Sec. 52-24. Payments in lieu of taxes for certain housing developments.
Montgomery County, Md., Code § 52-24 (2026)
Sec. 52-24. Payments in lieu of taxes for certain housing developments.LinkCopy Citation
(a)
Definitions. In this Section, the following words have the following meanings.
Area median income means the median household income for the Washington, DC metropolitan area as estimated by the U.S. Department of Housing and Urban Development, adjusted by household size based on the occupancy standard for the unit.
Authority has the same meaning as defined under Section 12-101 of the Housing and Community Development Article of the Maryland Code, as amended.
Director means the Director of Finance or the Director’s designee.
Housing authority entity has the same meaning as defined under Section 12-104 of the Housing and Community Development Article of the Maryland Code, as amended.
Payment in lieu of taxes means an authorized payment made by the owner of a qualifying housing development instead of paying the County real property tax, including a County real property tax levied under a special area taxing law, that would otherwise be due.
Person has the same meaning as in Section 1-101 of the Tax-Property Article of the Maryland Code, as amended.
Section 8 Project-Based Rental Assistance means a program operated by the U.S. Department of Housing and Urban Development that provides housing assistance payments under a contract with the owner of a multi-family rental housing property to make up the difference between rent affordable to a low income household earning between 50 and 80 percent of the area median income and the approved rent for an adequate housing unit pursuant to 42 U.S.C. §1437f, as amended.
(b)
When authorized by state law, the Director may agree to accept a negotiated payment in lieu of the real property tax that would otherwise be levied on a qualifying housing development. A qualifying housing development is any housing development of which the owner is expressly eligible under state law to make payments in lieu of taxes.
(c)
When authorized by state law, the Director must offer a payment in lieu of taxes for a qualifying housing development:
(1)
owned or controlled by an authority or housing authority entity that exempts 100 percent percent of the real property tax that would otherwise be levied;
(2)
owned or controlled by a non-profit housing developer if at least 50 percent percent of the dwelling units located on the property receiving the payment in lieu of taxes are built under a government regulation or binding agreement with the County limiting the rent charged for the unit for at least 15 years to make the unit affordable to households earning 60 percent percent or less of the area median income. The offer must exempt 100 percent percent of the real property tax that would otherwise be levied for a period of at least 15 years, but no more than the number of years that rents charged for 50 percent percent of the dwelling units must remain restricted to households earning 60 percent percent or less of the area median income;
(3)
owned or controlled by a non-profit housing developer if all of the dwelling units are subject to a Section 8 Project-Based Rental Assistance Payment contract. The offer must exempt 100 percent percent of the real property tax that would otherwise be levied as long as the Section 8 Project-Based Rental Assistance Payment contract is in effect; or; or
(4)
owned or controlled by a person engaged in constructing or operating housing structures or projects if:
(A)
the property receiving the payment in lieu of taxes is converted to residential use from a commercial use with at least a 50 percent vacancy rate at the date of application to either the Planning Department or, if the property’s development does not require site plan approval from the Planning Department, Department of Permitting Services under Section 3.3.2.B of Chapter 59;
(B)
the property’s development meets all the requirements of an expedited approval plan under Section 7.3.5 of Chapter 59, except that if a property’s development does not require site plan approval from the Planning Department it is not required to meet the requirements of an expedited approval plan but must obtain the building permit within 2 years of acceptance by the Department of Permitting Services of the building permit application that includes the core and shell of the principal building; and
(C)
at least 17.5 percent of the dwelling units located on the property are built under a government regulation or binding agreement with the County limiting the rent charged for the unit for at least 25 years to make the unit affordable to households earning 60 percent or less of the area median income.
The offer must exempt 100 percent of the real property tax that would otherwise be levied for a period of at least 20 years beginning in the year a use and occupancy permit is issued for the qualifying development, but no more than the number of years that rents charged for 17.5 percent of the dwelling units must remain restricted to households earning 60 percent or less of the area median income.
(d)
The Director must not offer a payment in lieu of taxes for a qualifying housing development under this Section for any property that has already received a payment in lieu of taxes under any Section.
(e)
Any payment accepted by the Director must conform to guidelines included in a regulation adopted by the Executive under method (2). Before the Director accepts a payment in lieu of taxes, the Director must consult the Director of the Department of Housing and Community Affairs on whether:
(1)
the subject of the payment is a qualifying housing development; and
(2)
the amount of the payment complies with applicable guidelines.
(f)
The Executive, in each annual operating budget submitted to the Council, must calculate the amount of pending payments in lieu of taxes already approved under this Section, including payments for housing developments owned or controlled by an authority or housing authority entity.
Sec. 4. Transition. If a property has obtained site plan approval from the Planning Board by the effective date of this legislation, then the property is eligible for a payment in lieu of taxes under Section 52-24(c)(4), as amended by this Act, if it otherwise complies with subparagraphs (4)(A) and (4)(C) of Section 52-24(c), as amended by this Act, and an applicant for the property: (i) applies for a building permit, which is accepted by the Department of Permitting Services and includes the core and shell of the principal building, within 2 years of the earlier of the date of the Planning Board’s resolution or the effective date of this legislation; and (ii) obtains the building permit within 2 years of acceptance by the Department of Permitting Services of the building permit application that includes the core and shell of the principal building.
Sec. 5. Sunset. This Act must sunset and must have no further force and effect after 10 years from the effective date of this legislation, except that any agreements entered into prior to the sunset must remain in full force and effect.