In 1974, Montgomery County, Maryland pioneered inclusionary zoning practices when its County Council enacted a law establishing the Moderately Priced Dwelling Unit (MPDU) program. The MPDU law required any developer applying for subdivision approval, site plan approval, or building permits for construction of 50 or more dwelling units at one location to ensure that 15% of the units were MPDUs. In exchange, developers were offered density bonuses of up to 20%, allowing them to develop a greater number of units than zoning ordinances permitted.
During the late 1960s and early 1970s, housing advocates, citizen groups, and political leaders grew concerned that the majority of new housing in Montgomery County was being marketed to high income households, and that moderate and low income households were facing a shrinking supply of homes affordable to them. Beginning in the early 1970s, advocacy groups, such as Suburban Maryland Fair Housing and the League of Women Voters, began organizing efforts to establish an ordinance that would require builders to supply a percentage of newly developed residential units at prices affordable to moderate and low income households.
The MPDU law has been in effect in Montgomery County since its enactment in 1974, and has never been challenged in court. It has been amended several times; it currently requires that between 12.5% and 15% of homes in new developments of 20 units or more be MPDUs. When the program was established, affordability of both rental and homeownership MPDUs was controlled for five years. Today, the control period is 30 years for homeownership MPDUs and 99 years for rental MPDUs. In 2014, a household must earn between a minimum of $30,000 and a maximum of $81,000 to rent an MPDU (the maximum income limit is based on household size and unit type). To purchase an MPDU, household income must be between $35,000 and $81,000. Income limits for the program are updated annually.
As it currently stands, the program also requires that 40% of newly developed MPDUs first be offered for sale to the Housing Opportunities Commission, Montgomery County’s public housing agency, and to non-profit housing providers.
The MPDU program has produced approximately 12,500 units of housing affordable to moderate and low income families since its inception. However, as Montgomery County becomes more urban and nears its capacity for new development, MPDU production has decreased, and cannot compensate for units lost due to initially short periods of affordability restriction. While the program remains an important source of housing affordable to low and moderate income people in the county, these factors stress the reasons inclusionary zoning programs are but one tool for affordable housing development.
The MPDU law was the first of its kind. Today, more than 400 cities, towns, and counties implement inclusionary zoning programs. When the Montgomery County Council enacted the program, Councilmember Sidney Kramer said, “We realize that we are testing a new approach to an ancient problem and, as many people resist change, some may be dubious about our MPDU legislation; however, they are a small minority as comments on this legislation have been generally optimistic. The entire State and, indeed, many communities across the country are watching our actions this morning.”
Historical information for this article is from “Strengthening the Moderately Priced Dwelling Unit Program: A 30 Year Review,” a 2004 report to the Montgomery County Council on future funding and policy options.
View additional MPDU program information from the Montgomery County Department of Housing and Community Affairs at: http://bit.ly/1lF9tr0
NLIHC will mark its 40th anniversary throughout 2014, culminating in a commemorative event on Monday, November 17 in Washington, DC. Please save the date.