For Stronger Communities, Baltimore City Needs Effective Affordable Housing Requirements for Developers

In order to provide greater opportunity for all city residents and address the lack of affordable housing, Baltimore City needs an effective policy requiring developers to include a certain number of affordable apartments or houses in new development projects.

This week, the City Council is considering a new “inclusionary housing” policy to replace a law that expired in June and had largely been ineffective at generating new affordable units. Inclusionary housing laws generally require developers of certain projects to set aside a percentage of new units to be more affordable and help create more socioeconomically integrated communities.

The old law was enacted in 2007 and only generated 37 housing units in the 14 years it was in place. Loopholes and waivers city officials granted to developers rendered the law to be largely ineffective, so the majority of new housing projects did not provide affordable units and were built in communities that are higher income, majority White residents, thereby reinforcing segregation within the city.

This week the City Council begins considering legislation, Council Bill 22-1095, that would create an estimated 1,000 new affordable units over the next decade. This proposed legislation gives Baltimore the opportunity to break with development policies that subsidized segregation and separate-and-unequal development and create a more equitable, integrated future.

Inclusionary housing is an essential tool for building more affordable, integrated neighborhoods in Baltimore City. Under the proposed bill, if a developer is receiving a major public subsidy or significant zoning change, they should make at least 10% of the new apartments or houses they are building affordable to households earning no more than 60% of Area Median Income (AMI), plus an additional 5% of units affordable at even lower incomes if the city offers the developer additional subsidy to do so.

For an inclusionary housing policy to be as effective as possible, it is essential that there are no waivers or exceptions like those that plagued the city’s prior inclusionary law and made it ineffective. It is also vital that the law apply to the entire city, not just select neighborhoods.

There is a housing affordability crisis in Maryland. According to the Maryland Housing Needs Assessment & 10 Year Strategic Plan, nearly one-third of all Maryland households are experiencing unaffordable housing costs. Of these, 67% are homeowners while 33% are renters. Among renters, 48% of households are cost burdened, and among low-income households, 76% are severely cost-burdened. The latest “Out of Reach “report from the National Low Income Housing Coalition lists Maryland as the ninth least affordable state for renters. To afford a modest two-bedroom apartment in the state, a family must earn $28.93 an hour or $60,183 annually. A minimum wage worker in Maryland would have to work 78 hours per week year-round.

MDCEP is a member of the coalition of nonprofit organizations and Baltimore residents who have been working with council members on the proposed legislation and supports the coalition’s recommendations for the most effective inclusionary housing policy:

Do not reduce the very limited affordability required – no rental units above 60% AMI. 60% AMI ($55,740 for a family of two) is already based on a regional assessment of income. Average incomes in Baltimore City are already much lower than the region. 60% AMI allows frontline workers and persons who use housing vouchers to access the affordable units. Raising this threshold to 80% AMI would place those units beyond the reach of voucher holders and many frontline workers.

• Maintain strong oversight and accountability. The inclusionary housing board should remain in the bill. The prior inclusionary law suffered from weak oversight and implementation. A robust board is needed to maintain transparency and accountability.
• No Fee-In-Lieu. CB 22-0195 creates affordable housing opportunities that are integrated into communities. Allowing developers to opt out of the law by paying into a fund would facilitate the creation of affordable units that are not well integrated into communities – thereby repeating the mistakes of our city’s long history of subsidizing segregated affordable housing.
• Maintain strong affirmative marketing. Sponsor amendments will ensure that developers affirmatively market the affordable units to groups that have historically been excluded from the benefits of new development and then hold the developers accountable for doing so.

Baltimore City spent $38 million on tax subsidies for market rate development in the last budget year and got zero affordable units in return. Baltimore will have given $73 million from one special tax break alone to apartment developers from fiscal years 2014 through 2023. Almost all 6,621 units created with this subsidy are luxury, non-affordable units located in predominantly white, high-income neighborhoods. Virtually none of the units are affordable.

The proposed legislation is modeled on best practices from around the country. Inclusionary housing laws in the United States have created 110,000 housing units in 258 programs, mostly since 2000. The proposed policy will place fewer restrictions on new development than successful ordinances in Pittsburgh, Philadelphia, Chicago, the District of Columbia, and Montgomery County, so concerns that it will slow development in the city are unfounded.

When families struggle to pay rent, they face greater risks of instability, eviction, and even homelessness, which research links to food insecurity, poor health, lower cognitive scores and academic achievement, and more frequent foster care placement among children. Seniors and people with disabilities living on fixed incomes cannot live safely without affordable housing and supportive services.

Unaffordable housing and housing segregation also perpetuate racial, economic and health disparities in our state. If we want to foster communities that offer opportunity for everyone, whether white, Black or Brown, we must begin with housing.

Inclusionary housing provides all Baltimore residents the opportunity to participate in Baltimore’s redevelopment as the integrated, equitable city that we deserve. You can show your support for inclusive housing policies by sending a letter to city council in support of passing the bill and calling your city officials to encourage them to support the bill.