Acting 17 months after Baltimore’s inclusionary housing law expired, the City Council tonight passed a successor bill designed to provide 10% affordable housing in new, rehabbed or converted apartment buildings that receive public subsidies.

The legislation, spearheaded by Councilwoman Odette Ramos, is envisioned to create about 150 affordable units a year and would fulfill the city’s commitment to a fair housing plan, whose non-compliance at present threatens the flow of future federal housing dollars.

“There’s no perfect bill,” Council President Nick Mosby proclaimed after the legislation was approved by a lopsided vote. “But this is a bill we can be extremely proud of all the hard work.”

That hard work included agonizing committee delays and fully 21 different bill versions, capped by last-minute objections by Mayor Brandon Scott’s senior staff.

Deputy Mayor Justin Williams last week warned the Council that the bill “could lead to unsustainable financial commitments for the city,” lacked “transparency” and had not received sufficient input from developers and the real estate industry.

“It’s essential to explore alternative strategies, such as bonus density, which can incentivize the creation of affordable units without directly straining the city’s budget,” Williams wrote, requesting “additional time to revise the legislation, ensuring it aligns with our collective objectives.”

The Council ignored the administration’s request for a delay, and tonight the main bill passed on second reader with only one opponent, Northwest Councilman Isaac “Yitzy” Schleifer.

A floor amendment to a companion bill, described as “hostile” by Mosby, was defeated 8-6, with one abstention.

Final passage of both bills is expected at the Council’s December 4 meeting.

Scott Takes Credit

Following the Council’s action, Scott struck a different tone, issuing a statement claiming credit for advancng fair housing for all.

“This bill is a big step for inclusionary housing in Baltimore,” Scott said.

“I am proud to help work together in order to build a better, more inclusive Baltimore alongside Councilwoman Ramos, our housing advocates and everyone who has made inclusionary housing a priority.” (FULL STATEMENT BELOW.)

The main bill would require residential buildings with 20 or more units that receive PILOTS, TIFs, Historic Tax Credits and other subsidies from the city to make 5% of the units available for households earning 60% of Area Median Income and 5% for those with incomes at 50% AMI.

That would make a family of four, with an income of approximately $60,000 annually, eligible for “affordable” rent in housing that’s historically excluded the poor.

“We’re working to correct the racist housing policies of the past,” Ramos said today.

Developers Get New Subsidy

The difference between market-rate rent and the affordable rent will be made up by a new tax credit to developers who construct environmentally friendly “green” buildings, according to the companion bill.

The new subsidy may have unintended consequences on future budgets, Deputy Finance Director Bob Cenname has warned, saying that Baltimore currently faces a $100 million budget shortfall in fiscal 2025. The Ramos legislation calls for a study of the law’s impact on city finances after three years of existence.

The original affordable housing law, passed in 2007, created just 34 units during its 14 years of existence.

Most cities do not offer cash incentives for inclusionary housing, but Baltimore has long clung to the concept.

Most new apartment buildings along the harborfront and downtown – many of them receiving millions of dollars in TIF, PILOT and Historic Tax credits – were able to get waivers from the requirement of 20% affordable housing.

After the law lapsed in June 2022, luxury developments were greenlighted by the city without any developer commitment to affordable units.

Nationwide, more than 1,000 jurisdictions in 31 states and the District of Columbia have inclusionary housing laws.

Most do not provide cash incentives or offsets as part of their policies, but Baltimore has long clung to the concept that developers must be “made whole financially” for offering units to low-income families.

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Mayor Scott’s Statement on Inclusionary Housing:

“Inclusionary housing is a critically important tool to advance equitable neighborhood development and ensure we are able to foster vibrant, inclusive communities across Baltimore, and I wholeheartedly support it. While my administration expressed fiscal concerns with previous versions of the bill – and there are a lot of conversations to be had as we operationalize it in practice – this bill is a big step for inclusionary housing in Baltimore.

“In the birthplace of redlining, we have to be intentional about undoing racial and socio-economic segregation as well as the decades of intentional disinvestment that has harmed our communities.

“This is crucial work, and I am proud to help work together in order to build a better, more inclusive Baltimore alongside Councilwoman Ramos, our housing advocates, and everyone who has made inclusionary housing a priority. We will continue to move forward in partnership to implement this legislation in practice and optimize the way our City provides and incentivizes affordable housing opportunities to benefit all of our neighborhoods.”