Affordable Housing Payment In Lieu of Taxes Expansion Act
Summary
HB390, the Affordable Housing Payment In Lieu of Taxes Expansion Act, authorizes county governments and owners of rental housing property to enter into payment-in-lieu-of-taxes (PILOT) agreements tied to affordable housing commitments. Under the bill, a property used for rental housing may receive an exemption from county property tax if the owner agrees to pay a negotiated amount instead of the full tax and commits to keep at least 25% of the units affordable for at least 15 years. The bill also allows counties to require a higher affordability percentage in a negotiated agreement.
The measure defines “affordable” housing using existing Maryland law: housing costs may not exceed 30% of household income, and affordable dwelling units are those affordable to households earning 60% or less of area median income. The bill takes effect June 1, 2025, and applies to taxable years beginning after June 30, 2025.
Impact
HB390 adds a new section to the Tax-Property Article authorizing a county-level property tax exemption structure for rental housing projects that preserve affordable units through long-term PILOT agreements. It expands local government flexibility to negotiate tax relief in exchange for affordability requirements, while leaving counties discretion to set stricter terms. The bill affects owners of rental housing, county governments, and tenants seeking affordable units, and it may influence future affordable housing development and preservation strategies across Maryland counties.
Sentiment
The bill appears to have broad legislative support, passing the House 99-38 and the Senate 37-10. The vote totals suggest general agreement with the policy goal of encouraging affordable housing through tax incentives, though the non-unanimous margins indicate some reservations. No committee transcript was provided, so the available record shows support in both chambers but not detailed debate.
Contention
The main point of contention is the balance between tax relief for property owners and the affordability obligations attached to that relief. Supporters likely view the PILOT structure as a tool to preserve or create affordable rental units, while opponents may be concerned about reduced county tax revenue, the adequacy of the 25% affordability threshold, or whether counties should have this level of discretion. The bill’s allowance for counties to require a higher percentage of affordable units suggests local flexibility, but also indicates that the minimum standard itself may have been a negotiated compromise.