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The balance between affordable and market rate housing is tricky. So is the balance between charging fees to pay for housing projects and keeping development costs competitive in a given area. In an attempt to maintain competitive balance, some city and county governments are lowering or waiving housing fees in hopes of encouraging more development.
Commissioners in Frederick County, Maryland, for example, recently voted to waive impact fees for affordable housing developments, in an effort to reduce project costs and make the area more attractive to developers. One of the commissioners also indicated that he could move toward eliminating or reducing all impact fees next year. The measure passed by a 3-2 vote, but included a stipulation: A nonprofit organization must develop the project and the home must be priced for residents earning 60 percent or less of the area median income. .
Housing advocates view the decision as an important step toward making more affordable housing available in Frederick County. Habitat for Humanity’s executive director for Frederick County said the waiver could save them up to $30,000 in fees, and that’s before they start a project.
The only real pushback on the decision came from a commissioner concerned about how the loss of revenue will affect the county. While the removal of the fee is good for developers, there is currently no budget offset to make up for lost revenue. The presiding commissioner, however, believes the limited scope of the waiver will have minimal impact on the county’s budget. The affordable housing impact fee waiver went into effect at the beginning of the year.