Montgomery County residents, builders clash at public hearing over proposed $20,000 demolition tax

Montgomery County Council held a public hearing on Bill 5-25, a proposed excise tax on certain demolitions and renovations of single-family homes intended to generate revenue for affordable housing programs.

Supporters told the council the tax would fund the County’s Housing Production Fund (HPF) and help produce permanently affordable housing. Rohit Khanna, a member of the Somerset Town Council, said the HPF is “a very efficient model to finance and develop publicly owned, self sustaining, mixed income, good quality and permanently affordable housing,” and urged the council to consider combining demolition-tax revenue with additional appropriations to deliver more units.

The bill matters because demolition of older, smaller homes and replacement with larger, higher-priced homes is one mechanism that can reduce affordable housing supply and increase school enrollments in…