On Tuesday, April 8, 2025, the Montgomery County Council approved legislation and two zoning measures to incentivize the conversion of highly vacant office buildings into housing.
Zoning Text Amendment (ZTA) 25-03 and Subdivision Regulation Amendment (SRA) 25-01 create an expedited approval process, and Bill 2-25 establishes a 20-year Payment in Lieu of Taxes (PILOT) for qualifying office to housing conversions that provide at least 17.5 percent affordable housing. The provisions of the PILOT sunset in 10 years.
According to the Council’s press release, Montgomery County, like many jurisdictions, has an excess of commercial office space with vacancies. At the end of 2024, the countywide office vacancy rate rose to 18.5 percent, double the previous year, with vacancies concentrated in older, functionally obsolete office buildings, which negatively impacts revenues and introduces blight into communities. The County press release is here.
The remaining component of the More Housing N.O.W component is ZTA 25-02, which will be taken up in June after the Council completes the FY2025-26 budget. This amendment allows duplexes, triplexes, townhouses, and apartment buildings in the R-40, R-60, R-90, and R-200 zones if along the following road types: Boulevard, Downtown Boulevard, Downtown Street, Town Center Boulevard, or Controlled Major Highway. For affordability, 15% of the units, with a minimum of 1 workforce housing unit if an application has at least 3 units, must meet the requirements for workforce housing, which is defined as at or below 120% average median income (AMI) in the County Code. For more details see this PRA News article.