1. Montgomery County Affordable Housing PILOTs

2.  Why Have PILOTs? – Benefits: –They lower the on-going operating expenses of a property –Allows an owner to borrow more money from private sector sources, thereby, leveraging the County’s investment. –PILOTs are also beneficial to owners of special needs housing, or housing for residents with extremely low-income where the resident’s incomes limit their ability to pay rent. –Reduction in on-going operating expenses, such as special assessments and property taxes, is critical to the success of these facilities

3. Review Process  Handled as part of loan request review or program administrative review (ex.: MPDU program)  Reviewed & administered by DHCA  Approved & administered by Dept. of Finance

4. Review Process  Negotiated on a property by property basis  Request can be rejected  Determine eligibility of property and owner  Determine type of property and eligibility for tax abatement

5. Unusual Features of County Program  County Council and Finance Department “Get It” –Allows properties to borrow more from other sources –Part of economic development policy –Costs less to house people than provide them services –Project decision making delegated to county departments

6. Unusual Features of County Program  No separate monitoring program – PILOT compliance always tied to another program that is monitoring the property

7. Section 8 PILOTs  “Section 8” PILOTs - County has executed PILOT agreements with seven properties with project-based Section 8 contracts providing rental subsidies or reduced rents to lower income households.  These PILOTs agreements provided $542,219 in tax abatements in 2007.  In the agreements, the County agrees to reduce each property’s taxes by an amount equal to the documented losses incurred by the property’s participation in the Section 8 program (lost rent revenue, administrative costs, etc.)  Through this program, the County is preserving 382 Section 8 units. According to HOC, HUD Housing Choice Voucher subsidies average $950 per unit per month. Using this average, we estimate that the federal subsidies being received for these 382 units could exceed $4.35 million per year. Without the County assistance, the owners would not stay in the Section 8 program, and the County would lose 382 valuable housing units serving very low income families.

8. Summary Figures  $15 million in PILOTs in current year  100% PILOTs offered to elderly, CHDO, and Housing Authority properties  Mixed income, for-profit, non-profit properties also eligible

9. Contact Information  Montgomery County Department of Housing and Community Affairs Rick Nelson, Director Stephanie Killian, Multifamily Housing Specialist 100 Maryland Avenue, 4 th Floor Rockville, MD 20850 240-777-3693stephanie.killian@montgomerycountymd.gov