Maryland Must Build Thousands More Homes To Keep Prices Affordable, Report Says A lack of affordably priced housing in Maryland can create long-term economic problems, according to a new state-commissioned report.
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Maryland Must Build Thousands More Homes To Keep Prices Affordable, Report Says

Housing development in Maryland falls far short of expected demand, according to a new study. woodleywonderworks/Flickr hide caption

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Maryland will have to make big changes to its housing ecosystem to keep homes affordable over the next 10 years, according to a new state-commissioned report released Tuesday.

The analysis from the University of Maryland's National Center for Smart Growth and Enterprise Community Partners, a nonprofit housing lender and advocacy organization, says Maryland must add thousands more housing units by 2030 to accommodate a swelling population of low-income residents, while also meeting unmet demand from moderate-income residents, seniors and people with disabilities.

The study's authors recommend expanding state-backed mortgages to reach lower-income homebuyers, establishing dedicated funding sources for affordable housing, removing barriers to rezoning, adopting rent stabilization policies, and scaling back parking requirements that can raise the cost of new development, among dozens of other recommendations for officials on every level of government.

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"Looking ahead to 2030, if current trends hold, Maryland will need more homes that serve extremely and very low-income households; smaller, one-person households; seniors; and families with children," says the report, which was commissioned by the Maryland Department of Housing and Community Development. "These homes and any complementary services, such as homeownership counseling, down payment assistance, or rental assistance, will need to align with the unique needs of an increasingly racially and ethnically diverse population."

Today, the state is short 85,000 rental units for low-income households, according to the study. With Maryland expected to add an estimated 97,166 low-income households by 2030, the shortage will worsen unless the state creates and preserves many more deeply affordable homes. Thirteen of the state's 23 counties and Baltimore City don't have enough housing that's affordable to very low-income renters. The deficit is largest in Montgomery County, followed by Baltimore, the analysis says.

Median gross rent increased by 31% and 33% in Montgomery and Prince George's counties, respectively, between 2010 and 2017, according to Census data referenced in the study. Median income in both counties increased by less than 2% in the same period.

The report notes that Maryland's homeownership market has mostly recovered from the recession of 2007-2009, but the state's supply of for-sale homes is still hampered by high construction costs and limitations on building apartments, townhomes and other denser housing types. Gaps in the housing market have also contributed to racial disparities in homeownership, the analysis says; the Black homeownership rate in Maryland is 26 percentage points lower than that of whites.

"Homeownership in Maryland has become more expensive since 2000, even after accounting for the declines in prices that took place following the Great Recession," the analysis says.

The study's authors note that they don't take into account COVID-19 because there's not enough data to assess the pandemic's impact on Maryland's housing market yet, but they predict the health emergency will lead to slower economic growth and less housing development over time. The health crisis could cause housing prices to rise at a slower rate than they did between 2015 and 2019, the report says, but not by much if leaders in Maryland don't take action now to encourage new housing development.

Rising construction costs, strict regulatory requirements, a lack of higher-density zoning, and little political support for development "create uncertainty and drive up the cost to build affordable and market-rate homes, with builders passing along these higher costs to Marylanders seeking to rent or buy a home in the state," the analysis says.

Supporters of "smart growth" policies say a lack of affordably priced housing isn't just a problem for people who need that housing; it can also stifle economic growth and worsen traffic congestion as workers are forced to live farther away from jobs.

Lawmakers in Montgomery County adopted a resolution in 2019 to add 41,000 new housing units by 2030, with most of them affordable to low- and medium-income residents. The move drew criticism from the county's top elected official, who said an increase in low-income households in Montgomery County isn't assured.

This story is from DCist.com, the local news website of WAMU.

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