Committee forwards ZTA 25-05 to full council after debate over incentive zoning changes

Montgomery Countys Planning, Housing and Parks Committee on June 16 voted 3-0 to report Zoning Text Amendment 25-05 to the full County Council after a work session in which staff described a data-driven overhaul of incentive zoning and members flagged economic and equity trade-offs.

Committee chair Arty Harris opened the session by saying the item continues months of work that have turned earlier recommendations into the current ZTA. Council staff member Ms. Nadeau summarized public testimony as "largely in support," noting backing from the Agricultural Advisory Committee and Agricultural Preservation Advisory Board for stronger TDR and BLT requirements, support from the Bethesda Arts and Entertainment Board for expanded public-art incentives, and comments from the countys departments urging technical changes.

Atul Sharma, project manager for the planning staff, described the proposed system as a calibrated, menu-based approach that requires applicants using the optional method of development to provide public benefits in return for incentive density. "The whole menu has been calibrated to be one sort of thing," Sharma said, explaining that consultants and staff modeled costs and feasibility across representative development prototypes so tiers of benefits produce roughly equivalent public-value outcomes.

Under the ZTA, incentive density is explicitly defined as the difference between the standard-method maximum and the mapped FAR; the new public-benefit framework groups benefits into four tiers and four categories (two countywide priorities Housing for All and Environmental Resilience and two local needs tied to master plans). Tier 1 yields roughly 0.25 FAR, Tier 2 about 1.0 FAR, Tier 3 1.5 FAR, and Tier 4 can satisfy an applicants requested incentive density.

One substantive change adopted in the draft is lowering the optional-method threshold in CRT zones from 1.0 FAR to 0.5 FAR so more CRT projects must provide public benefits. Ms. Nadeau and the chair said the move could be the most impactful change for residents and property owners because many CRT parcels are adjacent to residential neighborhoods.

The ZTA would require optional-method applicants to either purchase Building Lot Terminations (BLTs) or make an equivalent payment to the Agricultural Land Preservation Fund (ALPF), or use an equivalent value of transfer development rights (TDRs); the Office of Agriculture would set payment amounts by regulation. Ms. Nadeau told the committee the payment-in-lieu rates will use the Baltimore construction cost index for consistency with other local impact rates.

The draft also removes optional-method development from the LSC and EOF zones, largely life-science and employment areas where most parcels do not reach the threshold; those projects will instead face a site-plan review trigger above 0.5 FAR, staff said.

Council members spent substantial time on how the ZTA interacts with the countys MPDU rules and a separate pilot that provides a 20-year property-tax abatement for projects that offer 17.5% MPDUs. Sharma said MPDU-based incentive calculations were modeled into tier thresholds: for example, a project that provides 15% MPDUs could earn roughly 1.25 FAR under the proposed tiers, while higher MPDU commitments rise the tier level. Council members worried the pilots abatement and the ZTAs incentive-density benefits could amount to a double incentive; Jay Brown, the planning consultant, cautioned that office-to-residential conversions are costly and often require significant subsidy.

"It's very challenging right now to repurpose an office building into housing," Brown said, noting that the tax abatement likely plays a substantial role in feasibility and recommending further numbers and scenarios.

Members asked planning and council staff to return with narrow, scenario-based analyses showing how layering the pilot abatement, MPDU commitments and the ZTAs tiers would affect feasibility and housing yields. The committee also adopted a clarified grandfathering provision for CRT parcels to avoid changing the rules mid-process: in-process applications filed on or before the effective date (including sketch plan, preliminary plan, site plan, local map amendments, record plats or building permits) would be reviewed under the greater of 1 FAR or 10,000 square feet of gross floor area based on the FAR at the time of original approval.

Staff told the committee the ZTA will be supplemented by implementation guidelines (to be adopted by the Planning Board after public hearing) that define terms, list examples, set application requirements and include criteria for alternative compliance and for qualifying Tier 4 projects tied to master-plan priorities.

After agreeing to several technical edits (including updating LEED references to the most recent version at approval and citing the International Green Construction Code where appropriate), the committee "positively reviewed" ZTA 25-05 by voice vote and forwarded it to the full County Council for consideration. The committee recorded full consensus on the package and a "bring-back" item for additional financial modeling and scenario analysis to inform the council vote.

The committees action advances the ZTA to the next legislative step; planning and council staff will return with the requested scenarios and any drafting adjustments before the full council takes up the measure.