On January 17, Maryland REALTORS® got into the business of selling housing…to the General Assembly, that is.
The newly re-named Senate Education, Energy and the Environment Committee held a briefing for new and returning members on the state of Affordable Housing in Maryland.
REALTORS® were joined in the briefing by Claudia Wilson Randall from the Community Development Network of Maryland; Dominic Butchko of the Maryland Association of Counties; and Angelica Bailey Thupari from the Maryland Municipal League.
Maryland REALTORS® outlined the state’s current housing shortage, which we estimate to be just short of 120,000 units statewide. We also highlighted what NAR has called the “double trouble” of the housing market which emerged in 2022 through housing price increases accompanied by a doubling of mortgage interest rates. Those factors combined resulted in a typical home buyer losing around $107,000 in purchasing power last year.
Apart from the negative impact of the current housing crisis, REALTORS® also outlined several actions that state government could take to begin to close the gap. First, on the supply side, the General Assembly can pass legislation to aid the production of Accessory Dwelling Units (ADUs), facilitate the adaptive reuse of outdated commercial structures into multifamily housing, provide incentives to counties and municipalities which increase their housing density and production, and undertake a comprehensive study of housing needs throughout the state.
There are also programmatic changes that can be made. REALTORS® led the way in passing 2021’s HB 1178, which established first-time homebuyer savings accounts in the state. However, many lenders – and even REALTORS® - are unaware that these accounts exist because the state has not allocated funds to promote the first-time homebuyer savings accounts.
We have also advocated for wider acceptance of Maryland Mortgage Program loans among mortgage lenders. This can be accomplished by raising the loan fees that lenders receive up to the industry standard, as well as altering the income limits from a statewide to a regional standard.
Finally, the state can reconsider the property tax treatment of rental properties, which do not receive the same homestead tax benefits as owner-occupied properties. This results in the full amount of assessment increases being passed on to tenants in the form of higher rents. To combat this, the General Assembly could create a more limited homestead credit for rental properties or expand the current Renter’s Property Tax Credit to cover additional applicants.
On these and other issues of housing supply and affordability, Maryland REALTORS® will continue to sell solutions to our current housing crisis.