In 1973, Montgomery County became the first U.S. jurisdiction to pass a mandatory “inclusionary” zoning law requiring developers to provide below-market housing units in return for increased density. The goal of this Moderately Priced Housing Program was to keep housing costs down. Three decades later, Montgomery County is among the least affordable places to live in the Washington region. The MPHP is still going strong. But a new data-regression study by the Independent Institute of a similar program passed the same year in Palo Alto, Calif., found that such programs do the opposite of what they were intended. “Cities that adopt below-market housing mandates actually drive housing prices up by 20 percent and end up with 10 percent fewer homes,” the Independent Institute concluded. The mandates act like price controls by restricting supply and thus forcing prices up.
SinceMontgomery County’s own policies led to higher prices and fewer affordable homes, county leaders spanning several generations are partially responsible for the recent spike in foreclosures, up 2,000 percent in the third quarter, as exclusively reported by The Examiner’s Kathleen Miller. Lured by lenders hawking adjustable mortgages into buying homes they could not afford, more than a thousand Montgomery County homebuyers were trapped when their initially low interest rates were adjusted upward.
Knowing they might have purchased the same homes for 20 percent less if county officials had kept out of the real estate market is little solace for those being foreclosed. With an additional 3,003 foreclosures expected in coming months — double the number of government-mandated, below-market housing units — look for a perfect storm of sinking home values just as state income and local property taxes are set to rise again next year, thanks to Gov. Martin O’Malley and the Maryland General Assembly in Annapolis.
No wonder a steady stream of Montgomery County residents have been leaving for years. The latest available Census Bureau figures show a net migration of more than 12,000 residents moving to other counties in Maryland, with most going to nearby Frederick, Howard and Prince George’s counties. Because Montgomery’s politically correct leaders insist the county be a sanctuary jurisdiction, many new residents are net tax consumers, including an unknown number of illegal immigrants and their dependents.
These trends are especially troubling as Maryland’s wealthiest and most populous county faces its worst budget deficit ever with a shrinking tax base. Montgomery County voters have long been warned that this could happen, even to them. Now they must choose: Will they continue electing the same tired crowd of tax-and-spenders or will they adopt real — dare we say, conservative — fiscal policies before it is too late?
