Chapter 56. Urban Renewal and Community Development.

The county council is hereby empowered and authorized by resolution to establish and thereafter to maintain a special fund to be known as the "rehabilitation loan fund" for the purpose of making loans to:

The county executive shall prescribe from time to time such regulations, adopted under method (2) of section 2A-15 of this Code, deemed appropriate for the making of such loans and the administration of the fund, including the right to contract with private organizations for the administration of such fund.

Subject to appropriation, the Director of the Department of Housing and Community Affairs (in this Section, the Department) may create and administer a Demolition Loan Program. The purpose of the Program is to assist owners of commercial buildings which are:

Under lending guidelines and procedures and repayment terms approved by the Director of Finance, the Department may loan from the Economic Development Fund created under Section 20-73 to an owner of a commercial building which meets the standards of subsection (a) all or part of the cost of demolishing the building and clearing the land on which it is located. The repayment terms for any loan made under this program may allow partial or full forgiveness of the loan when the Director finds that forgiveness would best accomplish the purposes of this program.

Any loan greater than an amount set by Regulation must be approved by a lending committee composed of the Director of Finance, Economic Development, and Housing and Community Affairs. Any loan greater than an amount set by Regulation must not be approved until the County Council has received notice of the loan and a reasonable opportunity to comment.

The County Executive must adopt Regulations under method (2) to administer this program.

Home: Both "one-family dwelling" and "mobile home," as those terms are defined in section 59-1.

Homeowner: A person who owns and lives in his or her own home.

Replacement: Removal of any existing substandard home and substitution therefor, by construction or purchase and placement on the property, of a home that will comply with all applicable state and county statutes, codes and ordinances.

The present condition and value of the property.

Real estate owned by the borrower that would be a source of funds either by sale or a commercial loan.

Total net income of the borrower and members of his or her family. No loan shall be made to any owner-occupied home where the resources of (a) and (b) above are adequate for obtaining financing of the home from other sources.

Properties or homes shall be single-family, owner-occupied homes which are found to be in violation of one or more of the provisions of the state and county statutes, codes and ordinances relating to the use, maintenance, facilities and occupancy of existing property.

Properties or homes shall be situated in locations where they will not be in conflict with the following types of governmental projects:

Properties or homes shall be in locations where safe, sanitary and adequate water supply and sewage disposal are available or will be provided as a result of application of the loan proceeds.

Properties or homes must not be feasibly capable of being brought into compliance with the applicable county codes and ordinances by use of the rehabilitation loan fund for the county or any other type of rehabilitation loan made available by any other governmental agency because the expense required to achieve rehabilitation would be excessive in relation to the resulting benefit to the property.

Home replacement to be carried out under this program shall be only that necessary to bring the property into full compliance with all applicable state and county statutes, codes and ordinances. Replacement shall be limited to facilities reasonably necessary to accommodate the present occupancy and usage.

The purpose of replacement is to eliminate existing conditions of deterioration or obsolescence and to prevent their recurrence. All construction shall be carried out in a workmanlike manner and be of such quality as to be durable and long lasting and in compliance with applicable state and county statutes, codes and ordinances.

Loans may be made to owner-occupants whose verified income does not exceed the section 8 lower income limits for the Washington Metropolitan Area as established from time to time by the U.S. Department of Housing and Urban Development. The county executive may make exception to those limits if a finding is made that an otherwise good risk is unable to obtain a conventional loan.

Loans shall carry an interest rate of from one (1) to six (6) percent per annum. Repayment provisions shall be based upon the financial circumstances of the individual property owner. In determining the initial rate of interest the property owner shall not be expected to allocate, based on a loan term of forty-five (45) years, more than thirty-five (35) percent of his family gross income to the monthly costs of shelter (principal, interest, taxes, insurance, maintenance and utilities).

Terms of the loan shall be based upon the owner's financial circumstances at the time of the loan commitment. If the initial rate of interest is three (3) percent or less, the interest rate must be increased to a higher rate upon a determination that thirty-five (35) percent of the property owner's family gross income is sufficient to pay the monthly costs of shelter (principal, interest, taxes, insurance, maintenance and utilities) at such higher rate.

Security for loans made pursuant to this fund shall be of such a nature as will best protect the interests of the county at minimum costs and shall be determined on an individual basis pursuant to regulations to be established by the county executive.

Existing mortgagees or lien holders whose mortgages or liens are secured by the existing improvements must consent to the removal of the existing improvements. Such mortgagees or lien holders shall have the option to make a reconstruction loan to the applicant if the parties so desire.

The interest rate shall be increased to the market rate if the property is sold except that if the property is purchased by the Montgomery County housing opportunities commission, the interest rate shall be three (3) percent. If the property is purchased by a person who meets the eligibility requirements of subsection (a) of section 56-5, the interest rate shall be determined by subsection (b) of section 56-5.

The following terms, wherever used or referred to in this article, shall have the following meanings, unless a different meaning is clearly indicated by the context:

Federal government shall include the United States of America or any agency or instrumentality, corporate or otherwise, of the United States of America.

Slum area shall mean any area where the dwellings predominate, which, by reason of depreciation, over-crowding, faulty arrangement or design, lack of ventilation, light or sanitary facilities, or any combination of these factors, are detrimental to the public safety, health or morals.

Blighted area shall mean an area in which a majority of buildings have declined in productivity by reason of obsolescence, depreciation or other causes to an extent they no longer justify fundamental repairs and adequate maintenance.

Urban renewal project shall mean undertakings and activities of Montgomery County in an urban renewal area for the elimination and for the prevention of, the development, or spread of slums and blight, and may involve slum clearance and redevelopment in an urban renewal area, or rehabilitation or conservation in an urban renewal area, or any combination or part thereof in accordance with an urban renewal plan. Such undertakings and activities may include--

Urban renewal area shall mean a slum area or blighted area or both, which the county council for Montgomery County designates as appropriate for an urban renewal project.

Urban renewal plan shall mean a plan, as it exists from time to time, for an urban renewal project, which plan shall be sufficiently complete to indicate such land acquisition, demolition and removal of structures, redevelopment, improvements, and rehabilitation as may be proposed to be carried out in the urban renewal area, zoning and planning changes, if any, land uses, maximum density, and building requirements.

The county council for Montgomery County is hereby authorized and empowered to carry out and effectuate the purposes and provisions of this article:

Generally. To carry out urban renewal projects, which shall be limited to slum clearance in slum or blighted areas and redevelopment thereof, or the rehabilitation of slum or blighted areas.

Acquisition of land and property. To acquire in connection with such projects, within Montgomery County, Maryland, land and property of every kind and any right, title, interest, franchise, easement, or privilege therein, including land or property of any right therein already devoted to public use by purchase, lease, gift, option, condemnation, or any other legal means, for development or redevelopment purposes, including, but not limited to, the demolition, comprehensive renovation or rehabilitation thereof; provided, however, that any land or property owned by the State of Maryland shall not be acquired without the prior consent of the state.

Mortgage disposal, etc., of real property. To mortgage, pledge, or otherwise encumber or dispose of any real property; provided, that statutory provision with respect to the acquisition, clearance, demolition or disposition of property by public bodies shall not apply to an urban renewal project and related activities unless the legislature shall specifically so state.

Development, etc., of property. To develop or redevelop, including, but not limited to, the comprehensive renovation, or rehabilitation of any and all land or property acquired by any of the methods hereinbefore mentioned.

Loans, grants, gifts, etc. To apply for and accept from the United States of America, the State of Maryland, or any department or agency thereof, or any other source, any loan, grant, gift, contribution or aid of any kind.

Contracts, deeds, leases, etc. To make and execute all contracts, agreements, deeds, leases, franchises, or other legal instruments, for such term and under such conditions as may be necessary or convenient to exercise and carry out the provisions of this article, notwithstanding any limitations as to the term of years imposed by other laws on such contracts, agreements, deeds, leases or franchises.

Public improvements. To plan, replan, install, construct, reconstruct, repair, open, close, abandon, or vacate streets, roads, sidewalks, public utilities, parks, playgrounds, and other public improvements in connection with an urban renewal project.

Right of entry. To enter into any building or property in any urban renewal area in order to make inspections, surveys, appraisals, soundings or test borings.

Holding, improving, insuring, etc., property acquired. To hold, improve, clear or prepare for redevelopment any property acquired in connection with urban renewal projects; to inspect or provide for the insurance of any real or personal property or operations of the county against any risks or hazards, including the authority to pay premiums on any such insurance.

Plans, surveys, etc. To make or have made all surveys and plans necessary to the carrying out of the purposes of this article and to adopt or approve, modify and amend such plans, which plans may include, but are not limited to:

Relocation of displaced persons, etc. To prepare plans for the relocation of persons (including families, business concerns and others) displaced from an urban renewal area, and to make relocation payments to or with respect to such persons for moving expenses and losses of property for which reimbursement or compensation is not otherwise made, including the making of such payments financed by the federal government.

Organization, coordination, etc., generally. To generally organize, coordinate and direct the administration of the provisions of this article in order that the objective of remedying slum or blighted areas and preventing the causes thereof with Montgomery County may be most effectively promoted and achieved.

Formulation of "workable program" to promote development, etc. To formulate a "workable program" for utilizing the powers and authority authorized by the Constitution of Maryland, and public general laws, in order to promote development and redevelopment in an urban renewal area.

Fiscal matters generally. To appropriate such funds and make such expenditures as may be necessary to carry out the purposes of this article, and to levy taxes and assessments for such purposes; to borrow money, and to give such security as may be required therefor; to invest any urban renewal funds held in reserve or sinking funds or any such funds not required for immediate disbursement, in property or securities which are legal investments for other municipal funds.

Creation, appointment, etc., of urban renewal commission, etc. To create, appoint, and vest jurisdiction or authority to exercise or perform all or any part of the powers contained in this article, in a suitable board, agency or commission; to designate the number, term, compensation and duties of said commission; to require that no officer, official or employee of such commission, or the county council, shall become financially interested in any way in any land or property which may be acquired for an urban renewal project.

Condemnation. To condemn land or property, including improvements, and any other rights, title, and interest therein, in the name of the County for an urban renewal project, under Title 12, Subtitle 1 of the Real Property Article of the Maryland Code.

Temporary operation, management, etc., of property acquired. To operate, manage and maintain temporarily any property acquired by Montgomery County in an urban renewal area, or for an urban renewal project, pending disposition of said property as authorized by this article, as may be deemed desirable even though not in conformity with the urban renewal plan.

Sale, lease, etc., of property acquired. To sell, lease, convey, transfer or otherwise dispose of or retain any of such land or property, regardless of whether or not it has been developed, redeveloped, altered or improved and irrespective of the manner or means in or by which it may have been acquired, to any private, public or quasi-public corporation, partnership, association, person or other legal entity. Any lease or rental agreement entered into pursuant to this article, for any of the purposes or objectives contemplated by this article, is hereby declared to be exclusively for business or commercial purposes and the fee, interest, rent, or charge reserved to be paid shall not be subject to redemption by the lessee, tenant or their successors in title, except to the extent and in the manner set forth in such lease agreement. Such property shall be subject to such covenants, conditions and restrictions, including covenants running with the land as the county council may deem to be necessary or desirable to assist in preventing the development or spread of future slums or blighted areas or to otherwise carry out the purposes of this article. The purchasers or lessees and their successors and assigns shall be obligated to devote such real property only to the uses specified in the urban renewal plan, and may be obligated to comply with such other requirements as the county council may determine to be in the public interest, including the obligation to begin within a reasonable time any improvements on such real property required by the urban renewal plan. Such real property or interest therein shall be retained, sold, leased, or otherwise transferred at not less than its fair value for uses in accordance with the urban renewal plan. In determining the fair value of real property for uses in accordance with the urban renewal plan, consideration shall be given to the uses provided in such plan; the restrictions upon, and the covenants, conditions and obligations assumed by the purchaser or lessee or by the county council retaining property; and the objectives of such plan for the prevention of the recurrence of slum or blighted areas. The conveyance to a private purchaser or lessee may provide that such purchaser or lessee shall be without power to sell, or encumber, or lease, or otherwise transfer the real property without the prior written consent of the county council.

Miscellaneous. To exercise all or any part or combination of powers granted herein.

The county council in initiating an urban renewal project shall adopt a resolution which:

Finds that one or more slum or blighted areas exist in the county.

Finds that the rehabilitation, redevelopment or a combination thereof, of such area or areas, is necessary in the interest of the public health, safety, morals or welfare of the residents of the county.

Defines the area within which the urban renewal project is to proceed.

Authorizes preparation of all necessary plans, drawings, designs, and the employment of necessary engineers, architects, consultants or other personnel in order to properly prepare the detail plans and data for said urban renewal project or projects.

Prior to final approval of an urban renewal project, the county council shall:

Submit the plans to the Montgomery County Planning Board for its review and recommendation only. The planning board's recommendations shall be submitted within sixty (60) days after receipt of the plans.

Hold a public hearing on the proposed urban renewal project, after fifteen (15) days' notice by publication in a newspaper having general circulation in the county, giving the time, place and date of the hearing, and an opportunity for the public to review the plans.

Make such change or modification as the council deems desirable in the urban renewal project.

Approve the project by resolution. Upon approval by resolution of such urban renewal project, such plan shall be deemed to be in full force and effect.

For the purpose of financing and carrying out an urban renewal project and related activities, the county council is hereby granted the power and authority to do the following:

Borrow money, etc. To borrow money and incur indebtedness and to evidence such borrowing or indebtedness by the issuance, at any time, and from time to time, its general obligation serial maturity bonds, upon the full faith and credit of Montgomery County, and the county is authorized to contribute and deliver in whole or in part the net cash proceeds of such bond issue, or issues, to a commission, board, or agency created and appointed to administer the provisions of this article.

Levy taxes, etc. The county council is hereby authorized and directed in and for each and every fiscal year during which any of such bonds are outstanding, to levy and collect an ad valorem tax, upon all the assessable property in Montgomery County, in an amount sufficient to provide for the payment when due of the principal and interest in all such bonds becoming due in such fiscal year, and in the event the proceeds from the taxes so levied in any such fiscal year shall prove inadequate for the purposes cited in this article, additional taxes shall be levied in the succeeding fiscal year to make up any such deficiency. The bonds hereby authorized shall constitute and they shall so recite an irrevocable pledge of the full faith and credit and unlimited taxing power of the county to the payment of the maturing principal and interest of such bonds as [and] when the same respectively mature. The county may apply to the payment of principal and interest of any bonds issued under this article, any funds received from the State of Maryland, or United States of America or any agency or instrumentality thereof.

Bonds to be negotiable instruments. All such bonds shall have, and are hereby declared to have, as between successive holders, all the qualities and incidents of negotiable instruments under the negotiable instruments laws of the state to the extent provided in section 8 of article 31, Annotated Code of Maryland, 1957, as amended.

Bonds tax exempt. Any and all such bonds and the interest thereon and the income derived therefrom, in the hands of the holders thereof from time to time, shall be and are hereby declared to be exempt from state, county, city, and municipal taxation of every kind and nature whatsoever in the state.

Bonds cumulative. All bonds issued under this article are additional and cumulative and the bonds authorized by this article may be issued notwithstanding that other bond acts may provide for the issuance of other bonds or the borrowing of money for the same or similar purposes on the same or other terms and conditions.

Income. Any and all of the income, receipts, proceeds, revenues, and funds derived from, or available or to be made available for, any undertakings for the accomplishment of the purposes and object mentioned in or contemplated by this article.

Contracts. Any contract, or right thereunder existing between the United States of America, or any department or agency thereof, and the county council of Montgomery County with respect to any undertaking for the accomplishment of the purposes and objects of this article.

Any municipality within the county is authorized to apply for a grant or loan from the county to assist in financing an urban renewal project within such municipality. The application shall be in such form and contain such information as may be required by the county.

Prior to authorizing final approval of an application for a financial grant or loan, the county council shall:

Housing site fund. Establish and maintain a housing site fund.

Public funds. Expend public funds from the housing site fund for any of the purposes set forth in this article.

Acquisition of land and property. Acquire, within the boundary lines of the county, and in accord with the county's policy on the dispersal of low and moderate income housing, by lease, purchase, gift or otherwise, real and personal property of every kind, and any right, title, interest, franchise, easement or privilege therein for use in implementing the provisions of this article.

Disposition of property. Grant, sell, lease, convey, transfer or otherwise dispose of or return any of the aforesaid real property to any private or public or quasi-public corporation, partnership, association, person, developer or other legal entity for the purpose of constructing dwellings or housing for persons of eligible income, upon such terms and conditions as shall be determined by the county; provided, that such disposition, grant or lease of any such property shall first have been advertised once a week for three (3) successive weeks in one (1) or more newspapers of general circulation published in the county, stating the terms and the compensation to be received therefor, and giving opportunity for objection thereto, and provided also, that notice of such disposition, grant or lease shall have been given to the county council prior to such advertisement. All proceeds of any such sale or lease shall be credited to the housing site fund. The authority provided by this subsection may be exercised without regard to whether or not the property has been developed, redeveloped or altered, or is unimproved and irrespective of the manner in or means by which it may have been acquired.

Obtain services. Arrange or contract for the furnishing by any person or agency, public or private, of services, privileges, works or facilities for, or in connection with the acquisition of, land and property pursuant to the provisions of this article. Payment for such services shall be made from the housing site fund.

Exercise of powers. Exercise all, or any portion or combination of the powers and authorization herein granted, in accordance with the capital improvements programs and capital budgets approved by the county council.

Persons of eligible income. Persons who individually or as part of a family unit lack sufficient income or assets (as determined by the county executive or his designee) to enable them, without financial assistance, to live in decent, safe and sanitary dwellings without overcrowding.

Opportunity housing. Those dwelling or housing units for which the rental or selling price is established by the county pursuant to this article in order that persons of eligible income may be able, within their respective incomes, to live in decent, safe and sanitary accommodations without overcrowding.

Opportunity housing project. Any work or undertaking pursuant to this article to provide decent, safe and sanitary individual or multi-unit dwellings or housing for persons of eligible income. Such work or undertaking may include, but shall not be limited to, the provision of buildings, land, equipment, utilities, streets, parks and any other facilities, rights or appurtenances deemed to be necessary, convenient or desirable within the general intent of this article. The phrase "opportunity housing project" also may be applied to the planning of buildings and improvements, the acquisition of property, the demolition of existing structures, the construction, reconstruction, alteration and repair of improvements and all other work in connection with the production of opportunity housing units.

Nonprofit housing development corporation. A nonprofit or charitable private or public corporation authorized by the county to receive and expend public funds, in order to provide, or assist in providing, decent, safe and sanitary dwelling accommodations without overcrowding.

Real property. All lands, including improvements and fixtures thereon, and the property of any nature appurtenant thereto, or use in connection therewith, and every estate, interest and right, legal or equitable therein, including terms for years and liens by way of judgment, mortgage or otherwise and the indebtedness secured by such liens.

Public funds. Expend public funds for any of the purposes set forth in this article.

Opportunity housing projects. Institute opportunity housing projects by preparing, carrying out, acquiring and operating opportunity housing projects; to provide for the construction, reconstruction, improvement, alteration or repair of any opportunity housing project, or any part thereof.

Acquisition of land and property. Acquire, within the boundary lines of the county, by purchase, gift, option, condemnation or any other legal means, real and personal property of every kind, and any right, title, interest, franchise, easement or privilege therein, for use in opportunity housing projects, all in conformity with section 20-37.

Sale, lease, etc. Grant, sell, lease, convey, transfer or otherwise dispose of or return any of the aforesaid real property, regardless of whether or not it has been developed, redeveloped, altered or unimproved, and irrespective of the manner in, or means by, which it may have been acquired, to any sponsors of opportunity dwellings or housing or to any other private or public or quasi-public corporation, partnership, association, person, developer or other legal entity, upon such terms and conditions as may be determined by the county to make economically feasible the development of opportunity housing without the necessity of public bidding or public sale, expressly for the purpose of constructing opportunity housing for persons of eligible income; provided, that such disposition, grant or lease of any such property shall first have been advertised once a week for three (3) successive weeks in one (1) or more newspapers of general circulation published in the county, stating the terms and the compensation to be received therefor, and giving time for filing of objections thereto; and in the event such conveyance takes place the purchaser or lessee thereof shall, prior to entering into any contract or agreement to resell, encumber or in any way lease or otherwise retransfer the property, first obtain written consent of the county executive.

Provide services. Arrange or contract for the furnishing by any person or agency, public or private, of services, privileges, works or facilities for, or in connection with, an opportunity housing project or the occupants thereof.

Borrow money or issue bonds. Issue bonds or borrow money under other obligations from time to time at the county's discretion, in order to carry out the purposes stated in this article.

Insurance. Provide for the securing of insurance against any risks or hazards to any real or personal property or operations of the county in the performance of its duties and the carrying out of its authority as set out in this article; and to procure insurance or guarantees from the federal government or the state for the payment of any debts or encumbrances, or parts thereof, under any federal or state programs for which the county would be eligible in carrying out the purposes of this article.

Eligibility standards. Adopt and revise standards, by executive regulations adopted by the county executive under method (2) of section 2A-15 of this Code, for eligibility for renting or purchasing opportunity housing, and establish and revise the rents, sales prices or charges therefor; such rents, sales prices or charges to be based upon a net of maximum income or other financial limits to be established and revised by the county executive for eligibility and admission to such opportunity housing. In establishing and revising such income limits, the county executive shall consider all available statistical data indicating the minimum rentals and sales prices of dwelling units or housing available or being produced in the private market, including sales price data from the county's department of finance; the vacancy ratio in rental units; the currently prevailing prices at which private enterprise can and will produce sales and rental units; and any other statistical data which at the discretion of the county executive is deemed appropriate and relevant to the general market and economic conditions that currently exist.

Investigate and plan. Investigate into living and dwelling conditions and into possible means and methods of improving such conditions; to determine where slum areas exist or where there is a shortage of decent, safe and sanitary dwelling or housing accommodations; to make or have made all studies, surveys and plans necessary to carry out the purposes of this article, and to adopt or approve, modify and amend such plans; and to cooperate with the federal government and the state, or any political subdivision thereof, in planning actions to be taken to remedy problems of housing in connection with the purposes of this article.

Repurchase option. As consideration for the assistance provided the purchaser of an opportunity housing unit by the county pursuant to this article, the county executive, his or her designee or any agency or corporation empowered to carry out the powers granted by this article, may require the purchaser, prior to the sale of such housing unit, to grant by written agreement to the county or said agency or corporation an irrevocable option to repurchase said housing unit for a period of up to five (5) years if the purchaser desires to sell said unit for any reason. The price to which the purchaser shall be entitled under this agreement is the price that was paid by the purchaser plus that percentage of the unit's appreciation in value attributable to the increase in the cost-of-living for the period between purchase and sale, as determined by the Consumer Price Index for All Urban Consumers (CPI-U) for the Washington-Arlington-Alexandria Core Based Statistical Area (CBSA), as published by the United States Department of Labor, Bureau of Labor Statistics, plus the value of improvements beyond normal maintenance. If more than one consumer price index is published by the federal government, then the county executive, his or her designee, or any agency or corporation empowered to carry out the powers of this article, shall determine which index is to be applied.

Loans, subsidies, mortgages. Make mortgage loans and rent subsidy payments to persons of eligible income; make construction loans and long-term mortgage loans to any person, firm, partnership, association, joint venture or corporation, public or private, to produce housing for persons of eligible income; purchase mortgages secured by housing for persons of eligible income.

Exercise of powers. Exercise all, or any portion or combination of, the powers and authorizations herein granted.

The County Council may by resolution establish and maintain a special fund, known as the "tenant displacement aid fund", to make grants and loans to persons of eligible income.

Grant payments to the Housing Opportunities Commission may be made for the purchase of rental units converting to condominium or other status. The County Executive shall prescribe from time to time regulations, adopted under method (2) of Section 2A-15 of this Code, as he shall deem appropriate for the making of grants and the administration of the fund.

The County Executive shall prescribe from time to time regulations adopted under method (2) of Section 2A-15 of this Code, as he shall deem appropriate for the making of all grants and loans and the administration of the fund.

Eligible households are entitled to receive only a one-time benefit from the tenant displacement aid fund or the condominium emergency aid fund.