Council passes revamped new inclusionary housing bill

Developers will be required to set aside a portion of units built in new market-rate housing developments as affordable under a bill passed by the City Council on Monday.

The legislation, which is half of a two-bill package, was approved by a unanimous vote with two members absent. The measure and its companion bill, which will create a tax credit to support affordable units and is expected to be passed on Thursday, still require the signature of Mayor Brandon Scott.

Scott, who has in the past expressed some reservations about the bills, has recently signaled his support.

Once signed, the law will replace the city’s previous attempt at mandating inclusionary housing that was largely viewed as a failure. That law, which was passed in 2007 and expired last year, created only 34 units of affordable housing. The law allowed developers to avoid the requirement via numerous waivers.

As the legislation passed, residents and housing advocates in the audience burst into applause, as did several members of the council.

Councilwoman Odette Ramos, the bill’s primary sponsor, said the legislation, which was initially introduced in December 2022, represents the input of numerous lawmakers, community advocates and residents who came to the table to collaborate.

“This is a bill that we can all be proud of that we had a lot of people working on,” she said.

The new inclusionary housing package requires developers to set aside 10% of units as affordable, barring some exceptions such as penthouse units. Of that 10%, half would be reserved for those making 60% of area median income — roughly $67,000 annually for a family of four. The other half would go to those making 50% of area median income — about $60,850 for a family of four.

In the year since the bills were introduced, they have been discussed at length and repeatedly amended. Scott’s administration expressed reservations about the proposal, including making the requirement citywide. Administration officials lobbied unsuccessfully to limit the requirement to only neighborhoods viewed as most desirable to real estate developers, arguing the burden of affordable units could sink some projects.

City finance officials argued last month that Baltimore faces a $100 million structural deficit in 2024, putting it in a bad position to absorb the cost of the legislation.

A tax credit that would be created by the second bill in the package represents a compromise with administration officials. The 30-year credit, which would be available to property owners, would be equal to the difference between the rent paid from an inclusionary housing unit and the marketrate rent, offsetting the cost.

The council approved a technical amendment to the tax credit bill on Monday, but delayed its final passage to its meeting on Thursday.

Scott said Monday he looks forward to signing both bills when they reach his desk.

“Inclusionary housing is going to help us overcome the results of decades of intentional disinvestment and disenfranchisement in far too many of our neighborhoods,” he said.