On April 3, Executive Director Michael Sanderson testified before the Senate Education, Energy, and the Environment Committee with a position of Support with Amendments on HB 503 – Housing Development Act.
This bill would drastically change certain provisions of Maryland’s housing policy. MACo has worked with the sponsor, the Committee, and the Administration on amendments to fine-tune elements affecting counties, and is grateful for that collaboration. While MACo is not raising objections to other segments of the amended bill, counties continue to object to the most consequential change the bill proposes: creating two new tracks for early “vested rights” for developers. This change represents an intrusion into local land use matters and disposes of decades of commonsense public policy, which has correctly left this very local matter in local hands.
In Maryland, “vesting” in land use refers to a protected status for a development plan, meaning a developer can proceed with development according to the approved plan and laws in effect at the time of approval, even if subsequent changes in law would otherwise prevent it.
Maryland is considered a “late-vesting” state, where the development rights generally vest after significant progress has been made on the project, such as visible construction or the issuance of a building permit. This long-held public policy protects communities. Late vesting ensures that the community’s makeup and needs are still being met by the development project and that the local infrastructure and resources available are sufficient for the project. Development projects sometimes take years from initial approval to actual construction. Many factors are in play on both sides of the process that could cause these delays. Communities can grow, shift, or otherwise change drastically in the space of just a few years, so late vesting is a sensible policy that ensures local infrastructure – like wastewater services, roads, and schools – are still sufficient for the project. Early vesting has long been a “wish list” item of developers, as it locks in approval for a project that may take many years to implement and might not match the capacity of the intended area, once it’s actually ready for construction.
The early vesting components of HB 503 provide avenues for developers to lock in approval in perpetuity beginning at the time of application, and obtain expressly vested rights for five years following the date of an initial approval of a project.
For years, Maryland State leaders have recognized that early vesting was not a solution toward affordable housing. A widely shared Zillow study last summer showed that 7 out of 10 areas with the most acute housing shortages in the United States were among the minority of states with such “early vesting” policies. Counties suggest that not only are these provisions imperfectly crafted and subject to lengthy and costly interpretation, but will ultimately represent unwarranted and unwise policy.
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