ANNAPOLIS, MD - Nearly four years ago Annapolis passed a law requiring developers to include affordable housing in their plans. Now, developers say the rule is mired with obstacles that discourage them from starting projects in the city. One effort has already failed and some builders are now avoiding the city altogether. "I do think there are developers outside the city who just don't want to deal with it," said Tom Smith, the city's chief of current planning.
In June 2004, Annapolis passed a moderately priced dwelling unit bill that requires developments of 10 or more units to offer 12 percent of for-sale housing or 6 percent of rentals at moderate prices. City leaders designed the law as a defense against the high-cost housing market in Annapolis, where prices refuse to dwindle even in an economic downturn. Last month, the median sale price in the 21403 ZIP code in January was $560,000, typically leaving firefighters and other civil servants out in the cold.
Although a city building moratorium stifled progress of larger projects and poorer market conditions put a 105-unit condo development on hold, there are still eight developments sifting through the city's approval pipeline to create roughly 50 affordable homes. The largest yet will take shape on a 40-acre swath of land near Quiet Waters Park, where Severna Park developer Milt Horn plans to build a 150-unit community along Annapolis Neck Road. Mr. Horn, who acquired 22 parcels of the former Kent family property from 16 owners, is working out details on exactly how many moderately priced units he will provide.
His plan is to tear down the vacant ramshackle homes on the property and transform it into a community where police officers and teachers may one day find homes they can afford. "The city has been great," he said. "They want this to happen. I would like to see this happen." But from a developer's perspective, building moderately priced units can mean barely breaking even or even losing money on a deal. Many local developers said they believe the city's law has good intentions - to provide teachers, police officers and plumbers with places to live where they work. But they said the law's main stumbling block lies in the very incentive for building the units in the first place.
Under the law, the city provides a "density bonus" allowing builders to construct more homes than normally allowed, helping them offset the cost of providing moderately priced units. Because of various restrictions in city zoning districts - environmental laws, height rules and open space regulations - most builders can't meet the maximum density requirements to earn the bonus. "It's a problem," said Alan Hyatt, chairman and president of Severn Savings Bank who also is a land developer and a partner of the condo project that's on hold. "I think there needs to be some serious discussion about these types of things, not only to provide needed affordable housing, but to help the overall economy in town, to get people living here, working here."
Mike Miron, director of the city Department of Economic Affairs, said providing builders with property tax credits could be an alternative solution. "I think it could have a lot more potential," Mr. Miron said of the law. "It's meant to cover everybody, but it can't really cover all circumstances." The only project that cinched a density bonus since 2004 is Washington Square, a 16-unit development in Eastport that will provide two moderately priced homes. A joint venture between Bernie Schultz Realty and K&P Eastport LLC, the project has progressed this far thanks to a combination of factors: the bonus, community and city zoning support, and a split-zoned lot that helped the project achieve more density, said Bernie Schultz.
"I had over 25 meetings, I had
Source: HometownAnnapolis.com