Baltimore plans to award $10.75M to incentivize developers to build more affordable rental units.
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Developers are eligible for multiple awards of up to $1M per project from the city's Affordable Housing Trust Fund. According to the Baltimore City Department of Housing and Community Development, builders may use the funds for either new construction or the rehabilitation of existing dwellings.
"You can be an emerging developer, an established developer, a nonprofit, for-profit or a community land trust to apply," Mayor Brandon Scott said in a short video statement.
According to the city, it will award a minimum of $2M to community land trusts and set aside an additional $1.75M for emerging developers. The deadline to apply for the funds is March 17.
Organizations and developers must use money from the trust fund on projects providing rental units for residents earning up to 50% of the area median income. Additionally, the city must spend half of the available funds to build dwellings for residents earning 30% or less of AMI.
A family of four qualifies as earning 50% of AMI if it earns up to $58,050 annually. A family of four can bring in as much as $34,850 a year to qualify as making 30% of AMI. The maximum gross rent, in those cases, ranges from $871 a month to $1,451 a month.
Housing activists first campaigned several years ago for the city to create a fund to address the affordable housing crisis.
In 2016, 83% of Baltimore voters approved a charter amendment establishing the Affordable Housing Trust Fund. However, the charter amendment didn't include a funding mechanism.
A protracted battle between affordable housing advocates and former Mayor Catherine Pugh's administration ensued over how to pay for the trust fund.
Pugh, who supported the fund in her mayoral campaign, balked at approving a city council bill dedicating a city excise tax increase on transfers and recordation of property sales.
After the former mayor hesitated to back that bill, advocates launched a campaign to put another charter amendment to voters in 2018. That amendment would have dedicated 5 cents of every $100 of assessed city property taxes to the trust fund. Property taxes are the city government's largest revenue source.
Once activists gathered the 10,000 signatures needed to put the item on the ballot in the summer of 2018, Pugh agreed to sign off on the council bill raising excise taxes and dedicating those dollars to support the trust fund.
City budget analysts, who worried about the bill's impact on municipal finances, predicted the increased excise tax could generate as much as $13M annually for the fund. Pugh also assented to dedicating additional city dollars, between $2M and $7M annually, to support the fund through fiscal year 2023.
Since its inception, the fund has committed more than $40M to affordable housing projects in the city, according to the Housing Department.
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