Montgomery County officials on Thursday ceremonially broke ground on an affordable housing project in Silver Spring that will add 195 “deeply affordable” homes to the county’s housing stock.
The project will include 85 three- and four-bedroom units, which are particularly difficult for low-income families to find. Although for-profit developers are required to make a certain percentage of new units affordable in Montgomery, they are not required to make large apartments affordable, said Elrich (D). County funding and property tax assistance helped the nonprofit developers to finance the project to focus on creating affordable housing for low-income families, he added.
“It allowed us to achieve things this county just flat-out doesn’t get otherwise,” he said.
AHC will build 168 rental units across six buildings and Habitat for Humanity will construct 27 homes for purchase, including 24 garden-style condominiums and three detached single-family homes.
The rental units will be affordable for households that make between 30 to 60 percent of the area median income, which is $42,700 to $85,380 for a family of four. The condos will be affordable at 30 to 50 percent of the area median income and the three single-family homes will be affordable at 70 percent of the area median income.
“We are building deeply affordable homes for families unable to secure conventional mortgage financing due to market pressures,” said Jeffrey Dee, president and CEO of Habitat for Humanity Metro Maryland.
Elrich, who has been characterized as anti-development by some critics, said his office is also working to advance plans to work with nonprofit developers to build additional affordable housing projects on 18 sites of county-owned land that serve as parking lots.
Still, the county’s need for affordable housing in the coming decades far exceeds the nearly 200 units being built on Randolph Road. A 2020 assessment of the county’s housing needs estimated that Montgomery County will absorb 200,000 new residents by 2040 and needs to build at least 60,000 units to accommodate that population growth. In 2021, the Department of Housing and Community Affairs projected that by 2030 the county could lose between 7,000 and 11,000 units of naturally occurring affordable housing that shelters some of the county’s poorest residents because of rent increases. And more than 60,000 cost-burdened households in the county already spend more than 30 percent of household income on housing costs, according to the 2020 assessment.
Addressing the affordable housing crisis has become a central focus for local officials who campaigned on promises to stoke development along transit lines and add affordable units to the housing stock. Some politicians have discussed adopting a countywide rent control measure to help protect existing renters from increases that have been driving out low-income residents. Others have advocated for a focus on building new housing — including more market-rate housing — to increase supply and drive costs down.
The county requires new developments to make at least 12.5 to 15 percent of units affordable to people earning between 55 and 70 percent of the area medium income. In 2022, the county established the Affordable Housing Opportunity Fund, which provides $14 million in revolving funds to support affordable housing developments. Yet most landlords face no limits on rent increases. The one exception is the city of Takoma Park, which has rent control that caps annual increases at 7.3 percent.
Thursday’s groundbreaking followed a search that began in 2019 for developers to purchase the county-owned land and build new housing there. The Montgomery County Planning Board approved the final site plans submitted by AHC and Habitat for Humanity in 2021.
Montgomery County Council member Natali Fani-González (D-District 6) said she was particularly excited to see the construction begin in her district on a project she oversaw while on the planning board. She also touted the plans to make the building meet the National Green Building Standard and Energy Star compliance with energy-saving electric appliances and LED lights.
“It speaks about our commitment to make sure we’re not just building buildings, but we’re doing it in a sustainable way,” she said.
The Randolph Road project cost $86 million and was supported by $27 million in low-income housing tax credit equity, a nearly $24 million loan from the Montgomery County Housing Initiative Fund, a $2 million Rental Housing Program loan from the Maryland Department of Housing and Community Development, a $3.5 million Rental Housing Works loan, and $300,000 in Multifamily Energy Efficiency and Housing Affordability Program funds. Additional funding came from private lenders.
The new development on Randolph Road near the intersection of Veirs Mill Road will sit on 6 acres and there are plans to create two new bus rapid transit lines nearby. The design includes plans for a fitness center, a half-acre public park with a playground and picnic area, and space for an on-site child-care provider.
“The vision for this community is to address several primary challenges facing many of our neighbors living on lower incomes — deeply affordable housing for larger families, access to transit, and the availability of child care,” said Alan Goldstein, AHC’s vice president of real estate development.
Construction is projected to take a little over two years, with the entire community opening up to renters and buyers in spring 2025, said Jennifer Smith, a spokeswoman for AHC.