Growing Concern

Development is on the books, but will the houses ever get built?

By Katherine Heerbrandt | Photography by Turner Photography Studio | Posted on 08.07.15 – Feature

Think Frederick County’s growing too fast? Worried that thousands of new homes and sprawling developments will translate to clogged roads and acres of classroom portables? Think again, say some. Be prepared for the onslaught, say others.

On paper, Frederick County is poised to grow by leaps and bounds, but realistically will those homes ever be built? And if so, will there be anyone around to buy them? Changing demographics and economic shifts are the wildcard in forecasting Frederick’s crowded—or lonely—future. In the meantime, everyone needs to take a deep breath, says Eric Soter of Rogers Consulting and then take a good, long look at the facts.

Headlines lament overcrowded schools and development run amok. The phrase “rapid growth” has grown into a meme all its own. But it’s a misnomer, according to Soter, who monitors public policy and growth trends for the consulting company. Soter was the director of Frederick County’s community development division when he stepped down in December 2013. “Everyone talks about rapid growth, but nobody wants to look at the data,” Soter says. “Those times [of booming growth] are over.”

Frederick County has approved 22,028 homes for construction, but the building of many of those homes won’t come to market, according to a report Soter authored in September 2014 for the Land Use Council. Of those, 4,286 are lots that may never be developed, according to the report.

Soter’s demographic and development report, A 25 Year Look Back and Forward—Frederick County, Maryland, outlines shifts in the choices and changes facing Frederick County in the next 25 years. Soter’s takeaway? Frederick County will never again see the growth explosion it saw in the 1990s and early 2000s. In 2013, the single-family detached homes that were on every wish list once upon a time experienced a 30-year low for the sixth year in a row, with less than 500 built. By contrast, in the the peak years, between 1987 and 2005, Frederick County was building between 2,000 to 3,000 homes a year.

“Frederick is a microcosm of the state,” says Bruce Dean, former president of the Land Use Council and law partner at Linowes & Blocher LLP in Frederick. “Houses follow jobs. When government expands, a lot of people move here. Now, with government shrinking, there’s not a lot of job growth in the D.C. area.”

­The reality of the housing pipeline, Soter says, is that the prior board of county commissioners did not, contrary to popular belief, issue a high number of housing permits, and those that did get the nod will likely not get built for some time, if at all. Between 2011 and 2014, the county issued 1,751 housing construction permits, but approved more than 10,000 new units. “The number on paper that got approved might sit there for another decade or so, because of phasing schedules and road improvements that need to occur before they can move forward,” Soter says. Meanwhile, the likelihood that most of the road constructions and improvements will happen is relatively low because of a lack of funding.

Soter says that to meet the growth forecast by the state’s planning department, Frederick County needs to add even more housing units than what has already been approved. The county has 89,392 households and 94,085 dwelling units. The state estimates a growth of 36,025 households by 2040, with a need for an additional 37,775 housing units, or 1,511 annually.

In the county, New Market, Urbana, Monrovia, Ballenger Creek and Libertytown are slated for the majority of planned development, although some of those are being challenged in court, including the Monrovia Town Center.

Soter believes the county “needs to dig deeper in looking at providing what we need.” According to his data, building 1,500 homes a year for 15 years is not enough. Instead, the county needs to build 1,662 new homes for the next 25 years to accommodate population growth.

“The other big thing that is missing or misunderstood about growth in the county is where the growth is occurring,” Soter says. “If you look at the data and population projections, the market for units in Thurmont and Emmitsburg is much less compared to the market for the southern part of the county, where there is more accessibility to jobs.”

Of the developments already approved, 40 percent, or 8,700 units are in municipalities, primarily Brunswick and Frederick. “The new reality in this part of the county is a much slower, steadier pace of growth, and a different kind of growth,” says Brian Morris, development coordinator for Matan, a real estate and development firm. “A lot of projects being built have been multi-family because that is what young people can afford.”

Since 2012, a significant majority of the multi-family construction, like apartments and condominiums, has been primarily in the City of Frederick. Multi-family dwellings in the county rose from 15 in 2013 to 88 in 2014. Multi-family dwellings made up 44 percent of permitted dwellings, mostly in the city.

Of the homes in the pipeline in the county, 50 percent are single-family homes, 30 percent are townhomes and 20 percent are multi-family homes. In the county, New Market, Urbana, Monrovia, Ballenger Creek and Libertytown are slated for the majority of planned development, although some of those are being challenged in court, including the Monrovia Town Center.

Regardless of if and when they are built, the approved developments have County Executive Jan Gardner worried about paying for them and their associated infrastructure costs. In the months leading up to and the month after the election, the county approved seven rezonings, mostly from agricultural or low-density housing to a higher-density zoning.

In 2014, Gardner ran on a platform that included responsible, managed growth. In a campaign video, she said that in her travels around the county, growth was the biggest concern among residents. Fourteen major developments were approved under the previous administration, she said, that give Frederick County housing “well beyond the 20-year housing demand.” As for the future, “We’re going to see very few new major developments.”

As the senior population increases, and millennials opt for more urban living close to public transportation, the desire for single-family homes is waning, Gardner says. And as seniors downsize, larger homes will be available for resale, further reducing the need for single-family homes.

Existing homes, however, may not be as desirable. According to Soter’s report, 25 percent of the current housing stock is more than 50 years old, and by 2040, 40 percent will be more than 50 years old and more than 11,000 units will be 100 years old.

The price tag for the roads and schools to support new developments, however, is steep, and will mostly come from existing taxpayers’ pockets, Gardner says. “Clearly, we are going to have infrastructure problems because developers weren’t required to pay their way.”

Take Jefferson Tech Park, as an example. The county, under the leadership of former County Commissioner President Blaine Young, orchestrated a deal with developers to fund infrastructure for the 173-acre development southwest of Frederick that diverts property taxes from the residents of the park through 2043. The development is planned for 825 townhomes, condos and apartments on 60 acres with commercial, office and open space occupying the remainder.

The revenue, which would normally go to county coffers, Gardner says, will pay for a new interchange over U.S. 340, water/sewer, roads, storm drains, sidewalks, landscaping, street lights and more. When all is said and done, more than $70 million will have been diverted to foot the items normally paid by the developer.

Gardner wants to restore the teeth to the adequate public facilities ordinance (APFO) to time the pace of residential growth to the county’s ability to provide schools, roads and public safety. Under the prior administration, developers could pay a school mitigation fee as a way of fulfilling obligations to the APFO. But the mitigation fees and impact fees will not cover the costs of the additional schools that need to be built over the next 20 years, Gardner says, which is estimated at just under $100 million. The growth will put some schools at 200 percent capacity.

In the City of Frederick, there are a number of exciting projects on the horizon, according to Dean, the former Land Use Council president. At the 240-acre Renn Farm, east of the city, Matan plans 1,000 units of “neotraditional” housing units, with 40 to 50 acres or more devoted to parkland. “That’s the kind of smart growth city and county like,” Dean says. “It’s along Monocacy Boulevard, with infrastructure and water and sewer in place.”

In sites J/K at the end of Carroll Creek, Matan wants to build a multi-family, mixed use development, but is in the early stages of getting approvals, Morris, Matan’s development coordinator, says. “It’s about two to three years out.”

At the other end of the city off the Golden Mile is the Summers Farm. Annexed in 2009, the project had a difficult time getting going as it was hit hard by the economic downturn. Largely a single family home and townhouse project, Dean says the development of 300 homes will help jumpstart the revitalization of the Golden Mile.

But the City of Frederick is in a much different situation then the county. Given the $40 million debt it has incurred to upgrade its wastewater treatment plant, the growth is welcome. The city wants and needs new taxpayers to avoid raising taxes and fees for existing residents, says Alderman Kelly Russell, who is liaison to the city’s Planning Commission.

“The fact of the matter is that we are investing in upgrading our treatment plant to state standards. … The more water users we can bring online, the more we can distribute and lower costs to everyone,” Russell says.