Date:  April 27-29, 2020

Location: Montgomery County, MD (virtual)

Sponsor: Montgomery Planning, Department of the Maryland-National Capital Park and Planning Commission

Subject Area: Policy Update Review – School Capacity and Infrastructure Funding

Panel Chair: Glenda Hood, President, Hood Partners, Orlando, Florida

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Background and Assignment

As a step in the process of updating its Subdivision Staging Policy (SSP), a document that guides and balances the pace of the county’s growth with infrastructure, Montgomery County, Maryland’s Planning Department asked the Urban Land Institute (ULI) to convene a virtual Advisory Services Panel (vASP). In late April of 2020, a panel of independent, volunteer land use and real estate experts met to review the county’s recommendations for the school element of the SSP update and provided a national perspective on resources and best practices in policy to guide growth, school infrastructure, and funding.

Key Recommendations

The panel recommended a set of guiding principles be adopted and kept front and center; setting a framework for every action and decision from planning staff, county council, and planning boards as well as the community to move these principles forward. Guiding principles were identified by the panel based on briefing materials and discussions with community members, they include:

• The education, safety and enrichment of all children and youth living in the county are of utmost importance
• Prioritize equitable and orderly growth for the county as a whole
• Utilize a data set that is robust, accurate and well understood by all stakeholders and is reflective of market realities.
• Focus on engagement, communication and transparency. People feel informed and understand the policy; when the policy is implemented, interpreted or changed, people feel that they have a well-defined role in helping to revise it.
• Prioritize problem-solving to address issues that arise, problems that exist, and future challenges that arise as a result of the policy and how it is implemented.

After a review of the sponsor’s preliminary recommendations for the SPP update, the panel supported many of the recommendations.  They focused feedback on a few recommendations where they proposed immediate or long-term modification or further consideration. The panel identified recommendations which fell into four topic areas: annual school test timing and utilization, residential development moratorium, school generation rates, and funding mechanisms.  Highlights from the panel recommendations for these areas follow.

Annual School Test timing and Utilization

• The panel recommended that Montgomery Planning work with MCPS to simplify the Annual School Test and better align the timing of its components, to the extent possible.
• The panel suggested shortening the school capacity projection horizon from five years to three years as a way of improving the accuracy of the projection results and adding predictability for the development community.
• The panel supported the Utilization Premium Payment but recommends ensuring transparency in its creation and clarity in its application, as well as highlighting the benefits to the community to heighten and sustain community support.

Residential Development Moratorium

• The panel believes it is prudent to limit automatic moratoria only to Greenfield Impact Areas unless a development meets certain exceptions as recommended in the county’s recommendations for the SSP update.
• However, the panel believes that recommending that the moratorium exception adopted in 2019, pertaining to projects providing high quantities of deeply affordable housing or projects removing condemned buildings, is eliminated runs the risk of losing sight of the county’s affordable housing priorities.
• The panel recommended seeking additional opportunities for systemic alignment in educational facilities planning and area master planning, to the greatest extent possible.

School Generation Rates

• The panel recommended the continuous evaluation of the student generation rates by unit type and year built to monitor shifts over time.

Funding Mechanisms

• As it pertains to calculating impact taxes for multi-family units: The panel recommended that this policy be carefully data driven regarding the demographic information available to planners and policymakers.
  • Impact fees charged should take into consideration the alignment of the project with other county policy goals
  • Exemptions from the impact fees should be weighted toward projects that fulfill multiple goals
• As it pertains to Impact tax gradients and discount factors: The panel recommended the sponsor consider the following to ensure that mitigating factors are not overlooked in the implementation of the policy recommendation:
  • Look at the relative value of the property AND the socio-economic standing of the owner/tenant to make property value-based fees and taxes economically progressive
  • Consider how the Turnover and Infill areas will increase in value and potentially lead to displacement
  • Consider additional naturally occurring affordable housing preservation “hedge strategies” to preserve affordability and access
  • Ensure that communication and education around the historical impact of this policy is made available
• As it pertains to applying impact taxes on a net impact basis: The panel recommended further consideration be given to how the impact fee influences development patterns and how that impact fee can leverage county goals. Care should be taken to balance the mix of development and ensure that the redevelopment of areas results in long-term economic viability of that area and the county as a whole.

This virtual Advisory Services panel was ULI’s first such program executed in an entirely virtual format. It was created as a programmatic pivot and is a complement to the existing Advisory and Technical Assistance services offered by ULI. Learn more about the program’s virtual offerings here.