Legislation in Montgomery County would push back the timing of certain development taxes, which proponents say could reduce upfront costs significantly, ease financing challenges and promote building.
Bill 22-24, introduced in the fall by Councilmember Evan Glass, D-At-Large, would defer when a developer must pay development impact taxes — fees, which can run into the millions, that offset projects’ school and transportation infrastructure ramifications — from the beginning to the end of a project’s construction. Several professionals in the commercial real estate industry lauded the legislation at a County Council public hearing Tuesday, saying it would make projects more financially feasible, without costing the county anything in the long run.
The fees are substantial enough that “they’re typically included in the financing of these projects, meaning that the developers are not only paying the impact tax, but they’re paying interest on top of that,” Brendan McKay of Bethesda’s McKay Mortgage Co. told local lawmakers in public testimony Tuesday. The bill’s “simple timing change is going to reduce the barrier of entry,” he said.
