Despite overwhelming approval in a 10-1 vote from the County Council, on Monday County Executive Marc Elrich vetoed the bill that would offer a 20-year property tax abatement on conversion of high-vacancy commercial properties into housing. He was joined by community advocates who are also against the bill 2-25.
Bill 2-25 is part of county councilmembers’ group of housing proposals called “More Housing N.O.W.” The bill requires a Payment in Lieu of Taxes (PILOT) for residential development converted from a property designated for commercial use, with at least a 50% vacancy rate. At least 17.5% of units in new residential developments would have to be affordable to households earning 60% or less of the area median income.
After the council gets formal notice of the veto, Council President Kate Stewart will schedule a vote to reenact the bill, per a council spokesperson.
Elrich said the bill “has no meaningful level of affordable housing. If we’re going to give a subsidy, we ought to be achieving some goal other than making a developer rich.”
The council’s vote was nearly unanimous to approve the bill. Councilmember Natali Fani-González and Councilmember Andrew Friedson are lead sponsors.
In a written statement, Fani-González said, “While I am disappointed–though not surprised–to see the County Executive veto Bill 2-25, the Council overwhelming approved this legislation precisely because how good of a deal this is for the County.”
Councilmember Friedson stated, “I remain disappointed by the continued peddling of misinformation. The Council remains focused on addressing the scourge of office vacancies on our economy and community. We know that vacant buildings reduce resources for the county and repurposing them into residential opportunities will generate more revenue, not less. I am confident that we will overturn the veto.”
Fani-González said, “Beyond being a drag on their communities, these vacant office buildings are currently paying very little in property tax and will be paying even less into the future as they depreciate once they are reassessed, or their tax bills are appealed. For context, the assessed value of office real estate is only six percent of total assessed value in the county, and the highly vacant office buildings represent a mere fraction of that. With redevelopment into multi-family housing, the County will be receiving new impact taxes for schools and transportation, additional income taxes from the new residents, and revenue from fees, in addition to the spillover benefits of new construction jobs and increased economic activity at local businesses. Moreover, at the end of the PILOT term, the property tax receipts from the redeveloped building will be significantly higher due to a ten-fold increase in value relative to the vacant office building, based on conservative estimates.”
Councilmember Will Jawando was the only member to vote against the bill.
To override the veto, the council must have seven votes out of 11 members. To maintain the veto, Elrich would need four councilmembers along with Jawando to support his veto.
