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Montgomery County Affordable Housing PILOTs

Montgomery County Affordable Housing PILOTs. Montgomery County Affordable Housing PILOTs. Why Have PILOTs? – Benefits: They lower the on-going operating expenses of a property Allows an owner to borrow more money from private sector sources, thereby, leveraging the County’s investment.

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Montgomery County Affordable Housing PILOTs

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  1. Montgomery County Affordable Housing PILOTs

  2. Montgomery County Affordable Housing PILOTs • Why Have PILOTs? – Benefits: • They lower the on-going operating expenses of a property • Allows an owner to borrow more money from private sector sources, thereby, leveraging the County’s investment. • PILOTs are also beneficial to owners of special needs housing, or housing for residents with extremely low-income where the resident’s incomes limit their ability to pay rent. • Reduction in on-going operating expenses, such as special assessments and property taxes, is critical to the success of these facilities

  3. Review Process • Handled as part of loan request review or program administrative review (ex.: MPDU program) • Reviewed & administered by DHCA • Approved & administered by Dept. of Finance

  4. Review Process • Negotiated on a property by property basis • Request can be rejected • Determine eligibility of property and owner • Determine type of property and eligibility for tax abatement

  5. Unusual Features of County Program • County Council and Finance Department “Get It” • Allows properties to borrow more from other sources • Part of economic development policy • Costs less to house people than provide them services • Project decision making delegated to county departments

  6. Unusual Features of County Program • No separate monitoring program – PILOT compliance always tied to another program that is monitoring the property

  7. Section 8 PILOTs • “Section 8” PILOTs - County has executed PILOT agreements with seven properties with project-based Section 8 contracts providing rental subsidies or reduced rents to lower income households. • These PILOTs agreements provided $542,219 in tax abatements in 2007. • In the agreements, the County agrees to reduce each property’s taxes by an amount equal to the documented losses incurred by the property’s participation in the Section 8 program (lost rent revenue, administrative costs, etc.) • Through this program, the County is preserving 382 Section 8 units. According to HOC, HUD Housing Choice Voucher subsidies average $950 per unit per month. Using this average, we estimate that the federal subsidies being received for these 382 units could exceed $4.35 million per year. Without the County assistance, the owners would not stay in the Section 8 program, and the County would lose 382 valuable housing units serving very low income families.

  8. Summary Figures • $15 million in PILOTs in current year • 100% PILOTs offered to elderly, CHDO, and Housing Authority properties • Mixed income, for-profit, non-profit properties also eligible

  9. Contact Information • Montgomery County Department of Housing and Community Affairs Rick Nelson, Director Stephanie Killian, Multifamily Housing Specialist 100 Maryland Avenue, 4th Floor Rockville, MD 20850 240-777-3693 stephanie.killian@montgomerycountymd.gov

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