GCAAR Positions on Montgomery County Issues

GUIDING PHILOSOPHY

REALTORS® are dedicated, within the framework of a democratic free enterprise system, to place home ownership within reach of all who desire it. Home ownership positively impacts neighborhoods, communities, and Montgomery County's economic stability.

REALTORS® support policies, which encourage new housing opportunities, economic development and the necessary infrastructure, while protecting the quality of life that has made Montgomery County a desirable place to live.

REALTORS® are committed to the proposition, stated in Montgomery County's Human Relations Code that all persons, regardless of race, color, religion, national origin, familial status, disability, sex, or sexual orientation, have a right to own real property. People are entitled to exercise and enjoy the benefits of ownership without undue encroachment or intrusion by government, or individuals.

REALTORS® subscribe to the policy of fair housing. We believe equal opportunity in housing can best be achieved through observance of the law, education, and mutual cooperation of the real estate industry and the public in a free and open housing market.

REALTORS® believe that the administrative costs of County government should be paid from the appropriation of general tax revenues and not through the imposition of department-generated fees, which amount to "hidden taxes".

GROWTH POLICY

Background
Economic growth is critical to the long-term health and vibrancy of Montgomery County. The County must consistently pursue policies, which will attract the economic opportunities necessary to expand our tax base, provide housing choices and employment, and deliver necessary services. REALTORSâ are committed to the proposition that economic growth can take place while simultaneously protecting the environment and quality of life.

Developers include public amenities as a matter of course in building new projects. Imposing impact fees unfairly shifts the burden of financing public facilities, used by the public at-large, to one segment of the community. In addition, these fees are passed on to homebuyers forcing them to pay twice for public facilities — first through increased home prices, and then through taxes.

REALTORS® Position

  • REALTORS® advocate streamlining the permitting process to reduce the time and administrative hurdles businesses face establishing themselves in Montgomery County.
  • REALTORS® support construction of the Master Plan or "G" Alignment of the Inter-County Connector and other reasonable alternatives to move people "East-West" efficiently across the County.
  • REALTORS® believe the County should fund from its existing tax base the necessary public improvements such as schools, water and sewer, transportation improvements, and other public facilities at a rate to keep up with the growth in population.
  • REALTORS® support a reduction in closing costs.
  • REALTORS® support a reduction in the County "piggyback" tax.
  • REALTORS® oppose impact fees and other "nuisance" taxes, which discourage development of new homes and businesses.

CLOSING COSTS

Background
Montgomery County and the State of Maryland impose some of the highest closing costs in the nation. The burden of these costs has had a negative impact on the expansion of development, homeownership and economic growth.

High closing costs discourage housing opportunities for first-time homebuyers and others from making their home in our community. As a result, the County loses the opportunity to attract new business investment to respond to the increased demand for goods and services. The County needs to attract and retain the talents of people who can expand our County's tax base.

Reducing closing costs will eliminate a major hurdle faced by homebuyers and will make the County competitive with surrounding jurisdictions. New homeowners stimulate demand for new goods and services thereby fueling economic expansion.

REALTORS® Position

  • REALTORS® support a concerted effort to reduce barriers to home ownership.
  • REALTORS® oppose all efforts to increase transfer and recordation taxes as a means to increase general county revenues, and support the elimination of taxes on the transfer of property.
  • REALTORS® oppose the pre-payment of property taxes.
  • REALTORS® support the County government's closing cost assistance program as an important avenue for moderate-income people and first-time homebuyers to purchase a home.

SIGN ORDINANCES

Background
The right of homeownership confers with it the freedom to make full use of one's property. The freedom of property owners to display signs on their own property without government interference is a matter of free speech guaranteed by the First Amendment of the U.S. Constitution.

Imposing fees on "For Sale", "Sold" and other types of real estate marketing signs authorized by owners on their own property is an intrusion on the right of property owners and an unnecessary tax.

Sign ordinances should strike a reasonable balance between the needs of buyers and sellers, who depend upon real estate signs to help market and sell homes, and the necessity to ensure that signs do not present a threat to the public safety. Sign ordinances should be consistent and easily understood by all.

REALTORS® Position

  • REALTORS® support sensible regulation of size and placement of signs on private property.
  • REALTORS® support reasonable regulation of the number, duration, and placement of signs in the public rights of way.
  • REALTORS® oppose the imposition of fees on property owners for the placement of signs on their own private property.
  • REALTORS® oppose any requirement which mandates that only licensed sign installers, or their designees, may place signs on private property.
  • REALTORS® believe that property owners have the right to place signs on their property unencumbered by fees and installer restrictions.
  • REALTORS® believe that the sign ordinance enacted by the Montgomery County in 1997 should be repealed because it obstructs the rights of property owners, hinders free speech, imposes unnecessary costs, and serves no legitimate public policy purpose.
  • REALTORS® oppose efforts by government to impose additional burdens on the ability of property owners to market their property.

IMPACT FEES

Background
Economic vitality is critical to sustaining Montgomery County. A healthy housing market builds strong communities, enhances the tax base, and creates new employment opportunities. The imposition of impact fees discourages new businesses from locating in Montgomery County, existing businesses from expanding here, and inflates the cost of housing.

New development ultimately increases the County's tax base, which pays for additional public services required by the growth, therefore paying for itself. The requirement of additional initial outlays by developers is passed on to buyers. This limits housing affordability and increases the cost of housing.

Impact fees place the burden for funding public facilities on only one industry; however, the entire county benefits from these improvements. Good public policy allocates the financial responsibility for public facilities equitably.

Impact fees, in the form of excise, sales, and property taxes are imposed on building materials for home construction and lot development. The builder passes these costs on to the homebuyer. This further increases the cost of housing. In 1991 the County enacted another impact fee, the construction excise tax (CET). By 1992, the region was slowly beginning to recover from a recession that devastated the real estate industry. However, in Montgomery County, the mere presence of the CET delayed economic recovery for several years until it was finally repealed in 1994. Only then did Montgomery County's economic recovery begin.

Montgomery County's experience with the CET demonstrates that economic development occurs in communities that minimize fiscal and regulatory obstacles to investment.

REALTORS® Position

  • REALTORS® oppose both the concept of system development charges and any efforts to increase them.
  • REALTORS® are committed to working with County officials to identify alternate means of financing additional public facilities such as tax credits for providing certain public improvements.

TRANSPORTATION INVESTMENT

Background
Expansion of our capacity to transport people represents an important investment in the future growth of our economy and the quality of life in Montgomery County. By investing in roads and public transportation, the quality of life is maintained and enhanced. The failure of transportation systems to meet the ever-growing demands placed on it has reached a critical point.

Since 1973, Montgomery County has had an adequate public facilities ordinance, which was designed to ensure that public facilities would be in place to service future growth. However, the County has lagged far behind in building the necessary infrastructure. Montgomery County has grown to be the largest jurisdiction in the State of Maryland, yet the County has failed to adequately expand its transportation system to keep up with the population increase. Traffic congestion and gridlock threaten to choke off opportunities for new investment in the County.

In particular, the over-use of our major arteries must be addressed. It is estimated that in less than 10 years, use of the Capital Beltway will exceed capacity. Major corridors such as I-270 and Route 29 are not able to service the projected traffic flow. Upper Montgomery County has experienced the most rapid growth. Yet, the roads servicing the up-county area are inadequate to accommodate the traffic generated by commuters.

For the past 30 years the Master Plan has included a right-of-way for the Inter-County Connector. Despite the fact that this road has been the subject of numerous studies, progress toward constructing this necessary artery has been stopped. Failure to make improvements to the transportation system stunts economic growth.

REALTORS® Position

  • REALTORS® support construction of the Master Plan or "G" alignment of the Inter-County Connector.
  • REALTORS® support necessary road improvements to facilitate cross-county traffic such as connecting Route 28 to Route 198 and upgrading Route 115. This includes construction of grade-separated arterial roads.
  • REALTORS® oppose the growing practice of using the State Transportation Trust Fund for general revenue purposes. In Fiscal Year 1996, 23% of Transportation Trust Fund dollars went to programs unrelated to transportation.
  • REALTORS® support the expansion of Metrorail beyond its current termination points.
  • REALTORS® support circumferential rail and rapid transit bus routes.
  • REALTORS® support using the Metrobus and the County Ride-On systems.
  • REALTORS® support construction of safe bikeways and sidewalks.
  • REALTORS® support making infrastructure improvements an important priority in the capital budget.

COUNTY INSPECTIONS

Background
Enforcement of County housing codes is essential to protecting housing in Montgomery County. However, recently the County inspectors have been selective and arbitrary in their approach to the inspection process.

All properties should be made to meet the same requirements. The County has enforced a different set of standards on owner-occupied homes than on tenant occupied properties. No public good is served by enforcing two different sets of standards.

REALTORS® Position

  • REALTORS® support an inspection policy that is uniformly applied throughout Montgomery County and eliminates opportunities for inconsistent and arbitrary actions.
  • REALTORS® oppose interior inspections unless the County receives reports of violations that threaten public health and safety.
  • REALTORS® believe that the County should work cooperatively with property owners to resolve violations before taking a punitive approach.
  • REALTORS® support improved policy coordination and cooperation with homeowners, condominium, and cooperative associations (HOAs) in the enforcement of property inspections.

RENT CONTROL

Background
One of the most destructive housing policies is rent control. It discourages the construction of new rental housing and causes the neglect of current rental housing. Rent control places an unnecessary burden on landlords and property owners. Rental housing is a business in which owners are entitled to a market return on their investments. Return on investment creates incentive to build and provide more affordable housing. As more rental housing is created, upward pressure on rents is eased as demand is met.

Rent control creates a shortage of available low- and moderate-income housing, and results in the existing rental units begin poorly maintained because landlords are forced to take a loss on their investment. Instead of helping people who need affordable housing, rent control reduces the available supply of housing for low- and moderate-income people.

Montgomery County enacted a rent control ordinance in 1979. Shortly, thereafter, thousands of rental units were taken off the rental market and made available for purchase. By 1981, when rent control was finally repealed, Montgomery County registered a two percent vacancy rate or practically no rental housing available. No new units were planned because builders could not be assured of a return on their investment. It was more profitable to build in other jurisdictions, which did not have rent control. Once repealed, Montgomery County experienced rapid new development of rental housing. As demand for housing was met, rents stabilized in the County. Voluntary guidelines for rent increases were then established.

REALTORS® Position

  • REALTORS® believe that the free market is the best way to ensure that ample and affordable housing is available.
  • REALTORS® oppose rent control and related government regulations.
  • REALTORS® support the full range of programs provided by the County Housing Opportunities Commission to ensure that those in need have access to decent, affordable housing.