Maryland ‘Was Getting in the Way’ of Affordable Housing, Governor Says in Signing New Laws

Marylanders will soon be able to live closer to mass transit as a new state law clears the way for the development of thousands of new housing units.

Gov. Wes Moore signed the Maryland Transit and Housing Opportunity Act on Tuesday morning. It's a measure that prioritizes redevelopment projects around major transit lines. Starting in 2027, these areas will be designated enterprise zones and get favorable tax and financing treatment.

"We don't just have a housing shortage in Maryland, we have a housing crisis in Maryland," Moore said in an Annapolis bill-signing ceremony. "It's not just that the state, before, wasn't trying to solve it. It's actually that the state was getting in the way of trying to fix it."

The state is eyeing about 300 acres for development, where it can add 7,000 housing units. Much of the land is around Maryland Transit Administration's light rail stations in Baltimore and the under-construction Purple Line just outside Washington, DC.

The state also passed a companion legal measure, the Maryland Housing Certainty Act, which exempts housing developments from new restrictions enacted after they gained approvals.

The Maryland Association of Realtors and the Building Industry Association of Maryland, which represents homebuilders in the state, supported both bills.

Building with more certainty

The transit bill is intended to make it easier to build within a quarter-mile of a transit station. That land is now designated an enterprise zone, which means Maryland Economic Development Corp. prioritizes it for money from its infrastructure loan program.

Localities won't be able to enact parking requirements or land-use provisions that block development near transit. Future zoning decisions also have to allow mixed-use development near transit stations. The new law also blocks excise and impact fees, outside of water and sewer system costs.

Meantime, the Housing Certainty Act stops retroactive laws from delaying housing developments. That's a response to developer complaints that new rules get created that force them to change developments midconstruction.

Those changes drive up the costs of housing, state Senate President Bill Ferguson (D-Baltimore) said in expressing support for the bill.

"Once a project is underway, the rules don't move out from under it and kill the rules the homes are counting on," Ferguson said of the new law.

Maryland's scaled-down housing reform

The Maryland Legislature passed 275 bills this past session, including a few aimed at affordability. But the state had to pare down its plans for major housing reform this year. Several other ambitious bills aimed at facilitating housing construction didn't advance out of committee.

Most prominently, lawmakers championed the Starter and Silver Homes Act, an effort to stop local governments from enacting zoning laws to block development. The bill is intended to encourage more "starter homes" on small lots. Maryland is one of over a dozen states to consider such legislation, which supporters say cuts red tape.

But that bill also triggered a revolt in urban areas that feared the bill would curtail their power to control the character of development.

A few other bills failed this year, including one requiring inspections on homes served by septic systems. Another tried to increase by-right development of duplexes, triplexes, quadplexes, and townhomes in single-family areas. And another bill aimed to create faster processes to approve housing permits.

The state-by-state housing affordability report card from Realtor.com® gives Maryland a B-. And Maryland officials estimate 15 years of under-building has left the state with a shortage of 100,000 homes.

State housing leaders say geographic challenges are a factor. Many Marylanders live close to job centers in Pennsylvania, Virginia, and the District of Columbia, and the state often loses young workers, and their tax revenue, to more affordable areas out of state.

Still, the state's population is now growing faster than it has in the past decade, Moore said.

"Our people should be able to live where they aspire and where they hope to be," Moore said.

New laws around housing

About 40 laws related to real estate were passed in the Maryland Legislature this year, and the Maryland Realtors group supported most of them.

Among them is a new law that prohibits long-term homeowner service agreements. Another new law expands flood risk disclosure.

And a third new law expands the return-of-deposit procedures when buyers want to back out of a contract, as well as mediation procedures for homes under contract.

All of those new laws go into effect later this year.