Montgomery County Council Members Kristin Mink (D-District 5) and Will Jawando (D-At large) have introduced legislation to levy a tax on demolitions and housing expansions to fund social housing in Montgomery County. This legislation applies when a property owner tears down an existing single-family house and replaces the house with a larger house on the same lot. Proceeds from the tax would go to Montgomery County’s Housing Production Fund.

Montgomery County has used the Housing Production Fund to build mixed income, county-owned housing (i.e. social housing) since 2021. Examples of properties developed or under development using this fund include the Laureate at Shady Grove, Hillandale Gateway and Wheaton Gateway. These properties include a mix of market-rate and subsidized, affordable housing. Revenue generated from this bill would be used to build 3,000 new homes.

The Montgomery County Council’s legislative analysts have determined that the bill would have a positive impact on climate, racial equity and economic activity. The bill would primarily impact homebuyers and developers in Bethesda, Chevy Chase and Potomac, the wealthiest parts of the county.

Use this action alert to ask your county council members to support the bill!

The Montgomery County League of Women Voters and the Montgomery County Community Action Board have supported this legislation through written testimony.

Frequently Asked Questions:

Will this bill apply to dilapidated or condemned housing?

The tax in this bill does not apply to housing if it is condemned. The bill also includes exemptions if the housing is destroyed by an “act of god,” if the housing is converted to a moderately priced dwelling unit, if the demolition is initiated for medically necessary adjustments, or if the owner agrees to live in the housing as their primary residence for five years.

Has this policy been tried elsewhere? What were the impacts?

This proposal is modelled after a similar policy that has been in effect in Evanston, IL since April 2006. The revenue collected from the demolition tax has contributed to that city’s affordable housing fund for nearly twenty years.

Will this tax stop developers from building housing?

According to the Montgomery County Office of Legislative Oversight, “[Bill 5-25] is unlikely to deter substantial private sector capital investment in this sub-sector,” referring to the ability of private developers to continue building in the County. Additionally, this tax does not apply to the construction of new housing stock.