Housing Secretary Jake Day, along with housing directors Terry Hickey of Baltimore County and Scott Bruton of Montgomery County and, from left, were among state and local officials focused on building new housing units at a panel Friday. (Photo by Danielle J. Brown/Maryland Matters)
State and local housing and planning officials say there is an urgent need to build more housing supply to start bringing down Maryland’s skyrocketing housing costs as soon as possible.
But there are two major hurdles for getting those projects started: financing new affordable housing projects and navigating through gummed-up permitting processes, according to two different housing-related forums at the Maryland Association of Counties summer conference Friday.
State officials on both panels said that counties should consider ways to boost financing options or speed up the permitting process if Maryland is to start chipping away at the estimated 100,000 housing unit shortage.
In a panel focused on speeding up county-level permitting for new development, Planning Secretary Rebecca Flora said department officials learned other states improved their permitting timelines by simply making the process more transparent while creating a report released this year.
“Transparency solved a huge part of the problem,” Flora said, “because once you have a transparent system of tracking a project that others can see and everybody knows what’s going on, they had some pretty significant gains.”
She added that the process can get gummed up because local agencies and developers may have different interpretations of the same building regulations, delaying the approval of a development until they come to a mutual understanding.
But for Pete Gutwald, director of permits approvals and inspections for Baltimore County, counties should simplify permitting processes to reduce delays in approval due to user error.
“The large projects have sophisticated teams that know how to work the system,” he said. “It’s actually the nonprofits, the smaller projects, the folks that are just getting started that are having the most challenges. And we really need to find ways to simplify, at all levels, because otherwise, that small business, those small projects … are the ones that are going to continue to have hurdles.”
Following the panel on permitting, Housing Secretary Jake Day focused on financing challenges facing affordable housing projects.
He said that affordable housing specifically is challenging to get off the ground compared to houses priced by the market. The lower rent that comes in from affordable housing development will not fully cover the cost it took to build new units.
“The development costs are the same-ish,” Day said, referring to both houses on the market and affordable housing options. “But there is a big financing gap that exists and … makes affordable housing more difficult to finance.”
The state Department of Housing and Community Development has several programs to help fill in that financing gap, but Day said state housing officials are looking to counties that have successful affordable housing financing programs to see what policies could be expanded to a statewide capacity.
“We have to make up the difference between what it costs in the market and what the revenue that’s produced from reduced rents from affordable housing,” Scott Bruton, director for the Department of Housing and Community Affairs in Montgomery County.
Financing new units and speeding up permitting for those builds may boost supply and, in theory, slow the rising costs of housing a few years down the line – but those policies do not address the housing need of today.
Matt Losak, executive director for the Montgomery County Renters Alliance, raised that very issue with the panel, particularly for the rising number of Marylanders who are stuck renting because home ownership is financially out of reach.
“We’re just very concerned about that population that’s not going to buy a house any time soon,” he said.
Day agreed that the cost of rent is also soaring, and that the conversation around building new housing can include conversations on protecting renters too.
“We can’t build our way out of the problem, but I think we also have to say that we must build our way out of the problem,” Day said. “That is a part of the picture … There also needs to be rental protections. There also needs to be subsidies provided. There also needs to be regulations that protect our vulnerable populations.”
Originally published at Marylandmatters.Org