Land Use - Transit-Oriented Development - Alterations (Maryland Transit and Housing Opportunity Act)
SB389, the Maryland Transit and Housing Opportunity Act, makes a series of changes intended to encourage development around rail transit stations and transit-oriented development (TOD) areas. The bill would automatically designate certain TOD areas as enterprise zones if they are served by a rail station with at least hourly service during weekday business hours, with different rules depending on whether the TOD was designated before or after October 1, 2026. It also allows local governments to opt out of that automatic enterprise-zone designation when the TOD is first approved, by written notice to the Sustainable Growth Subcabinet.
The bill also limits local land-use control in specific TOD areas. It restricts local governments from imposing minimum off-street parking requirements on residential or mixed-use projects within one-quarter mile of qualifying rail stations unless an adequate parking study is completed and the Department of Transportation concurs. It requires local zoning to allow mixed-use development within one-half mile of qualifying rail stations, and it bars local restrictions on land use classification, height, and setbacks for certain state-owned transportation land near rail stations when a TOD plan has been approved and coordinated with the local jurisdiction. The bill preserves local authority over environmental, public health and safety, and adequate public facilities matters.
In the economic development area, SB389 expands the definition of enterprise zone to include qualifying TODs and directs the Maryland Economic Development Corporation to prioritize certain redevelopment projects under the Strategic Infrastructure Revolving Loan Program, especially projects that activate underused public land and redevelop state-owned land near rail stations. It also adds project labor agreements as a scoring preference for transit-oriented development financing. In addition, the bill delays collection of local development excise taxes and impact fees for qualifying residential or mixed-use TOD projects until construction is complete and occupancy approval is issued, while allowing local governments to withhold or revoke occupancy approvals if the fees are not paid within a reasonable time.
The overall sentiment reflected in the bill’s passage was strongly favorable. The Senate passed the bill unanimously, and the House passed it with a substantial majority, indicating broad support for the bill’s transit-oriented housing and redevelopment goals. The lack of committee transcript material limits insight into detailed debate, but the voting history suggests the measure was viewed as a pro-housing, pro-transit, and economic development package.
The main points of potential contention are local control and development costs. The bill reduces local discretion over parking minimums, zoning intensity, and fee timing in qualifying transit areas, which could concern counties and municipalities that rely on those tools to manage growth and fund infrastructure. At the same time, the bill includes safeguards for local opt-outs in some TOD designations, preserves certain police-power and public-facility authorities, and delays rather than eliminates development fees, which may have helped secure broad support.
SB389 amends the Economic Development, Land Use, Local Government, and Transportation Articles to create new statewide rules for qualifying transit-oriented development areas. It expands enterprise-zone eligibility, changes how local zoning and parking rules apply near rail stations, prioritizes certain TOD-related projects for state financing, and postpones collection of development excise taxes and impact fees for qualifying residential and mixed-use projects until later in the development process. The bill also adds a project labor agreement preference for certain transit-oriented development grant and loan applications.
The bill appears to have been broadly well received. It passed the Senate 44-0 and the House 98-33, suggesting strong bipartisan support overall, especially for its housing, transit, and redevelopment objectives. The available record does not include committee transcript debate, but the vote margins indicate the bill was generally viewed favorably despite some likely concerns about local land-use authority and fee collection.
The most notable contention points are the bill’s limits on local government authority and its treatment of development fees. Counties and municipalities may object to the restrictions on parking minimums, zoning controls, and the delayed collection of impact fees and excise taxes, since those tools are often used to manage growth and fund infrastructure. The bill partially addresses these concerns by allowing local opt-outs for some TOD enterprise-zone designations, preserving local authority over environmental and public safety matters, and allowing fee collection before final inspection in some cases.