 119 income-restricted units of housing above the library.
Recommendations
1. Inventory public land. Establish a formal process for the city to continuously inventory publicly owned properties, including surface parking lots, underutilized municipal facilities, and surplus parcels. Building off of the analysis completed as a part of the Housings Needs Assessment, Rockville should evaluate each city-owned property’s suitability for housing, determine whether affordable or mixed-use housing would be appropriate, and consider conveying appropriate sites to mission-driven developers. An inventory would create opportunities to evaluate whether zoning changes would be necessary to fully utilize certain sites and analyze redevelopment potential of existing city assets, future planned capital improvement projects, and development plans.
2. Create policies for the disposition of public land for affordable housing and co-location of affordable housing with new or significantly renovated public facilities. When crafting such policies, it will be important to:
• Establish a consistent process and guidelines for determining which land to classify as surplus.
• Create a competitive process for identifying buyers or development partners.
• Set rental and for-sale affordability requirements in such a way that residential development is still feasible given market conditions.
• Allow land to be transferred for less than the market value.
• Craft parameters for the waiver of affordability or co-location requirements when reasonable.
• Develop a ground lease framework (99-year term) that could be used to maintain city ownership of land while enabling affordable development.
3. Establish structures for internal and external coordination. Implementing such policies will be most effective with a clear structure for coordination between departments - particularly the Department of Recreation and Parks and the Department of Housing and Community Development, as well as outside entities like Montgomery County and the State of Maryland, and WMATA - to inventory other publicly owned parcels within Rockville for potential co-disposition.
Together, these measures would allow Rockville to treat public land as a strategic housing resource and leverage public investments to expand the supply of affordable housing.
Mayor and Council History
Housing is one of the Mayor and Council’s five focus areas. In June 2024, a high-level briefing was presented outlining the city’s housing crisis and policy landscape. Later in 2024, there were three work sessions on the city’s housing strategies, during which establishing requirements for housing to be considered on public land was approved by the Mayor and Council as one of the strategies to further both housing supply and subsidy.
Next Steps
The feedback received from the Mayor and Council will be incorporated into draft policies.