After months of industry lobbying, Montgomery County Executive Isiah Leggett (D) has agreed to a proposal to lower the cost of building permits for three-to-five-story wood-frame apartment projects.
The fee reduction is expected to save builders an estimated $1.1 million annually. It is the second rollback in developer costs recently proposed by Leggett. In September, he asked the County Council to trim charges to builders used to underwrite the IT system in the county’s Department of Permitting Services, which will save the industry about $1.5 million a year, officials estimate.
Because of changes in the market and land-use policies, demand for so-called stick-built projects, which are cheaper than concrete-and-steel structures, has grown sharply. County building codes regard mid-rise, wood-frame apartments as separate structures connected by firewalls, often making them more expensive to inspect than concrete-and-steel high-rises, thus raising the cost of building permits. Under the current fee system, rates drop when estimated construction costs exceed $8 million. But stick-built projects rarely reach that threshold.
After complaints from developers this year, Leggett authorized formation of a Mid-Rise Building Workgroup of county and industry representatives. The group agreed to reduce the trigger for lower permit fees from $8 million to $4.5 million. County officials estimate that the cost of building permits for mid-rise apartments will drop by an average of $330,000 to $400,000 for each project.
In a Nov. 1 letter to Robert Kaufman, director of government affairs for the Maryland National Capital Building Industry Association, Leggett said that after hearing reports from his staff, he was “satisfied that there was a fair sharing and consideration of information, as well as give and take on both sides of the issue.”
Leggett said he will send legislation to the County Council this month calling for the reduction.