Frederick hopes changes to ordinance will attract more affordable housing
Nov. 3—Frederick's aldermen are hoping that changes to the city's housing laws will help encourage more developers to build affordable housing in the city.
The city's aldermen voted 3-1 at their meeting Thursday night to make changes to the city's ordinance for building affordable housing, known as moderately-priced dwelling units.
Aldermen Derek Shackelford, Katie Nash, and Ben MacShane voted in favor of the changes, while Alderman Kelly Russell was opposed and Alderwoman Donna Kuzemchak was absent from the meeting.
Several of the changes approved Thursday coincide with changes that Frederick County made in 2022 to its laws about MPDUs, including changing the payment for not including affordable units in a project from a flat rate to a fee determined per square foot.
The city's MPDU ordinance previously required developers of projects with 25 units or more to make 12.5% of the units affordable.
But if the developer didn't want to include affordable units in their project, they could pay $16,100 for each affordable unit that would be required. The city could then use that money to help finance the construction of affordable housing units.
The revised ordinance changes the fee for not building MPDUs from $16,100 for each MPDU required to $2 per square foot of every unit in the development, and changes the length of time that a unit must be rented at affordable rates from 30 years to 40 years.
Frederick County currently has a fee of $2 per square foot.
The ordinance also directs the city's director of housing and human services to use data from the U.S. Department of Housing and Urban Development to establish an Area Median Income for a territory that includes Frederick County.
Households with an annual income of between 30% and 80% of that median income will be eligible to participate in the MPDU program.
The ordinance also directs the city's Department of Public Works to begin collecting data on the square footage of new homes sold in the city.
After three years of data are collected, the aldermen will decide on a formula for recalculating the square-footage payment required in exchange for not building affordable units in a project.
Shackelford had worked with a group who included developers, affordable housing advocates, and others to come up with the proposed changes to the ordinance.
He said Thursday that the changes will help incentivize developers to build more affordable housing by basing the fee on the size of projects rather than a flat rate.
But he said there is still more to be done to address the issue.
"This is just one piece of the puzzle, Shackelford said.
Russell said she saw some positive parts of the ordinance, but had some concerns that the new fees would be passed along to buyers or renters.
If they are trying to incentivize more building in the city, having a slightly lower fee than the county would probably be better, she said.
Russell said she wasn't able to support the ordinance as written, and would have liked more time to get information on the thinking behind some of the changes.
The development community was well-represented in the work group that helped create the ordinance, Alderwoman Katie Nash said, and she wasn't interested in making further concessions for builders.
Alderman Ben MacShane said he thinks a fee per square foot is a better way to go than a flat fee, and it might encourage developers to build more small units, which generally are more affordable.
Now, developers pay a fee that's the same whether they're going to build smaller units or larger luxury units, he said.
Under the new rules, someone can still build bigger units if they want to, but they're going to pay more into the city's MPDU fund, he said.
Follow Ryan Marshall on Twitter: @RMarshallFNP
