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In this Article, the following words have the following meanings:
(a) Area-wide median income means the latest published income level determined to represent the median income for the Washington area by the U.S. Department of Housing and Urban Development, adjusted for household size.
(b) Consumer Price Index means the latest published version of 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, or any similar index designated by regulation.
(c) Date of original sale means the date of settlement for purchase of a workforce housing unit.
(d) Date of original rental means the date that the first lease of a workforce housing unit takes effect.
(e) Department means the Department of Housing and Community Affairs.
(f) Developer means a person or other legal entity that seeks to develop a housing project.
(g) Director means the Director of the Department or the Director’s designee.
(h) Dwelling unit means a building or part of a building that provides complete living facilities for one family, including at a minimum facilities for cooking, sanitation, and sleeping.
(j) Workforce housing project means a housing or mixed-use project where dwelling units are sold or rented to households with incomes at or below 120% of the area-wide median income under an agreement between the developer and the Director.
(k) Workforce housing unit means a dwelling unit in a workforce housing project that is subject to rent limits or sales controls under this Article.
(l) Program means the workforce housing program. (2006 L.M.C., ch. 23
, § 1; 2010 L.M.C., ch. 11
, § 2; 2018 L.M.C., ch. 3, §1.)
(a) Establishment. The Department must establish and administer a workforce housing program.
(b) Purpose. The purpose of the program is to promote the construction of housing affordable to households with incomes at or below 120% of the area-wide median income. The construction of that housing is intended to:
(1) allow households with incomes at or below 120% of the area-wide median income to have greater housing choices in the County;
(2) increase the availability of housing in the County for public employees and other workers whose income cannot support the high cost of housing that is located close to their workplace and who, as a result, are increasingly priced out of housing opportunities;
(3) assist County employers in reducing critical labor shortages of skilled and semi- skilled workers by providing housing that will be accessible to the worker’s workplaces; and
(4) reduce traffic congestion by shortening commute distances for employees who work in the County but who otherwise would live elsewhere and encouraging more employees to live in Metro Station Policy Areas.
(c) Relationship to other affordable housing programs. This program is intended to complement the moderately priced dwelling unit (MPDU) program under Chapter 25A and other County programs designed to promote affordable housing.
(d) Option. A developer of any subdivision with 35 or more market-rate dwelling units at one location, as defined in Section 25A-3(b), may build workforce housing units that are expressly allowed in the applicable zone under Chapter 59.
(e) Regulations. The County Executive must adopt regulations under method (1) to administer this program. These regulations:
(1) must set maximum sale prices and annual rent limits, sale price and rent ranges (which must promote a variety of different prices or rents at each workforce housing location), minimum unit type and bedroom requirements, and income eligibility standards;
(2) must govern notice to the Department of sales and rentals, foreclosures, and other relevant procedural matters; and
(3) should, wherever possible, be similar to or at least consistent with the regulations that govern the MPDU program.
The regulations governing eligibility must include some preference for applicants who either reside in the County or work or have received a job offer in the County.
(h) Annual report. Each year by March 15 the Director must report to the Executive and Council, for the previous calendar year:
(1) the number of workforce housing units approved and built; and
(2) each alternative location agreement approved under Section 25B-26, and the location and number of workforce housing units that were involved in each agreement. (2006 L.M.C., ch. 23, § 1; 2010 L.M.C., ch. 11, § 2.)
(a) Agreement.
(1) After the developer of a housing project has obtained approval from the Planning Board of a site plan that includes the number of workforce housing units approved under any applicable provision of Chapter 59 and all other necessary regulatory approvals, the Director and the developer must execute an agreement assuring compliance with this Article by the developer and any successor in interest. The Director must attach a copy of the approved site plan to this agreement.
(2) The agreement must incorporate a staging plan for the construction of workforce housing units, the mix of dwelling unit sizes and types, and the maximum selling price or annual rent for each unit. The staging plan must require all workforce housing units to be built before or at the same time as the other dwelling units. Where appropriate, the agreement must reflect conditions required as part of other regulatory approvals.
(3) The agreement must require that the number of efficiency and one-bedroom workforce housing units each must not exceed the ratio that market-rate efficiency and one-bedroom units respectively bear to the total number of market-rate units in the subdivision. The Director must not approve an agreement that reduces the number of bedrooms required by this subsection in any workforce housing unit.
(b) Issuance of building permit. The Director of Permitting Services must not issue a building permit for any development where workforce housing units are approved under Chapter 59 until the agreement required by subsection (a) is executed. After an agreement is executed under subsection (a), the Director must certify to the Director of Permitting Services before a building permit is issued that all applicable requirements of this Article have been met. If all workforce housing units are not built before or at the same time as other dwelling units as required in the staging plan, the Director of Permitting Services may:
(1) withhold any later building permit for any part of the same development until all workforce housing units designated in the staging plan are built;
(2) issue a stop work order, effective until all workforce housing units designated in the staging plan are built; or
(3) withhold any use and occupancy permit for other units in the development until all workforce housing units designated in the staging plan are built. (2006 L.M.C., ch. 23, § 1; 2010 L.M.C., ch. 11, § 2.)
(a) Sales; control period. The sale price of a workforce housing unit must be controlled under this subsection for 20 years after the date of original sale. During the applicable control period, a workforce housing unit must only be sold to an individual with a household income that does not exceed 120% of the area-wide median income or a lower amount set by regulation. Any workforce housing unit offered for sale, or for resale during the control period, must first be offered exclusively for 60 days to the Department and the Housing Opportunities Commission, in that order. The Department and the Commission may buy a workforce housing unit at any time during the control period, and may resell the unit to an eligible person. A resale by the Department or Commission starts a new control period.
(b) Resale price during control period.
(1) Resale price. Except in a foreclosure proceeding, a workforce housing unit constructed or offered for sale under this Article must not be resold during the applicable control period for a price greater than the maximum sale price for a similar new workforce housing unit under applicable regulations on the date of the resale.
(2) Return to seller. The Department must supplement any bona fide price that the seller of a workforce housing unit receives from the buyer under paragraph (1) so that the seller receives a total of the original sale price of the unit plus:
(A) an allowance for closing costs which were not paid by the initial seller, but which will be paid by the initial buyer for the benefit of a later buyer;
(B) the fair market value of any capital improvement that the Director finds was needed to maintain the equity of the unit;
(C) a percentage, set by regulation, of the difference between the unit’s appraised market value (as defined by applicable regulations) when the seller bought the unit and its appraised market value when the seller offered the unit for sale, which must not exceed 50% of the total price appreciation; and
(D) a reasonable sales commission.
The Department may use funds in the Housing Initiative Fund to pay all or part of the amount returned to the seller under this paragraph, to the extent provided in applicable regulations.
(3) Payment to Housing Initiative Fund. If the bona fide price the seller receives is greater than the amount allowable under paragraph (2), the seller must pay the difference to the Fund. The Director must find that the price and terms of a sale covered by paragraph (1) are bona fide and accurately reflect the entire transaction between the parties so that the full amount required under this Section is paid to the Fund.
(c) Resale price after control period ends.
(1) For the first sale of a workforce housing unit after the applicable control period ends that exceeds the allowable price specified under subsection (a), the seller must pay to the Housing Initiative Fund one-half of the excess of the total resale price over the sum of:
(A) the original appraised market value;
(B) a percentage of the unit’s original appraised market value equal to the increase in the cost of living as determined by the metropolitan area Consumer Price Index;
(C) the fair market value of capital improvements made to the unit between the date of original sale and the date of resale; and
(D) a reasonable sales commission.
The Director must adjust the amount paid into the Housing Initiative Fund in each case so that the seller retains at least $10,000 of the excess of the resale price over the sum of the items in subparagraphs (A) — (D).
(2) The Director must find that the price and terms of a sale covered by paragraph (1) are bona fide and accurately reflect the entire transaction between the parties so that the full amount required under paragraph (1) is paid to the Fund. When the Director finds that the amount due the Fund is accurate and the Director of Finance receives the amount due, the Director must terminate the controls imposed by this section and execute a release of all restrictive covenants.
(d) Limits on rents. Unless the unit was previously sold under subsection (c), any workforce housing unit built or offered for rent under this Chapter must not be rented for 99 years after the date of original rental at a rent greater than the rent allowed for workforce housing units under this Article and applicable regulations. Rent may include parking but does not include utilities when they are paid by the tenant. Different rents must be set when utility costs are paid by the owner and included in the rent. During the applicable control period, a workforce housing unit must only be rented to an individual with a household income that does not exceed the limits set under this Article.
(e) Foreclosure. If a workforce housing unit is sold in a foreclosure proceeding begun by a lending institution, the Director must terminate the workforce housing controls and execute a release of all restrictive covenants if all proceeds of the sale, if any, that must be paid to the Housing Initiative Fund have been paid. If a foreclosure sale of a workforce housing unit occurs during the applicable control period, any price paid at the foreclosure sale that exceeds the price established under subsection (b), plus any reasonable costs and fees of foreclosure, must be paid into the Housing Initiative Fund. If a workforce housing unit is foreclosed after the control period, subsection (c) applies. If the unit sold was a rental unit, the Department must calculate the sale price that would have been permitted at the date of original rental as if the unit had been originally offered for sale.
(f) Bulk sales. This section does not prohibit the bulk sale or transfer of all or some rental workforce housing units if the buyer is bound by all covenants and controls on the workforce housing units. (2006 L.M.C., ch. 23, § 1; 2010 L.M.C., ch. 11, § 1.)
Editor’s noteFormer Section 25B-26, Alternative location agreement, derived from 2006 L.M.C., ch. 23, § 1, was repealed by 2010 L.M.C. ch. 11, § 2.
Former Section 25B-27, Control of sale prices; rent limits; income eligibility; foreclosures, was renumbered 25B-26 by 2010 L.M.C., ch. 11, § 2.
(a) Covenants.
(1) This Article applies to the owner and any successor in interest, assignee, or other person with a legal or equitable interest in a workforce housing unit. Before recording the plat for a workforce housing project, the owner must execute and record covenants assuring that:
(A) the restrictions of this Article run with the land;
(B) the covenants are binding on the owner, any assignee, mortgagee, or later purchaser, and any other party that receives title to the property; and
(C) the County may create a lien to collect that portion of the sale price or foreclosure sale price of a workforce housing unit which exceeds the approved resale price.
(2) Any covenant executed to satisfy paragraph (1) must be senior to all instruments securing permanent financing.
(b) Later deeds. The grantor must clearly and conspicuously state, in any purchase and sale agreement and any deed or instrument conveying title to a workforce housing unit, and the grantee must clearly and conspicuously acknowledge, that the unit is subject to this Article and the restrictions in the covenants until all restrictions are released under Section 25B-27 or another provision of law. Any deed or other instrument conveying title to a workforce housing unit during the control period must be signed by both the grantor and grantee. When a deed or other instrument conveying title to a workforce housing unit is recorded in the land records, the grantor must cause to be filed in the land records a notice of sale for the benefit of the County in the form provided by state law.
(c) Violations; enforcement.
(1) Any violation of this Article or regulations adopted under it is a class A violation.
(2) An occupancy permit must not be issued for any building to any applicant, or a successor or assign of any applicant, for any construction which does not comply with this Chapter. The Director of Permitting Services may deny, suspend, or revoke any applicable building or occupancy permit if the Director finds that the applicant or permittee has committed a violation of this Article. The Planning Board may revoke any previously approved preliminary plan of subdivision, site plan, or sketch plan, if the Board finds a violation of this Article.
(3) The Director may take legal action to stop or cancel any transfer of a workforce housing unit if any party to the transfer does not comply with all requirements of this Article. The Director may recover any funds improperly obtained from any sale or rental of a workforce housing unit in violation of this Article, plus costs and interest at the rate prescribed by law from the date a violation occurred.
(4) In addition to or instead of any other available remedy, the Director may take leal action to:
(A) enjoin a workforce housing unit owner who violates this Article, or any covenant signed or order issued under this Article, from continuing the violation; or
(B) require an owner to sell a workforce housing unit owned or occupied in violation of this Article to the County, the Housing Opportunities Commission, or an eligible person. (2006 L.M.C., ch. 23, § 1; 2010 L.M.C., ch. 11, § 1; 2016 L.M.C., ch. 8, § 1.)
Editor’s note—Former Section 25B-27, Control of sale prices; rent limits; income eligibility; foreclosures, was renumbered 25B-26 by 2010 L.M.C., ch. 11, § 2.
Former Section 25B-28, Compliance, was renumbered 25B-27 by 2010 L.M.C., ch. 11, § 2.