§ 9-6. Affordable and inclusionary housing.

(a) Definitions.

(1) In general.

In this section, the following terms have the meanings indicated.

(2) Affordable rent.

"Affordable rent" means rent that does not exceed 30% of a household's income.

(3) Area median income.

"Area median income" means the median household income, adjusted for household size, for the metropolitan region encompassing Baltimore City, as published and annually updated by the United States Department of Housing and Urban Development.

(4) Qualifying development.

"Qualifying development" means:

(i) a redevelopment project of 30 or more residential rental units that will set aside 10% or more of the development's total units to be rented at an affordable rent to a household earning not more than 60% of the area median income; or

(ii) a new residential rental development project that:

(A) is new construction or is a conversion of a nonresidential structure that will provide 30 or more units of housing;

(B) has a combined private capital investment of equity and debt of at least $10,000,000;

(C) sets aside at least 10% of the development's total units to be rented at an affordable rent to a household earning not more than 60% of the area median income; and

(D) has not obtained site plan approval on or before June 30, 2007.

(5) Site plan approval.

"Site plan approval" means approval from the Planning Commission of the land development proposal of a qualified development to ensure its consistency with land development policies and regulations and accepted land design practices.

(b) Rules and regulations.

Subject to Title 4 {"Administrative Procedure Act – Regulations"} of the City General Provisions Article, the Director of Finance, after consultation with the Housing Commissioner, must adopt rules and regulations to carry out the provisions of this section.

A redevelopment project or new residential rental development project is exempt from Baltimore City real property taxes if, in accordance with the rules and regulations adopted under this section:

(1) the owner or owners of the project have filed an application for the exemption within the time period specified by the rules and regulations adopted under this subtitle;

(2) the City determines that the project is a qualifying development meeting the requirements of this section;

(3) the City determines that the exemption is necessary to offset the owner's or owners' additional costs of providing affordable units at the qualifying development;

(4) the owner or owners of the qualifying development satisfy a financial review administered by the City that includes:

(i) a detailed description of the project and the development budget for the project, including the identification of all sources of debt and equity financing;

(ii) a multiyear pro forma cash flow analysis of the project detailing all incoming and outgoing cash flow including revenues, operating expenses, debt service, taxes, capital expenditures, and any other cash outlays;

(iii) the projected return on investment for the owner or owners;

(iv) the amount of potential revenue that may be lost through the provision of affordable housing; and

(v) any additional information specified in the rules and regulations adopted under this section; and

(5) the owner or owners of the qualifying development and the City enter into an agreement, approved by the Board of Estimates, that:

(i) provides that the owner or owners of the qualifying development must pay to the City a negotiated amount in lieu of the payment of City real property taxes;

(ii) specifies an amount that the owner or owners must pay to the City each year in lieu of the payment of City real property taxes during the term of the agreement that is not less than 75% of the annual property taxes that would otherwise be due to the City for the qualifying development in the initial year of the agreement; and

(iii) is limited to a term of not more than 10 years.

(d) Extensions of the agreement.

(1) In general.

At the completion of the term of the agreement, the qualifying development may seek, and the Board of Estimates may grant, an extension of the agreement.

(2) 10-year limit.

Each extension is limited to a term of not more than 10 years.

(e) Maximum aggregate tax reduction.

The Board of Estimates may not approve an agreement for payment of a negotiated amount in lieu of taxes under this section if the agreement would cause the total reduction in property tax revenues from all agreements entered into under this section to exceed $2,000,000 in any taxable year.

(f) State authorization.

The property tax exemption granted by this section is contingent on the enactment and continuation of State legislation that authorizes the exemption.