The Moderately Priced Dwelling Unit Program (MPDU) here is believed to be the nation’s first mandatory inclusionary zoning law that provided a density bonus to builders to provide affordable housing.
Since the law became effective in January 1974, more than 12,000 affordable housing units have been built in the county. Montgomery is the most populous county in Maryland. Housing built under the law constituted about 8 percent of the county’s total housing stock over the last 10 years.
In existence for more than 30 years, the program has become an integrated piece of the county’s planning and housing efforts.
In general, the law requires that between 12.5 percent and 15 percent of the total number of units in every subdivision or high-rise building of 20 or more units be moderately priced. The law applies to properties zoned one-half acre or smaller and that are served by sewer and water lines. Subdivisions that are not served by public water and sewer are exempt from the requirement.
The ordinance allows a density increase of up to 22 percent above the normal density permitted under the zone. The county also has resale and occupancy restrictions on the MPDUs. To generate more funds for affordable housing, profits from the first resale of a unit after the compliance period ends are shared with a county fund.
In 2005, Montgomery County extended the control period of for-sale MPDUs from 10 to 30 years, and from 20 to 99 years for rental units.
The program markets units to renters and first-time buyers with incomes ranging from $20,000 to $68,000 for families of five or more.
A limitation of the program, however, is its reliance on a favorable housing market. The production of MPDUs is based on the production of market-rate housing.