The Montgomery County Council voted unanimously Tuesday to approve the county Planning Board’s proposed Growth and Infrastructure Policies (GIP) that will help govern county development for the years 2025-2028.
The policies are adopted by the council periodically to enforce the county’s Adequate Public Facilities Ordinance. The purpose of the ordinance is “synchronizing development with the availability of public facilities needed to support that development,” according to the council agenda packet.
“We have taken quite a bit of time to work through these issues,” council President Andrew Friedson (D-Dist. 1) said prior to Tuesday’s vote. “We’ve received significant input from the executive branch as well as from the broader public and our relevant outside departments and agencies.”
The new policies become effective Jan. 1 and apply to any development application submitted on or after that date.
The policies follow the same general framework over time but are tweaked and updated every four years to ensure the tools used for evaluating the impacts of development reflect the latest growth patterns and trends in the county. The policies also help determine if the county’s public infrastructure can meet the demands of certain development. The Planning Board produces the policy proposal for council approval.
The biggest way that the policies are changing from previous years can be seen in how the 55-page Planning Board proposal focuses heavily on the goals of the Thrive Montgomery 2050 plan, a 2022 update to the county’s general master plan that is expected to guide development for the next 30 years.
The Thrive plan focuses on topics such as where growth should occur in the county and what type of housing is needed. Other topics include transportation networks, what new communities should look like, how to grow arts and culture and the future of county parks.
“A growing, diverse community requires a mix of housing that is attainable for different income levels and household sizes,” the Planning Board’s GIP proposal abstract says. “This housing must be accessible to jobs and other amenities through timely public infrastructure that also helps attract economic development and enhances environmental health and sustainability.”
Following Tuesday’s vote on the policies, the council also voted to approve new development impact tax policies, which are directly impacted by the size and geographical designations in the GIP. The taxes, paid by developers, help fund local school and transportation infrastructure. The designations and rates differ based on the location of a proposed development, as illustrated in maps attached to the council’s resolution.
Development impact taxes directed to school spending are calculated for new housing developments based on estimated school construction costs as well as the expectation that new housing will generate new students. The taxes are used to help offset the costs associated with increasing school capacity.
“We did not support proposals for exemptions to the school impact taxes, but we did make changes and support, in most instances, exemptions from the transportation impact tax,” council Vice President Kate Stewart (D-Dist. 4) said Tuesday.
Under recommendations made by the council yesterday, developers of certain projects, including bioscience projects and office-to-residential conversions, will be exempted from paying development impact taxes. These exemptions were created in order to incentivize developers to pursue these specific types of projects, according to council staff.
According to the county’s Office of Management and Budget, impact taxes comprised just 7.4% of spending for school capital costs and 5.3% of transportation capital costs in fiscal year 2024. In a report to the council, the budget office estimated the taxes will not be enough to help offset the demand for school and transportation infrastructure, and that the county will likely have to increase its spending in these areas.
“It is important to note it is unlikely impact tax incentives have a significant effect on influencing the rate of development beyond other factors in the economy,” the Office of Management and Budget report said.
The council also recommended, as part of the GIP, that the county convene a working group to explore additional funding mechanisms beyond development impact taxes to better meet infrastructure needs.
Stewart said the working group was proposed in part because councilmembers and staff found that they were using outdated data while creating the policies. This working group would begin to reevaluate the goals and composition of the development impact taxes in the interim period before the next policy cycle.
“I know while we may have some differences of opinion on the council, I think we can all agree that how we approach our impact taxes needs to be reviewed,” Stewart said.