The Maryland House of Delegates passed HB 765, legislation to incentivize economic development and increase affordable housing stock by enabling local governments to enact property tax credits for specified hotel and residential development projects. In addition, the Maryland Senate passed a nearly identical bill, SB 321.

MACo supports the bills and generally advocates for legislation providing broad authority to enact tax incentives for revitalization and tax relief purposes. Counties prefer the approach offered by these bills, as they provide local autonomy to determine the best way to offer these incentives rather than those that mandate reductions in local revenue sources.

The bills authorize local governments to grant a property tax credit for a hotel and residential development project that is newly constructed or involves substantial rehabilitation or revitalization of existing structures and substantially increases the property’s assessed value. In addition, if the development includes more than twenty residential units, at least fifteen percent of all residential units must be affordable for households earning less than eighty percent of the area’s median income.

Furthermore, the bill authorizes local governments to provide, by law, for the duration of the credit, the maximum assessed value of a dwelling that is eligible for the credit and, if necessary, any additional eligibility criteria. This will allow each jurisdiction that enacts the credit to tailor it to their community needs. Additionally, it gives each county broad discretion to determine how much revenue it is willing to forego to provide the desirable benefits enabled by the bill.

The Senate and House must pass the exact version of the bill before it can become law.

Stay tuned to Conduit Street for more information.