• MoCo Council on Path to Revamp Subdivision Staging Policy and Development Impact Taxes
  • November 17, 2016
  • Law Firm: Lerch Early Brewer Chartered - Bethesda Office
  • Real Estate & Land Use Legislative Alert

    The Montgomery County Council took "straw votes" yesterday, November 8 (with the official vote to occur November 15), to overhaul two major policies regulating development in the county -- Subdivision Staging Policy (SSP) and development impact taxes. The SSP and impact taxes are an interrelated set of policies that tether real estate development to the capacity of roads, public transit, and school facilities. The council's vote addressed a wide array of related issues and re-calibrated various tests used to monitor and manage growth in the area.

    Changes to the SSP developed by the Montgomery County Planning Board will divide the county into four color categories: Red areas covering central business districts and metro stations, orange areas for town centers and districts served by other transit such as the highly anticipated Purple Line and Corridor Cities Transitway, yellow areas for lower density residential regions, and green areas for the agricultural reserve and rural districts.

    Highlights include: Council President Nancy Floreen's proposed elimination of the existing school facility payments and several transportation tests and fees in connection with an increase in impact taxes above the planning board's original proposal.

    Under the council's adopted rates, school impact taxes will be lower for single-family detached developments, but will increase for single-family attached and multi-family developments. On the transportation side, "red" areas in central business districts and near metro stations will see the same tax rates while the rest of the county will see increases.

    The council's action also addresses a variety of credits and exemptions available under the law. Notably, although earlier committee-level worksessions had included discussions of discontinuing the current exemption for the bioscience sector, after significant outcry from the development community the council ultimately opted not to eliminate this exemption.

    Also notable was the council's extensive discussion of the county's "Enterprise Zones," which include Long Branch, Takoma Park, and Wheaton. These areas receive special treatment under State law designed to spur growth in certain areas and are currently exempt from impact taxes. The council voted to maintain the current exemptions from both the school and transportation taxes, including for Silver Spring, a former Enterprise Zone.

    The council also began laying the groundwork for future action to develop a plan spearheaded by councilmember Nancy Navarro that would allow the council to decide on its own, independent of State decision making, whether a given area should continue to be exempt from impact taxes.

    The new SSP will apply to any application for a preliminary plan of subdivision filed on or after January 1, 2017. The new impact tax rates will apply to any application for a building permit filed on or after March 1, 2017. For more information, please feel free to contact one of the attorneys in our Land Use practice.