Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Housing Policy topic
No spam. Unsubscribe anytime.
Joint committee backs 20‑year tax‑abatement pilot to convert vacant commercial buildings to housing
Summary
A Montgomery County joint committee amended and recommended Bill 2‑25, a pilot providing tax abatement for converting high‑vacancy commercial properties to residential use; members raised affordability and feasibility concerns and settled on a 17.5% MPDU minimum, a 20‑year abatement, a 10‑year sunset, transition language for projects already in process, and technical clarifications.
Montgomery County’s Government Operations & Fiscal Policy and Economic Development committees on Tuesday recommended sending an amended version of Bill 2‑25 to the full council that would create a pilot offering tax abatement to developers who convert high‑vacancy commercial properties to housing.
Council President Stewart opened the joint session by saying the committees would examine whether the pilot’s terms—such as the share of affordable units and the length of the abatement—would provide enough incentive to spur conversions while protecting county finances.
The bill as introduced would have required conversions of properties with at least a 50% vacancy rate to set aside at least 15% Moderately Priced Dwelling Units (MPDUs) for households at 60% of area median income (AMI) and would have exempted 100% of real‑property tax for 25 years. Council staff noted the proposal is linked to companion zoning text amendments (ZTA 25‑03) that set expedited review timelines for qualifying conversions.
A central point of debate was how to balance the percentage of MPDUs against their depth (AMI targeting) and the abatement length so projects remain financially viable. Council Member Friedson, who moved the MPDU increase, argued the pilot must be attractive enough to induce conversions and said projected offsetting revenue streams (income taxes, impact taxes, fees and future property taxes) made the incentive defensible. "We are foregoing property tax revenue, but we are increasing dramatically income tax revenue," Friedson said.
Council Member Sales urged stronger protections for deeply affordable housing, proposing a 30% MPDU floor with a split of 15% at 60% AMI and 15% at 30% AMI. Sales cited local project experience and sharply higher rents at some recent conversions, saying, "For a three‑bedroom apartment, it's upwards of almost $11,000 a month," as an example of why depth matters. That larger amendment did not receive a second and was not advanced.
After discussion, the committees amended the pilot to require a minimum of 17.5% MPDUs (up from 15%) and approved that change by unanimous voice vote among members present. The committees also reduced the abatement period from 25 years to 20 years, another amendment that passed with the members in the room voting to approve it, and added a 10‑year sunset so the county can evaluate the pilot’s return on investment.
Council Member Glass successfully offered a transition (retroactivity) amendment so developments that already have planning‑board site plan certification may qualify if they meet the bill’s substantive requirements and meet specified permitting milestones (for example, obtaining a building permit that includes the core and shell within prescribed timeframes). Staff said the transition language avoids forcing applicants to reapply through the expedited planning track and was adopted unanimously.
The committee also discussed whether the pilot should extend to for‑sale units; staff cautioned that the state enabling language references rental projects and that county mechanics for conveying an abatement on sold units are unclear. Council Member Sayles asked staff to research ways homebuyers could benefit and indicated the matter could be revisited at full council.
A final, technical staff amendment clarified how vacancy and timing are measured depending on whether a conversion requires planning site‑plan review or only Department of Permitting Services review; that technical change carried forward the earlier amendments (17.5% MPDUs, 20‑year abatement, 10‑year sunset). After taking a final voice vote on the amended bill, the joint committee forwarded a recommendation to the full council. Council Member Sales recorded an abstention on the final recommendation.
The packet now goes to the full Montgomery County Council for a final vote; staff said the packet will include the amendments on MPDU percentage, abatement length, sunset, transition language and the technical clarifications.
