The Moderately Priced Dwelling Unit (MPDU) ordinance provides homeownership housing for households with incomes at approximately 60% of the area median income. County residents and those who work in the county are given first priority.

According to Eric Larsen, the County Department of Housing and Community Affairs has a cost control pricing formula with which developers price the units. The County reviews construction and individual development costs periodically and publishes new pricing standards when necessary.

The ordinance requires the buiding of between 12.5—15 percent of affordable units in developments of 50 or more units on properties zoned 1/2 acre or smaller. Developers get a density bonus of up to 22 percent for providing the units.

A real-life example would render the following breakdown of units. "In a subdivision where you could normally build 100 units, with MPDUs you may build 122. Nineteen of those 122 would be MPDUs. The Montgomery County Housing Opportunity Commission (HOC) could buy six of the 19, and a nonprofit housing provider could buy one. Twelve units would be sold to private individuals and the developer would be able to build three extra market rate units7 Larsen says. Forty percent of the MPDUs are reserved for HOC or nonprofits to purchase. These units are normally routed to lower-income households.

MPDUs must be owner occupied for the first 10 years, according to Larsen. "They can sell during the 10-year price control period, but resale price is limited to what the person paid for the unit plus the increase in inflation from time purchased to the time sold, plus the fair market value of any improvements they make to the house. At the end of 10 years, it may be sold to the HOC or a private buyer at the market price*~ Larsen says. One-half of the excess profit is split between the county and the owner, with the owner getting the first $10,000 in excess profit.

"If one developer did it, he would be looked down on as bringing low-income people to your neighborhood," says Richard Dubin. Dubin, a Boston native who has built 7,000 rental and ownership units throughout Maryland, is one of a pioneering group developing MPDUs in Montgomery County.

Among Dubin*s MPDU developments are Grosvenor House, Grosvenor Townhouses and Fallstone. Grosvenor House, a high rise of 404 units, has 101 affordable rental units. One bedrooms for very low-income families in Grosvenor House start at $729, while a market rate one bedroom is $ 1,160-$1,550. In another development, Grosvenor Townhouses, 28 affordable townhouses, flank 259 $250,000-$300,000 townhouses. The affordable townhouses sell for $50,000. Fallstone, where $300,000 townhouses grace the landscape, includes 18 affordable units nestled in the middle of the 287 total units.

"The jurisdiction has to regulate that everybody that builds property must have a certain percentage of affordable units," Dubin says. Policemen, firemen and teachers are some of the most common purchasers of MPDUs. "Their lives are enriched by living in a better part of town near their work. It serves a purpose to have public servants near their work."

"A developer has to be creative to integrate the units into a development with the best land use possible and that fits architecturally within the surrounding community," Dubin says. If the surrounding townhouses are brick, the MPDU can*t be all siding. For instance, if the surrounding townhouses have shutters, the MPDUs must have shutters, too.

One innovative way to fit extra units into the same space is called piggyback units. Piggyback units consist of two different configurations. One configuration is three townhouses built into the space of two: the top two floors are two townhouses and the third townhouse occupies the basement and has a side entrance. The other is four townhouses that fit into the space of two. From the front there are two doors but from the back one can differentiate four different levels.

The Innovative Housing Institute is a nonprofit entity that assists local housing agencies and governments in cutting-edge methods and techniques necessary to develop and manage affordable and high quality housing products. Dubin, along with The Enterprise Foundation, has constructed a web site: www.inhousing.org. Interested developers and local government officials can download documents to begin MPDU programs in their own counties.

David Flanagan heads Elm St. Development which develops its owns sites, and provides several models of townhouses that other companies can buy to build in their own MPDU developments.

Flanagan explains that flexibility in the product type and sales price have helped Elm St. Development make MPDUs look a lot better. "If you have some flexibility you can really blend them in7 he says. Another way of achieving greater density is by building two duplexes back to back. Flanagan says, "although it contains two residences, when driving by it looks like one house," Flanagan affirmed Dubin*s sentiment that it is difficult to convince people on an individual basis to have MPDUs in their subdivisions, but if it is mandated for everyone it is not as important to them.

Because the MPDU ordinance applies to all developers in Montgomery County, no one is allowed to buy their way out of the requirement with cash, for example. Critics of an automatic buyout right express the view that such an option would decrease rather than increase the number of affordable units in the county. When asked whether developers should be responsible for social problems that might occur in a development, Flanagan says" developers are in some way responsible for setting it (a development) in the right direction, after that we can*t do anything about it."

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