The Economic Matters Committee on Oct. 15 gave a favorable recommendation to O37-25, an ordinance that would allow small housing developments of six or fewer dwellings to pay city water and sewer facility charges at the time an occupancy permit is issued rather than up front.

Sponsor remarks said the change was modeled on Montgomery County legislation and is intended to lower barriers for small-scale “missing middle” housing such as duplexes, triplexes and small rowhouses. The sponsor told the committee the ordinance is intended to make financing easier for developers who build a small number of units and to complement the recent Tyler Avenue plan encouraging small-scale development.

The proposed ordinance sets the threshold at six or fewer dwellings and includes a penalty provision recommended by Planning and Zoning to deter builders from occupying structures before fees are paid. The sponsor told the committee the penalty was added to ensure the city can still collect required capital fees if a developer attempts to occupy units before paying the deferred fee.

Committee members asked staff about operational concerns; the sponsor said the language was negotiated with the planning and zoning director and represents a compromise. Alderman Savage said he supported the measure, calling its timing “good” given recent planning actions to encourage small-scale housing. The committee passed a motion for a favorable recommendation by voice vote (mover/second not specified).

If approved by the full council, O37-25 would change the timing of when the city’s capital facilities charge for water and sewer is due for qualifying small developments. The ordinance as described in committee does not remove the obligation to pay the fee; it only moves the payment to the back end of the development process and adds enforcement language to protect city revenue.