HB1279 alters Maryland’s catalytic revitalization project tax credit to broaden the kinds of projects that can qualify and to change how the credit is claimed. Under the bill, a catalytic revitalization project can include substantial rehabilitation of certain former federal or state properties, as well as projects located in or near transit-oriented development areas or within one-half mile of subway, light rail, or rail passenger stops. The bill also adds a new category for workforce housing projects, defined as projects in which at least 20% of residential units are workforce housing units.
The bill changes the credit structure for workforce housing projects so that the credit is claimed in a different schedule than the standard project credit. It also increases the annual statewide cap on issued tax credit certificates from $15 million over a two-year period to $30 million per year, and changes the application window from once every two years to once each year. At the same time, the Secretary of Housing and Community Development is prohibited from accepting applications for transit-oriented development or workforce housing projects unless the Secretary certifies that the State has not yet met continued production targets for housing units. The bill also directs regulations to emphasize applications that promote affordable housing or workforce housing.
In practical terms, the bill amends the Housing and Community Development Article to expand eligibility, adjust credit timing, and modify administrative limits for the program. It affects individuals, nonprofit organizations, and business entities seeking tax credits for qualifying rehabilitation and construction costs, and it gives the Secretary more flexibility to issue certificates in phases and to reallocate revoked credits. The bill applies to initial credit certificates issued on or after July 1, 2026.
The overall sentiment appears strongly favorable. The bill passed both chambers with large margins, including unanimous passage in the Senate and a wide House majority, and it was ultimately approved by the Governor. That voting pattern suggests broad bipartisan support for using the tax credit to encourage redevelopment, transit-adjacent investment, and housing production.
There is little direct evidence of controversy in the available record, but the main policy tension is between expanding the credit to support more housing and redevelopment versus limiting awards when the State has already met housing production targets. Another possible point of debate is the higher annual cap on credits, which increases potential state revenue exposure, though the bill pairs that expansion with targeting provisions intended to prioritize affordable and workforce housing.
Impact
HB1279 amends the Housing and Community Development Article provisions governing the catalytic revitalization project tax credit. It expands the definition of qualifying projects, adds workforce housing projects as a preferred category, changes the timing and calculation of credits for those projects, raises the annual aggregate cap on certificates, and shifts the application cycle from every two years to every year. It also directs the Department to prioritize affordable housing and workforce housing in regulations and limits acceptance of certain housing-related applications unless housing production targets have not been met.
Sentiment
The bill appears to have been received positively and with little opposition. It passed the House 118-8 and the Senate 46-0, indicating broad support across both chambers. The final enactment and gubernatorial approval further suggest consensus around using the tax credit as a redevelopment and housing policy tool.
Contention
The main substantive issue is how broadly the tax credit should be used and when it should be available. Supporters likely favored expanding eligibility to transit-oriented development and workforce housing, while the bill’s restriction on accepting those applications unless housing production targets are unmet reflects concern about over-subsidizing projects when housing goals are already being met. A secondary point of contention is fiscal: increasing the annual cap from $15 million over two years to $30 million per year increases the State’s potential tax expenditure, even as the bill tries to steer benefits toward housing-related projects.