Downtown Columbia Affordable Housing and TIF Proposals
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Read the news release

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Check the FAQs below for periodic updates, as we respond to inquiries from residents.
FAQs - Affordable Housing Plan

1. Why do we need this new agreement when there is existing legislation requiring Howard Hughes to pay a fee for developing affordable units?

The current law requires Howard Hughes to pay approximately $38 million in fees over the life of the development.  This fund would be held by the Columbia Downtown Housing Corporation (CDHC).  However, the CDHC is limited in its ability to use the fund because it owns no land and had little leverage with existing land owners in Downtown Columbia to facilitate the development of affordable housing.

2. So how much was this fee and how was it going to be used?

It would generate about $38 million (in 2010 dollars) over the life of Downtown Columbia development and be earmarked for affordable housing. However, there is no mechanism in place to assure that the housing is built.

3. Is Howard Hughes getting a better deal under the new agreement?

The Joint Recommendations holds Howard Hughes’ affordable housing obligations to the same value through a combination of fees, land transfers and the construction of units.

4. Why did the Administration and County Executive’s office get involved?

The Columbia Downtown Housing Corporation approached the County Council asking for legislative changes.  The County Council instructed the CDHC, Housing Commission, Howard Hughes Corporation and the County to work jointly to develop a new affordable housing program for Downtown Columbia.

5. Who is responsible for paying for and building affordable housing in Downtown Columbia under the new plan?

The Joint Recommendations rely on a number of funding sources to facilitate the development of affordable housing; none of those sources is Howard County Government. Howard Hughes bears the cost of building affordable units in its market rate projects. Howard Hughes bears the cost of conveying land to the Housing Commission to be used for affordable housing that could otherwise be used for profit-generating projects.  Howard Hughes bears the cost of contributing to finance gaps experienced by the Housing Commission as it develops Low Income Housing Tax Credit (LIHTC) projects.  CDHC will use the fees it has already received from Howard Hughes to cover utility allowances for residents of affordable units.  The Housing Commission will rely on state and federal tax credits to finance Low Income Housing Tax Credit projects.

6. How does this housing agreement relate to the TIF?

The new residential makeup resulting from the Joint Recommendations has been factored into the fiscal impact study conducted on the TIF.

7. What will be different now than compared to a year ago?

If the Joint Recommendations Plan passes, the County will have a law that facilitates the development of affordable housing as new residential buildings are constructed.  Six years after the Downtown Columbia Plan was approved, not a single affordable unit has been built in Downtown.

8. How many total residential units will be built as a result of this agreement?

6,400 total – the 5,500 as approved in the Downtown Columbia Plan and 900 affordable units.

9. How will these units impact our taxes and schools that are overcrowded?

Our analysis of the request for tax increment financing made by the Howard Hughes Corporation (HHC) has determined that significant new tax revenues are likely to result from the HHC’s development plan for Downtown Columbia.  We believe these new revenues will be more than sufficient to cover the County’s TIF debt service obligations and will produce new tax revenues sufficient to cover the capital costs for other capital project needs driven by the development effort, including funds for the construction of a new Faulkner Ridge Elementary School.  The Department of Planning and Zoning and the Howard County Public School System are required to conduct numerous pupil generation studies for Downtown Columbia.  To date, they have found that an additional school will satisfy the growth spurred by the Downtown Columbia development; however, this situation will be closely monitored throughout the build-out of Downtown.  

10. Why is Howard Hughes building fewer than half the affordable units?

Howard Hughes is contributing land and finance gaps to the Housing Commission for the remaining units.  One goal of the Joint Recommendations was to have multiple developers own and be responsible for affordable housing.

11. Why isn’t Howard County applying the same rules to Howard Hughes it applies to other developers?

Even though the CDHC made an initial recommendation to institute a 15 percent Moderate Income Housing Unit (MIHU) requirement for Downtown Columbia, the Joint Recommendations results in a public-private partnership that produces a multi-faceted approach to affordable housing that creates greater certainty that affordable units will be developed.

12. Why is Howard County giving Howard Hughes a bonus density when they can build 5,500 new units?

The Downtown Columbia Plan does not state whether any of the 5,500 units must be affordable.  Density bonuses commonly are used as a tool to facilitate the development of affordable housing in many communities throughout the country.  All market-rate units in Low Income Housing Tax Credit projects will count toward the 5,500 unit total, so Howard Hughes will not be receiving a 1-to-1 density bonus for the 900 affordable units.

13. Why do we need public parking?

Public parking is critical to a thriving downtown and, in particular, to support community uses. There is currently no publicly owned or controlled parking in all of Downtown Columbia, and public access to parking owned exclusively by private entities cannot be guaranteed.

14. Why did Howard County reduce Howard Hughes’ parking obligations?

As with density bonuses, parking modifications are often a tool used to facilitate the development of affordable housing, due to the high cost of structured parking.  The Department of Planning and Zoning analyzed what the appropriate residential parking ratios should be for Downtown Columbia to achieve the urban design concept and found the existing ratio for studio and one-bedroom units was too high, requiring more spaces than necessary.  At the same time, a multi-modal transit plan will be integrated into the Downtown to meet the objectives of reducing vehicular travel for residents and patrons.

15. Was there public input before recommending this plan?

The Joint Recommendations were presented at a public work session to the County Council.  The Administration presented a series of studies analyzing the Joint Recommendations at a number of public work sessions with the County Council.  Howard Hughes held a public pre-submission meeting on the Development Rights and Responsibilities Agreement (DRRA). The Planning Board held three public hearings and work sessions on the Joint Recommendations. The County Council has begun its public deliberation on the Joint Recommendations. Over the course of development of the plan, there have been many opportunities for public input.

16. Why did the County agree to a DRRA? Does it eliminate the County’s ability to change regulations if the Plan doesn’t work?

Under this agreement, the County can terminate the agreement if the terms compromise the County’s ability to meet the health, welfare and public safety needs of the county.

17. Why is Howard County allowing residential development over the Banneker Station and other Low Income Housing Tax Credit sites knowing there will be an impact to traffic?

Every project included in this plan will still have to go through and meet the requirements of the County’s approval process, including, but not limited, to Final Development Plan, Site Development Plan, and Adequate Public Facilities Ordinance.

18. Why is the County allowing affordable housing to be concentrated under the Joint Recommendations?

Every market-rate project will have affordable units.  All of the Low Income Housing Tax Credit projects will be split between market-rate and affordable units, with the exception of the Temporary Fire Station, which will be an age-restricted project, and the Transit Center, where the affordable units will be interspersed with market-rate units built by Howard Hughes.
FAQs - TIF/Special Taxing District

1. Why is Howard Hughes being allowed to build so much commercial and residential square-footage in Downtown Columbia when it has always been green space?

The County’s General Plan and Downtown Columbia Plan have long anticipated and prepared for the development of this space for this purpose – the development of a downtown district to serve the needs of our growing county.

2. Where will new residents and patrons of businesses park?

An additional 5,851 public parking spaces will be constructed throughout Downtown Columbia including a 2,545-space public parking garage to be funded through the tax increment financing request presently being considered by the County Council. 

3. The library and fire station in Downtown Columbia are old and small – how will these facilities keep up with this growth?

The County’s financing of critical infrastructure will facilitate the development of Downtown Columbia and is projected to generate substantial new tax revenues (tax increment).  After satisfying the debt service requirements for the infrastructure, the County has identified additional capital projects including a new library and fire station that will be funded from the tax increment.

4. Why does Howard Hughes need a TIF?

Our analysis of the Howard Hughes development plan for the Phase I Crescent  effort indicates the full plan would likely generate a below market rate of return and is thus not feasible.  The County’s financing of some of the critical infrastructure improvements required for the development of the Phase I Crescent increases the likelihood of a successful development effort.  The Howard Hughes Corporation is expected to invest approximately $618 million for development of the Crescent Phase I area alone. Without the County’s infrastructure investment, the development of Downtown Columbia would not proceed in an organized and comprehensive manner; the breadth and pacing of the development as presently envisioned would be less likely.

5. How does the TIF benefit the taxpayers?

Tax Increment Financing enables a local government to more effectively manage development and growth.  The cost of the critical infrastructure investment required for growth comes not from existing tax revenues, but from new tax revenues generated by the development built upon that infrastructure.  It is also helpful to note that the additional capital projects to be funded from the additional tax revenues generated from the development would otherwise have been funded from non-development district projected future tax revenues, competing with other county capital project needs.

6. How does a TIF work?

Tax Increment Financing represents the cost of infrastructure investment required to support development or re-development.  Repayment of the debt issued for a TIF project comes not from existing tax revenues, but from new tax revenues generated by the development built upon that infrastructure.  Most jurisdictions in Maryland, including Howard County, also create a companion Special Taxing District to provide a backup source of revenue to support the TIF.  In the event of a shortfall in the realization of tax increment, the developer/owner is obligated, and must agree, to pay that shortfall in the form of the special tax issued for that purpose.  The creation of the special tax requires the developer/owner to take on the development risk and provides a greater likelihood they will proceed in accordance with the development plan and schedule.

7. Who will be taxed in the Special Tax District?

The Special tax is imposed on the owners of properties in the Special Taxing District(s).  Presently that property is solely owned by the Howard Hughes Corporation.  As any of this property is sold to others, the new owners will be responsible for payment of any Special Taxes required.
 

In the event of a shortfall in the anticipated tax revenue, the owners of the properties in the Special Tax District will be required to pay that shortfall in the form of the Special Tax.  The creation of the Special Tax requires HHC and any future owners to take on the development risk and provides a greater likelihood that they will move forward in accordance with the development plan and schedule.


8. Between the housing and the TIF, if additional tax revenues from these new buildings in Downtown is just going back to Howard Hughes, how do we benefit?

A portion of the growth in new tax revenues (tax increment) expected to result from the development effort will go toward the repayment of the TIF bonds; however, the county-owned infrastructure that the TIF will pay for include water, sewer, roads, intersection improvements and a parking garage.  The tax increment projected from the development effort is also intended to finance a new elementary school, fire station, library, arts center, transit center and transportation improvements.  

9. How much money will the County see as a result of this TIF?

 

Additional property tax revenue                                $883,631,549
Other additional revenues                                            796,345,343
Total estimated revenue through 2051                $1,679,976,892

Less TIF debt service                                                     328,312,211
Less additional operating costs                                   830,121,107
Less capital costs                                                           113,687,556
Total estimated net revenue through 2051             $407,856,018

(All numbers are projected estimates) 


10. What if we don’t see as much of an increase in taxes as projected?

Special Taxing District assessment will be imposed on the owners of the property. 

11. What happens if we hit a recession and development slows down, like it did in Maple Lawn?

Special Taxing District assessment will be imposed on the owners of the property. 

12. What happens if there is no TIF?

The Downtown Columbia Plan sets forth a vision of a vibrant, mixed-use development for Downtown Columbia.  As part of that vision, public parking facilities will play a key role in facilitating a “park once” environment.  Additionally, the high development standards, with numerous mandated aesthetic and environmental enhancements, result in costs of development within Downtown Columbia that are higher than costs elsewhere.  Moreover, the need for structured parking facilities instead of surface lots significantly increases the cost of development.  

Our financial advisor, MuniCap, estimated developer returns under both a TIF and non-TIF scenario.  Under the non-TIF scenario, the estimated rate of return was prohibitively lower than the market rate of return, to the extent that it would likely either preclude the private investment of a sophisticated developer or compel such a developer to limit costs of structured payments and to lower standards. Tax increment financing increases the rate of return to a level that would incentivize a developer to proceed with developing the project in a manner that meets the requirements of the Downtown Columbia Plan.  

13. What happens if the development is so successful that the developer makes a lot more money?

A “look-back” provision is part of the agreement with HHC.  This means that HHC will submit audited statements each year to show profit earned from the development.  The County and HHC will agree on a reasonable profit to be earned by HHC from the development for those properties that are sold in that year.  The County and HHC will share in the excess profit (above the “reasonable profit”), which the County may use to pay down the TIF debt, thus accelerating the time frame for the flow of these new revenues into the General Fund for use throughout the County. 

14. Has the County provided a TIF in the past?

Yes.  The County’s first TIF project was for the Annapolis Junction Town Center/MARC Savage Commuter Rail Station.

15. What other projects in Maryland have used a TIF?

Some of the other projects in Maryland to have used a TIF include: Annapolis Town Center, Arundel Mills, East Baltimore Research Park, College Park East Campus, Hagerstown Retail Outlets, Harbor Point in Baltimore, John Hopkins Bio-Science Park, Towne Center at Laurel, White Flint, National Business Park, National Harbor, North Locust Point, Metro Centre at Owings Mills, Salisbury Mall, University Towers at Hyattsville University, Village South at Waugh Chapel and Westport in Baltimore. 

16. How has the County Administration ensured that taxpayers are protected and we will have enough resources to keep up with this development and maintain our quality of life?

The creation of the Special Taxing District and issuance of a special tax to HHC to fund any shortfall in tax increment mitigates the principal financial risk. The County Administration’s leadership at this moment recognizes a long-held and well expressed intention by the residents of Columbia to create a vital and vibrant downtown space.  The County’s partnership with HHC makes the successful completion of the Downtown Columbia Plan more likely. 

17. What’s going on with Merriweather Post Pavilion? Where will all those people park?

The planned improvements for the Crescent Phase I development will include the construction of a county-owned 2,545-space parking garage.  Merriweather has always relied on privately owned lots for parking and this plan calls for that to continue in conjunction with the public garage.  Once this legislation is passed, the long-time question of permanent parking will be resolved. 
 
As the discussion about the Pavilion’s future was discussed several years ago, parking was not resolved. In 2014 when the Pavilion’s owners, the Howard Hughes Corporation and the Downtown Columbia Arts and Culture Commission entered into a Joint Development Agreement for the revitalization and accelerated transfer of ownership of Merriweather, the question of parking was left open; a “Permanent Parking Solution” triggers an early transfer of ownership. The solution will ensure adequate parking for all Merriweather events.  

While HHC and DCACC have worked collaboratively to develop the necessary permanent parking solution, it has become clear that public parking is essential if the venue is to thrive as a cultural asset owned by a non-profit for the benefit of the community. With increasing cultural and civic uses planned for Merriweather Post Pavilion, having access to free or low-cost parking ensures that citizens can enjoy this community asset without the barrier of expensive paid parking. As the County works to revise its approach to permitting large events at Merriweather, a public garage provides a stronger means for County Government to help manage traffic flow and ensure residents and visitors can safely and efficiently get to where they need to go.

18. How does this legislation impact the transfer of ownership for Merriweather Post Pavilion?

If approved, this proposal would serve as the necessary solution for the accelerated transfer of ownership, allowing Merriweather’s future to be assured as a true cultural asset to the region, a goal shared by residents of Howard County and beyond.