The county’s Department of Housing and Community Affairs (DHCA) has provided funding for the construction of an apartment building along the Purple Line Corridor in Silver Spring.
Park Montgomery West, an affordable rental apartment building at 8856 Piney Branch Rd., will help preserve and meet the growing demand for affordable, transit-oriented housing, county officials announced.
DHCA facilitated $10.6 million in financing as well as a Payment in lieu of Taxes (PILOT) agreement with nonprofit Enterprise Community Development, Inc. (ECD) to support the construction of 76 new apartments and the renovation of 141 existing apartments. ECD recently announced plans to redevelop the Springvale Terrace senior housing community, located near the Dale Drive station on the upcoming Purple Line.
ECD’s affordable units are exempt from county real estate taxes under the PILOT agreement, according to a county press release. The financing of affordable housing at Park Montgomery West comes after County Executive Marc Elrich signed Rent Stabilization Bill 15-23, which limits rent increases to inflation plus 3 percent, with a total cap of 6 percent per year.
“Too often, when a neighborhood increases its amenities, the existing residents are forced out because of unaffordable rents,” said Elrich. “As the Purple Line station comes to the neighborhood, this project preserves, improves and expands affordable housing options. I appreciate the partnership with Enterprise and the State and look forward to continuing our efforts to build a more equitable and prosperous community for all.”
DHCA Director Scott Bruton stressed the importance of collaborations and innovative funding methods.
“Through strategic partnerships and valuable financing models like the twinning of Federal Low-Income Housing Tax Credits (LIHTC), we can accelerate the growth of affordable housing options in our County,” Bruton said. “The Park Montgomery project exemplifies our commitment to addressing housing challenges and making substantial progress toward meeting the needs of our diverse population.”
Another key element of ECD’s financing for Park Montgomery is the ability to “twin” or utilize two LIHTC programs simultaneously. The LIHTC program is typically used for either new construction or renovation of existing buildings, not both. To maximize the impact of affordable housing initiatives, the “twinning” of the LIHTC secures a 9 percent tax credit for Park Montgomery West construction, and a 4 percent tax credit for Park Montgomery renovations.
Originally built in 1971, the Park Montgomery building will undergo extensive renovations. ECD will also demolish an existing parking structure and replace it with the new five-level Park Montgomery West building atop a new parking lot. Over 30% of the units in the development have three bedrooms, including one-, two-, and three-bedroom apartments. According to Commercial Observer, all 217 apartments at Park Montgomery will serve residents earning 60 percent or less of the area median income, which for a household of four is $91,970.
The project is estimated to cost $98.8 million in total, with $34.7 million going towards construction and $64.1 million for renovations, officials said.
Rendering Courtesy of Enterprise Community Development