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Leggett, citing budget pressures, retreats on promise for affordable housing

Montgomery County Executive Isiah Leggett. (Jeffrey MacMillan)

Montgomery County Executive Isiah Leggett said this week that the county's shaky 2016 budget outlook will make it difficult to keep a promise to set aside 2.5 percent of property tax revenue for affordable housing.

A week before June's Democratic primary, Leggett (D) stood before a crowd of 600 community activists at Silver Spring United Methodist Church and said that using that money to add a minimum of 1,000 affordable housing units a year was "the right thing to do."

On Monday night, he told an audience at the BlackRock Center for the Arts in Gaithersburg that the county’s estimated $200 million shortfall has changed the picture.

"I have to be realistic. It's not going to be easy," he said at the first in a series of public forums on the budget for the fiscal year beginning July 1. Leggett is to submit his proposed spending plan to the Montgomery County Council on March 15.

Officials said last month that if lower-than-expected tax revenues continue at their current trajectory, county departments would have to cut spending by at least 6 percent to produce a balanced budget.

Uncertainties about federal and state funding — Maryland has its own $1.2 billion shortfall — along with state-mandated education spending could mean reductions of up to 15 percent, according to budget analysts.

Leggett said that although the current shortfall is small change relative to the more than $2 billion in deficits the county faced during the depths of the Great Recession, closing the gap will still be a challenge. “Without a huge influx of new revenue, the challenge for the county executive and the county council is to choose among very good, worthy options,” he said.

Housing activists said they intend to hold Leggett to his promise.

"We understand that budget times are tight and that this is when real leadership shows itself," said James Pearlstein, lead organizer for Action In Montgomery (AIM), the grass-roots group advocating for more affordable housing. "We're looking for bold and creative leadership on this in­credibly critical issue. We hope that Mr. Leggett honors his pledge, and we believe that he will."

Montgomery has long required developers to reserve at least 12.5 percent of units in new construction for low- and moderate-income residents. But studies show that the county, like many jurisdictions, needs far more units than are available. Montgomery will need an estimated 30,000 to 50,000 additional units of affordable and workforce housing over the next 20 years.

Under pressure from AIM, Montgomery established the percentage set-aside in 2003. But the county has not reached that level of dedicated funding since the recession hit in 2008. There is $43.6 million for affordable housing in the current budget, compared with $56.1 million spent in 2010.

Leggett spokesman Patrick Lacefield said Tuesday that the $18.6 million spent on affordable housing initiatives currently equals 1.8 percent of property tax revenues. Debt service payments to support bond funding for affordable housing projects adds an additional $7.2 million to the total spent by the county, he said, which adds up to 2.48 percent of property tax revenues. There is also some housing money in the county’s Health and Human Services department budget.

"So we nearly hit it for the current year," Lacefield said. "Some years in the past, we have not."

Leggett defended his record Monday night, citing over $300 million in spending over the past seven years, producing more than 12,000 affordable units.

"We've done a great deal," he said.