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New laws could depress residential, commercial development


Posted March 9, 2018

Several recent revisions of Adequate Public Facilities Ordinances (APFOs) could create new challenges and some outright barriers to development projects in some parts of Central Maryland. Legislative analysts further warn the new regulations could fuel a broader and longer-term downturn in both residential and commercial development. 

In February, Howard County Council passed legislation that lowers its school capacity threshold from the previous rate of 115 percent for elementary and middle schools (with no ceiling for high schools) to 105 percent for elementary schools, 110 percent for middle schools and 115 percent for high schools.

Set to take effect in July 2019, the new APFO “will immediately put a moratorium on new residential development in at least three quarters of the county,” said Josh Greenfeld, Vice President of Government Affairs for the Maryland Building Industry Association (MBIA). 

A map generated by MBIA shows that large portions of Columbia and Elkridge, nearly all of Ellicott City and Southeast County, and a smaller part of Western Howard County would be closed to residential development due to school capacity. Click here to view the map. 

“It is going to impact everyone in the development process from developers to engineers to builders very significantly,” Greenfeld said. “We process over 1,000 permits in Howard County annually. We suspect that will drop at least by half and probably more.”

In Anne Arundel, the county council also passed new APFOs, lowering the school capacity threshold from 100 percent to 95 percent.

Legislative analysts and development professionals warn the new regulations could do more than depress new housing starts. 

About 15 years ago, Harford County Council adopted “a very low threshold for school capacity and development was shut down,” said Tory Pierce, President of Frederick Ward Associates in Bel Air and President of MDSPE. 

Although the Harford school threshold has wavered between 110 and 120 percent in the years since, “housing development and population growth in our county is at a snail’s pace,” Pierce said. 

The APFO, he added, can deter large companies or government agencies from locating in a jurisdiction because residential development restrictions could prevent workers from finding housing locally.

In testimony to the Howard County Council, Greenfeld warned, “A development moratorium will cripple the economy of Howard County, making financing school construction more challenging, open the County to costly lawsuits, result in cuts to County staff and services, and likely result in future tax increases.”

A development slowdown in Howard County could ripple out to Central Maryland generally, said Tom Ballentine, Vice President for Policy and Government Relations at NAIOP Maryland. “Howard County is important to the regional economy because it is one of the central Maryland counties that is supposed to absorb a lot of jobs and a lot of households.”

And it’s not just school capacity limitations that could depress growth.

The new Howard County APFO also includes heightened requirements to study and mitigate traffic impacts of proposed commercial developments. In particular, the new legislation requires developers to address a two-mile radius around a development site.

“The expanded geographic scope of traffic studies increases the likelihood that development projects will be required to study intersections beyond the traffic shed of the project [and] provide off-site road improvements,” Ballentine told Howard County Council.

That expanded traffic-impact scope could also hold up projects due to conditions on state roads — something that neither developers nor the county could address, Ballentine said. The legislation could also leave some developers paying both the cost of road improvements and county excise taxes that are used to cover the cost of road improvements, effectively paying twice for the same improvement.

Although the adequate roads requirements would not trigger a moratorium on commercial development, they could be “disproportionately burdensome” for some projects and convince developers not to proceed with some plans, he said.

Other proposed regulations could further impact development prospects in Maryland. For example, the General Assembly is currently debating legislation that would heighten requirements for preserving priority forests and could block some high-density, smart-growth projects, such as the Watkins Mill Town Center and a transit-oriented development near University of Maryland College Park, Ballentine said. 

“Politicians need to recognize that regulations can be an impediment to growth,” Pierce said. “They need to require more detailed economic impact analyses of laws before they let them out of committee.”




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