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Affordable housing bill passes

The Baltimore Sun

Afraid that Baltimore's real estate might one day become as pricey as Washington's - squeezing out the working class - the City Council approved last night legislation requiring developers to include affordable housing if their projects receive city aid.

By forcing developers to include a percentage of low-cost apartments or houses in certain projects, the inclusionary housing bill attempts not only to create more affordable places but to make sure they aren't clustered in certain parts of the city.

The measure's passage represents a hard-fought victory for a coalition of city religious groups, urban advocacy organizations and unions that have lobbied for nearly two years.

Those advocates are quick to acknowledge, however, that the bill is less than perfect - its loopholes and insubstantial funding leave questions about how many affordable homes really will be created. They tend to call it a "first step" rather than a solution.

"I think it's a very important step for the city to be forward looking as to the way development is going to happen over the next decades," said the Rev. Karen L. Brau, pastor of East Baltimore's Amazing Grace Evangelical Lutheran Church and part of the coalition. "This is a visionary step that over time will bear more and more fruit."

In Maryland, the only other jurisdictions with similar affordable-housing requirements are Montgomery, Frederick and Howard counties.

Despite the backing of a coalition with such political sway, City Hall has had a hard time accepting the proposal, mainly because of fears it would chill development.

In 2005, a similar bill died amid a flurry of questions and opposition. When this measure was introduced late last year, the real estate community rallied in opposition and some city agencies, including planning, housing, finance and law, said the bill was "undoable" and that it went too far.

The painstaking attempt at a compromise among the coalition, developers and the city is visible in the 100 amendments tacked onto the legislation the council approved last night. It's an extraordinarily high number of changes, indicative of the spirit of concession surrounding the bill - something no one really loves, but everyone can live with.

Though the original bill would have required affordable units be built into all residential projects, the revised version would first apply only to developers getting tax breaks or discounted land from the city. Developers who apply for permits over the next 18 months would not be forced to participate.

The subsidized builders would have to reserve 20 percent of their projects' units for low- to moderate-income residents.

That the poorest people are guaranteed at least some of the affordable slots is a part of the bill that pleases the coalition most. What prices constitute affordable housing is outlined in the legislation.

"It really makes an attempt to make sure units are created for the hardest-working and lowest-paid people in the city," said Bibi Hidalgo, housing director for the Citizens Planning and Housing Association, which led the effort for the bill.

A year and a half after the bill takes effect, it would also apply to developers who benefit from rezonings. They would have to make 10 percent affordable.

The measure would expand to include projects not receiving subsidies or zoning changes only if most of the houses in the city's market become unaffordable under an equation detailed in the bill.

Those who build homes and sell them are resigned to the law - though they doubt it will do much and worry that what they consider to be extra bureaucratic red tape could deter people from investing in the city.

"It seems like people aren't really concerned about the details," said Joseph T. "Jody" Landers III, executive vice president of the Greater Baltimore Board of Realtors. "They embraced the concept. It's the attitude of, 'We'll do this, and we'll see how this works.'"

A key aspect of the bill is that the city would compensate affected developers for any expenses. The city would offset costs by giving builders subsidies, density bonuses and cash payments from a new inclusionary housing trust fund.

With only $2 million from Baltimore's budget to fill the fund in its first year, the money likely won't go far. If the fund runs dry, developers would be exempt from the regulations.

Developers, particularly those building luxury housing, could also be let off the hook if the city can't afford to pay them back with tax breaks or discounted land.

Councilman Edward L. Reisinger said before the vote that if the program is successful, he hopes the city will find more money for it. In the meantime, he said it's a start. "Right now," he said, "we have nothing."

Councilwoman Mary Pat Clarke said the bill is almost more of an "important sign" of the city's intentions than a change agent in and of itself.

"It will begin a heightened awareness among developers of the mission of the city for mixed-income housing," she said. "It will stop being a strange concept and begin to be how one does business."

Inclusionary housing

Here's how a proposal approved last night by the City Council would work:

Starting in 18 months, developers getting tax breaks or discounted land from the city will be required to set aside 20 percent of units for low- to moderate-income residents.

A year and a half later, developers whose projects benefit from rezonings must make 10 percent of their units affordable.

If most of the city's housing market became unaffordable under an equation in the bill, all development projects would be required to set aside 10 percent.

The city would compensate affected developers for their expenses from a new trust fund. In the first year, $2 million has been set aside.

[Source: Baltimore City Council]

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