Assessing the Effectiveness of Montgomery County’s APFO

Section II – Page 1

Section II: Overview of the Annual Growth Policy1

Background

The Montgomery County Council adopted the Adequate Public Facilities

Ordinance (APFO) in 1973 as part of the Montgomery County Subdivision
Ordinance. The County uses the APFO to promote orderly growth by synchronizing
development with the availability of public facilities needed to support that
development. The Montgomery County Planning Board administers the Subdivision
Ordinance and the APFO. In April of 1986, the County Council enacted legislation
which established an Annual Growth Policy (AGP) for the County. Since that time,
the Council has used the AGP to direct the Planning Board’s administration of the
County’s APFO. The text of the APFO and the Annual Growth Policy legislation is
included in this document.

Purpose

The Annual Growth Policy legislation states that “the annual growth
policy...is intended to be an instrument that facilitates and coordinates the use of the
various powers of government to limit or encourage growth and development in a
manner that best enhances the general health, welfare, and safety of the residents of
the county.” County officials use the AGP to match the timing of private
development with the availability of public facilities. The timing aspect of the AGP
cannot be over-emphasized. The AGP is designed to affect the staging of
development, not the location, total amount, type, or mix of development. These
latter issues are dealt with in master plans, sector plans, and the County’s General
Plan. The AGP has two components:

• Identifying the need for public facilities to support private development; and

• Constraining the amount of private subdivision approvals to those which can

be accommodated by the existing and programmed public facilities that the
County and other levels of government can produce in a given time frame.

The relative timing of development approval and provision of public facilities

are what the APFO and the AGP are all about. The APFO mandates that the Planning
Board not approve a preliminary plan of subdivision unless it finds that the public
facilities in place or programmed in the local and state capital improvements
programs will be adequate to serve the subdivision, along with all other approved
development. The Annual Growth Policy tests the adequacy of four types of
facilities:

1
This section is primarily composed of material that is contained in the adopted Annual Growth Policy. It
is included as background information for those unfamiliar with the AGP.
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• Transportation;
• Schools;
• Water and Sewerage Facilities; and
• Police, Fire and Health Services.

Transportation Facilities

In general, preliminary plan applications must pass two different trans-

portation tests before the Planning Board can approve them. The two tests are:

• Policy Area Transportation Review (staging ceilings) for all plans generating
more than 5 trips, and
• Local Area Transportation Review (intersections) for all plans generating 50
or more trips.

There are certain types and sizes of projects that are exempt from Policy Area
Transportation Review; these are described later in this chapter. In addition,
developers may provide transportation improvements, ride-sharing programs, and
traffic mitigation programs to meet Policy and Local Area Transportation Review
requirements.

Policy Area Transportation Review

In 1982, the County began using Policy Area Transportation Review to

evaluate the adequacy of transportation facilities. This test applies in the urban and
suburban portion of the County, which is divided by the County Council into 27
“policy areas;” that is, 25 plus Rockville and Gaithersburg, which are independent
localities with their own planning and zoning authority. Policy area boundaries
generally are based on physical features such as rivers, parks, and freeways; on the
similarity of transportation characteristics; and on administrative boundaries, such as
City/County or Sector Plan area boundaries.

There are also five rural policy areas where PATR does not apply. These are
Goshen, Patuxent, Poolesville, Rock Creek, and Darnestown/Travilah.

Policy Area Transportation Review determines whether there is sufficient

transportation capacity in a policy area to accommodate more preliminary plan
approvals. The test looks at the traffic impacts of existing development as well as
approved but unbuilt new development (the development pipeline). The development
pipeline includes previous preliminary plan approvals by the Montgomery County
Planning Board; site plan, use permit, and record plat approvals by the cities of
Gaithersburg, Poolesville, and Rockville; and building permits signed off by the
Planning Department for public buildings and pre-1982 recorded lots.
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Based on this policy area transportation review, the Council each year
establishes jobs and housing staging ceilings for the 27 policy areas. The staging
ceiling is defined as the maximum amount of development, in jobs and housing units,
that can be accommodated by the existing and programmed transportation facilities
serving the policy area, given an assigned level of roadway congestion. A
programmed transportation facility is defined as those transportation projects for
which 100 percent of the expenditures for construction are scheduled to occur within
the first four years of the County or state program.

Staging ceilings are set based on a policy that permits greater traffic
congestion in areas with greater transit service and usage. Thus, in areas where there
is greater service and usage, greater traffic congestion is allowed, and in areas where
the transit service and usage is lower, less traffic congestion is allowed. Although
every policy area has a unique combination of transit and roadway service, all policy
areas must meet the same standard for overall transportation level of service, called
the “total transportation level of service,” or TTLOS.

Policy Area Transportation Review measures local road congestion on a

policy-area-by-policy-area basis and freeway congestion on a countywide basis. It
also accounts for the “upstream and downstream” effects of development on the
transportation network. In other words, it measures the impact of development in one
policy area on the traffic in all of the other policy areas.

In some policy areas, the amount of existing and approved development

exceeds the staging ceiling set by the Council. This means that the roadway conges-
tion in this policy area, once all approved development is built, will exceed the area’s
standard. In these cases, the Planning Board may not approve any new preliminary
subdivision plans, except under certain special circumstances.

Local Area Transportation Review

Since the mid 1970s, the Planning Board has used the Local Area
Transportation Review (LATR) test to determine if a proposed preliminary plan of
subdivision will cause unacceptable local traffic congestion problems at nearby
critical intersections. Local Area Transportation Review is required only for
subdivisions which generate 50 or more peak hour automobile trips.

In administering LATR, the Planning Board must not approve a subdivision if

it finds that an unacceptable peak hour level of service will result after taking into
account existing and programmed roads and transit. If a proposed subdivision causes
conditions at a nearby intersection to be worse than the standard, the applicant may
make intersection improvements or provide trip reduction measures to offset their
traffic impact to meet LATR conditions and gain preliminary plan approval. If the
subdivision will affect an intersection or roadway for which congestion is already
unacceptable, then the Planning Board may approve the subdivision only if it does not
make the situation worse.
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Intersection congestion is measured using a method called “critical lane

volume,” which is the number of vehicles making “critical,” or conflicting
movements through an intersection in an hour.

Montgomery County’s level of service standards for intersections vary by

policy area. Like PATR, the LATR standards are based on the idea that less traffic
congestion should be permitted in areas with lower transit service and usage and more
traffic congestion should be allowed in areas with greater transit service and usage.
For the rural policy areas, anything worse than 1450 CLV is unacceptable for LATR.
For policy areas with the greatest level of transit service available, such as some
Metro station policy areas, the LATR standard is 1800 CLV. Other policy areas fall
somewhere between the two standards, depending on the area’s level of transit
service and usage.

Public School Facilities

Since FY 89, the Council has tested public school capacity for the County’s
21 high school clusters to determine if there is sufficient capacity to support
additional preliminary plan approvals during that fiscal year. Each of the three grade
levels - elementary, middle, and high school is assessed separately. The Council
compares forecast enrollment in each high school cluster five years out to the
capacity that is programmed in the fourth year of the CIP.

For APFO purposes, school capacity is considered adequate for a cluster if

forecast enrollment does not exceed 100 percent of the Council funded program
capacity. If sufficient capacity is not available in the immediate cluster, the Council
looks to see if an adjacent cluster or clusters have sufficient capacity to cover the
projected deficit in school capacity for APFO purposes. If these combined clusters do
not have sufficient capacity, then schools are considered inadequate for APFO pur-
poses and the Planning Board will be unable to approve a new preliminary plan in
that cluster for the next fiscal year.

Water and Sewerage Facilities

The APFO and the AGP consider preliminary plans to be adequately served
by water and sewerage facilities if they are located in an area in which water and
sewer service is presently available, under construction, or designated by the Council
for extension of service within the first two years of a current approved
Comprehensive Water Supply and Sewerage Systems Plan. Facilities are also
considered adequate if the applicant either provides a community water and/or
sewerage system, or meets County Health Department requirements for septic and/or
well systems.
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Police, Fire and Health Facilities

The Planning Board considers police, fire, and health services to be adequate
unless agency review and public commentary indicates that a local area problem will
be generated by a new subdivision. If such evidence exists, a Local Area Review
must be undertaken to determine whether facility capacity at the end of the fifth year
of the approved CIP is sufficient to accommodate the demand generated by the “most
probable” forecast for the same year.

Approvals in Policy Areas With No Remaining Staging Ceiling Capacity

To balance the County’s growth management policies (the APFO and the
AGP) with other County policies and concerns and to protect the public interest, the
Council has authorized the Planning Board to approve subdivisions in areas where
there is no remaining staging ceiling capacity under certain special conditions. A
summary of these conditions follows.

Places of Worship

The Adequate Public Facilities Ordinance exempts places of worship and

residences for staff, parish halls, and additions to schools associated with places of
worship from all adequate public facilities tests including Policy Area Transportation
Review and Local Area Transportation Review only if they are “on a unrecorded
parcel which has not changed size or shape since June 1, 1958.”

Small Scale Development - De Minimis

The Annual Growth Policy’s de minimis rule allows the Planning Board to
approve preliminary plans that will have minor traffic impacts, even if there is
insufficient staging ceiling capacity for Policy Area Transportation Review. “De
minimis development” is defined as that which will generate 5 or fewer peak hour
trips, which means that de minimis projects are also automatically exempt from Local
Area Transportation Review. Some examples of de minimis development are 4
single-family detached housing units or 2,250 square feet of office space. Beginning
November 1, 2001, de minimis also includes any free-standing child day care center
located on the border or a policy area and the adjacent policy area has a positive
balance of jobs capacity.

Affordable Housing

The Annual Growth Policy’s special ceiling allocation for affordable housing
allows the Planning Board to approve, under certain conditions, preliminary plans for
affordable housing in a policy area with insufficient staging ceiling capacity for
Policy Area Transportation Review. These affordable housing developments,
however, must pass all other public facilities tests including Local Area
Transportation Review.
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The development must be certified by the Housing Opportunities Commission

(HOC) as having met the definition of affordable housing, and the owner of the
development must enter into an agreement with HOC to maintain the occupancy
requirements for at least 15 years. An affordable housing development is defined as a
housing development which is either owned by the Housing Opportunities
Commission or by a partnership in which HOC is the general partner; or, a
privately-owned housing development in which 20 percent of the units are occupied
by households at or below 50 percent of the area median income, adjusted for family
size, or 40 percent of the units are occupied by households at or below 60 percent of
the area median income, adjusted for family size.

For projects owned or controlled by HOC, the Planning Board may approve
up to a total of 125 units in a policy area in a fiscal year. In privately owned
affordable housing developments, the Planning Board may approve up to 300 units in
a policy area in a fiscal year. In a policy area with both HOC owned and controlled
developments and privately owned affordable housing developments, the Board may
approve a total of 300 units in a fiscal year. The special ceiling allocation for
affordable housing does not apply in policy areas that have been in a housing
moratorium for a long time and have already had a large number of units approved
under the provision.

Previously-Recorded Lots (“Loophole” Properties)

As discussed earlier, the AGP provides guidelines to implement the Adequate

Public Facilities Ordinance (APFO), which is part of the County’s subdivision
regulations. Prior to 1989, previously-recorded lots were exempt from AGP
requirements implemented after the subdivision was approved. In 1989, there was
increasing concern that these “loophole” properties (lots recorded prior to 1982 or
recorded in conformance with a preliminary plan approved prior to 1982) had been
approved under a less stringent APFO transportation test (or none at all). In response,
the Council passed Bill 25-89, which required non-residential lots approved prior to
1982 to pass Local Area Transportation Review prior to building permit, but
exempted them from Policy Area Transportation Review until July 25, 2001, if they
registered with the Planning Board before July 1, 1990. Beginning July 2001,
eligibility for this special treatment under the APFO expired, and all “loophole”
projects are now treated the same as any other subdivision under the APFO.

Alternative Review Procedures

Two alternative review procedures were implemented in FY94 to spur certain

kinds of development: the Alternative Review Procedure for Metro Station Policy
Areas and the Alternative Review Procedure for Limited Residential Development. A
third alternative review procedure, the Alternative Review Procedure for Expedited
Development Approval, popularly known as “Pay-and-Go,” was approved on
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November 1, 1997 and went into effect in February 1998. Of these three procedures,
only one remains fully in effect.

The Alternative Review Procedure for Metro Station Policy Areas is intended
to encourage development in areas where transportation infrastructure already exists
— namely, certain compact policy areas atop Metro stations. A project using this
procedure is not required to make the improvements normally required by Policy
Area Transportation Review or Local Area Transportation Review. In exchange, the
project must make a payment to the County (based on square footage), mitigate at
least 50 percent of the project’s trips (onsite or off-site) and join and support a
transportation management organization.

Intended as a stimulus to the housing construction industry, the Alternative

Review Procedure for Limited Residential Development permits up to 300 units of
housing to be approved each year in most policy areas. These projects need not meet
the requirements of either Policy Area or Local Area Transportation Review. In
exchange, the developer agrees to an accelerated construction schedule and to make a
payment (the “Development Approval Payment”) to the County. This procedure was
allowed to sunset on October 31, 2001, although subdivisions that filed a preliminary
plan or pre-preliminary plan by October 31, 2001 were grandfathered, as were certain
planned unit development projects incorporating a public golf course.

Intended as a temporary development stimulus in the wake of Montgomery

County’s slower-than-expected emergence from the 1991 recession, the Alternative
Review Procedure for Expedited Development Approval permits non-residential
subdivisions to be approved without meeting the requirements of either Policy Area
Transportation Review or Local Area Transportation Review if the developer agrees
to pay a tax, called the “Expedited Development Approval Excise Tax,” and agrees to
begin construction within two years of the recording of the plat. This procedure is
only available to projects that had submitted applications on or before May 12, 1998
and these projects have until May 1, 2003 to receive Planning Board approval.

The County Council requires the Planning Board to systematically track and
report on the traffic impacts of development approved under the “alternative review
procedures.” The Council can then set priorities for spending the revenues from the
fees and for addressing the traffic impacts of the approved projects.

Special Provisions

The Annual Growth Policy contains a number of “special provisions” which

are intended to address instances where adequate public facilities concerns may be
outweighed by economic development benefits. Generally, these provisions are
limited to allowing the expansion of existing major employers and require a payment
to the County, submission of a traffic study, and other conditions. The Special
Provision for Corporate Support Facilities addresses the specific instance where a
major County employer’s headquarters facility does not have nearby lodging facilities
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for its visitors and trainees. The Special Provision for Corporate Headquarters
Facilities is more general and assures that in limited cases, major corporations can
expand their current headquarters facility. The Special Provision for Hospitals in
R&D Village Policy Area allows the limited expansion of hospitals in that area.

The Special Provision for Strategic Economic Development Projects is a two-

year pilot provision that allows the County Executive to propose for County Council
concurrence “strategic economic development projects” which do not qualify for any
of the other AGP exemptions but which are expected to contribute significantly to the
County’s economic vitality. Once designated, Strategic Economic Development
Projects are eligible for approval upon payment of the development approval
payment. As of yet, there have been no “strategic economic development projects”
designated, but the procedure is only a few months old.

Stage Ceiling Flexibility

The Annual Growth Policy provides an option for preliminary plan

applications which would exceed the Policy Area staging ceiling. The developer can
receive preliminary plan approval if he or she agrees to fully mitigate the traffic
impacts of the project. Currently, there are three types of staging ceiling flexibility
for Policy Area Transportation Review:

• Full-cost developer participation;

• Development district participation; and
• Transferable development capacity (Metro Station Policy Areas only).

Each enable a preliminary plan to pass Policy Area Transportation Review, and also
require the plan to pass all other public facilities tests including Local Area
Transportation Review.

Full-Cost Developer Participation

Full-cost developer participation allows the Planning Board to approve a

preliminary plan in areas where there is insufficient staging ceiling capacity when the
applicant agrees to pay for the construction of a public facility project such as a road,
or to provide the full cost of a transit, paratransit, or ride-sharing program. The public
facilities project has to add as much capacity to the transportation system as the
proposed development will generate. If the developer, for a period of 12 years,
provides a traffic mitigation program, the program must reduce the number of
peak-hour, peak-direction automobile trips by as many trips as would be generated by
the proposed development.
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Development District Participation

At the initiative of one or more property owners, development districts may be

created by the County Council as a way to fund needed public facilities. These
districts have the advantage of allowing private developers to finance infrastructure
improvements over a much longer term. They also permit public-private partnerships
in building needed infrastructure.

Transferable Development Capacity

In Metro station policy areas, the holder of a non-residential subdivision

approval may apply to the Planning Board for a conversion of that approval to
residential approval. The conversion may be all or part of the original approval, and
must occur at a conversion rate of between 0.5 and 0.75 jobs per housing unit.

In the Silver Spring CBD, the development capacity associated with existing
buildings or approved but not yet constructed subdivision may be transferred to a not-
yet-approved subdivision under certain conditions. Owners of existing buildings may
sell the development capacity associated with that building up to 5 years after
demolishing the building. This option is available on the Silver Spring CBD policy
area.