Montgomery County is taking decisive action to expand affordable housing options and support the County’s residents with the More Housing N.O.W. (New Options for Worker) legislation package.

The comprehensive package—encompassing four pieces of legislation and two budgetary measures—seeks to stimulate housing production, facilitate adaptive reuse of commercial properties, and provide fiscal support to enhance homeownership opportunities for County workers.

Read on for more information on the legislation and click here for a schedule of public hearings on the ZTAs and bill proposals.

Expanding Workforce Housing Options: ZTA 25-02

Zoning Text Amendment 25-02 is designed to encourage the development of workforce housing in select residential zones. Under this amendment, the County Council will allow duplexes, triplexes, townhouses, and apartment buildings in R-40, R-60, R-90, and R-200 zones located along major corridors such as boulevards and downtown streets.

The amendment requires that at least 15% of units (with a minimum of one unit when three or more are built) qualify as workforce housing—defined by affordability criteria pegged at 120% of the County’s area median income.

This flexible approach not only permits a wider range of residential building types but also ensures that new developments contribute directly to the County’s affordable housing stock. Two public hearings on the package are scheduled for March 11, 2025, providing an opportunity for community input before final adoption (see details below).

Streamlining Adaptive Reuse: ZTA 25-03 and SRA 25-01

Complementing ZTA 25-02 is Zoning Text Amendment 25-03, which introduces the new Commercial to Residential Reconstruction use. This measure paves the way for converting vacant or underutilized commercial buildings—specifically, office or retail properties with at least 50% vacancy—into residential use.

The amendment provides an expedited approval process and allows for the reallocation of floor area ratios (FAR) in designated Employment and Commercial/Residential zones. By easing regulatory constraints, ZTA 25-03 accelerates the transformation of nonperforming commercial properties into residential use, depending on the context.

In tandem, Subdivision Regulation Amendment 25-01 establishes an administrative subdivision process to ensure that any necessary lot splits for these adaptive reuse projects are handled swiftly and efficiently.

Together, these paired actions underscore the County’s commitment to converting surplus commercial space into productive residential use while streamlining the approval process to avoid delays.

Innovative Tax Incentives: Expedited Bill 2-25

Expedited Bill 2-25 introduces a novel tax incentive to encourage the conversion of high-vacancy commercial properties—whether office buildings or retail properties—into residential developments.

Under this bill, properties converting from commercial to residential use—and meeting a minimum 50% vacancy threshold at the time of application—are eligible for a Payment in Lieu of Taxes (PILOT).

Specifically, the bill would exempt 100% of the property’s real estate taxes for a period of 25 years, provided that the redevelopment includes at least 15% affordable units for households earning 60% or less of the area median income. This financial incentive is designed to offset redevelopment costs and attract investment in projects that yield both a revitalized built environment and increased affordable housing. The measure is closely coordinated with the requirements set out in ZTA 25-02 and ZTA 25-03.

Investing in the Workforce: Budgetary Actions for Housing and Homeownership

Recognizing that legislation alone cannot resolve the County’s housing challenges, the More Housing N.O.W. package also includes two targeted budgetary actions.

1. Workforce Housing Opportunity Fund

The County is being asked to establish a new Workforce Housing Opportunity Fund with an initial allocation of $4 million. This fund is intended to incentivize the construction of housing units affordable to the workforce—targeting a segment that often falls between traditional affordable housing and market-rate developments.

Developers seeking funding must incorporate at least 30% workforce units at affordability levels averaging 80% of the area median income. Building on the success of prior Housing Production and Nonprofit Production Funds, this measure aims to fill a critical gap in the County’s housing market.

2. Homeownership Assistance Program Expansion

The package calls for doubling the County’s investment in homeownership assistance from $4 million to $8 million within the Fiscal Year 2026 Housing Initiative Fund. The Homeowner Assistance Program, which offers downpayment support of up to $25,000 and specifically reserves funds for county employees through the Montgomery Employee Down Payment Assistance Loan (MEDPAL), has seen unprecedented demand.

With current funding fully committed by mid-year, an increased allocation will expand access to homeownership for more families, fostering long-term community stability and generational wealth.

Interactive Map

To assist stakeholders in understanding the potential impact of the legislation, the County Council has released an interactive map depicting the properties that would be subject to the proposed workforce housing–specific legislation.

Upcoming Public Hearings and Informational Meetings

Click here for a rundown of upcoming hearings and meetings.

For additional details regarding the More Housing NO.W. legislative package, please contact a Lerch, Early & Brewer land use attorney.

For more information, contact Steve Robins at sarobins@lerchearly.com or Kate Gauthier at kagauthier@lerchearly.com.