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Maryland’s housing crisis is getting worse. Freddie Mac and the National Association of Realtors have reported there is a housing shortage of around 120,000 units in Maryland. This number isn’t projecting future growth or new people moving to Maryland, but rather the under supply of housing for those who already call Maryland home. This deficit causes more people to live in smaller spaces and to pay more than they can afford for a place to lay their head. It heightens the risk of eviction and homelessness. Low housing supply results in rents that far outpace regional income growth. And it ultimately makes Maryland a less desirable place to move or build a business as workers require higher compensation to pay for high housing costs.

Maryland’s affordable housing crisis is even worse. The National Low Income Housing Coalition issues an annual report on “The Gap” between demand and supply for affordable units. Maryland has 30 affordable and available rental units for every 100 extremely low income rental households. This ranks Maryland as having the 10th worst affordable housing gap in the country.

While many state lawmakers have acknowledged the high cost of housing as a crisis, few are willing to identify local government as the primary suspect. A century ago, the Standard State Zoning Enabling Act was issued by the U.S. Department of Commerce to provide model legislation for states to grant municipalities the power to dictate local land use. Since that time, housing has been presumed to be a “local matter” not subject to state control.

This made sense as counties facilitated, and even welcomed, growth. But over time, these same counties have become less interested in growth and more focused on resource hoarding. Counties not only want to create well-funded school systems with a high quality of life, but also want to ensure as few people as possible have access to these public goods.

In Baltimore County, a new affordable housing proposal in Towson was finally cleared for construction after being held up, and denied administrative approval, because of a resolution adopted by the County Council with the express intent of killing the project. The 56 new affordable units are desperately needed to satisfy the county’s obligation to create 1,200 new units over the next 11 years — an obligation it is not likely to meet.

In Howard County, a member of the Zoning Board, who also serves as a member of the County Council, presided over and voted against a zoning petition for new apartments in the Columbia village of Hickory Ridge after testifying against the petition when it was before the Howard County Planning Board. This kind of explicit bias would be decried in any courtroom, but is status quo for local land use decisions.

Adequate Public Facilities Ordinances, which are intended to signal the need for additional infrastructure to accompany housing growth, have been utilized by counties to create housing moratoriums, stalling the construction of housing in areas with already inflated housing prices. Earlier this year, a circuit court judge ruled that a police shortage in Annapolis would require a hold on all new housing in the city.

Jurisdictions like Montgomery County are projected to need over 60,000 new housing units over the next 20 years. Despite relatively liberal land use and zoning policies compared to its neighbors, Montgomery County is producing less than 2,600 new housing units per year, leaving a projected gap of 8,000 units. When large jurisdictions like Montgomery County don’t build enough housing, the consequences cascade across surrounding counties that need to make up the gap.

The necessities of the housing crisis have caused states like California and Massachusetts to revisit the sanctity of local control for the purposes of shaping statewide housing policy. Maryland may be ready to do the same. House Bill 852/Senate Bill 903 would require counties to provide expedited permit review for religious institutions building affordable housing. Lawmakers also are considering creating a task force to study a law that would require counties to allow the construction of accessory dwelling units. The Montgomery County Delegation sponsored legislation that would prohibit the Montgomery County district council from adopting or enforcing a local law that would require off-street parking for a residential development that is located within a quarter mile of a present or planned Metro or Purple Line station.

The failure to build new housing is a generational wealth transfer by inertia. As housing supply becomes more constrained, Baby Boomers, Gen X members, and older millennials become more wealthy on paper, while later generations find homeownership further out of reach. Every day of inaction makes the problem more intractable. The politics of local government make movement on the housing crisis impossible. It’s time for state lawmakers to step in.

Lawrence Talej was ready to buy his first house.

It was late 2019, and Talej, then a 26-year-old software developer, had saved up for a down payment while living with his parents in a suburb near Richmond, Virginia. After looking at a few houses in the area, he won out on a nearby home for $315,000 — right at the asking price. But before he could officially become a first-time homeowner, an inspection revealed the house needed as much as $40,000 worth of repairs. He decided to back out of the contract. Better deals would come around, he thought.

Now Talej wishes he’d bought the home after all. The surge in home prices during the COVID-19 pandemic meant that by the time he jumped back into the market during the summer of 2021, it was too late. The median price for a home in his ZIP code had risen by more than $100,000.

For first-time homebuyers like Talej, the outlook has never been bleaker. The double whammy of skyrocketing home prices and surging interest rates has pushed homeownership further out of reach, while a decade of under building has left the latest generation of hopeful owners with fewer options and stiffer competition for listings.

This unfortunate combination means first-time buyers are waiting longer to purchase homes and winning out with less frequency than ever before. Between June 2021 and June 2022, the typical first-time homebuyer was 36 years old, the highest median age since the National Association of Realtors started surveying buyers in 1981. And during that year, first-time buyers accounted for just 26% of all home purchases, the lowest percentage ever, according to the NAR.

It’s clear that the pandemic has exacerbated inequalities in the housing market, forging a greater divide between those who already own their home and those who are still searching for that opportunity. And while there may be some short-term relief on the horizon, housing advocates worry that without some sort of large-scale intervention, the long-term obstacles for first-time buyers will continue to mount.

Meanwhile, would-be buyers are stuck with the feeling that they’ve been locked out of the market entirely. Talej, who’s now 29, summed up his cohort’s position with a grim acknowledgement: “We’re royally screwed.”

The new first-time homebuyer

The profile of the typical first-time homebuyer has dramatically shifted over the past few decades — and even more so in the years since the housing-market meltdown in 2008. The most recent NAR data indicates the new face of first-time homeownership is older, richer, more likely to be unmarried, and more likely to be moving right from their parents’ home.

Perhaps the most striking shift is the age of new homebuyers. The median age of someone purchasing their first home in 1981 was 29. Over the next 30 years that figure barely creeped up, rising to just 30 in 2010. But in the past decade, the median age has ticked up even higher, reaching a record of 36 last year. And according to Jessica Lautz, the deputy chief economist and vice president of research for the NAR, there’s reason to believe first-time buyers will skew older for the foreseeable future. Higher mortgage rates are stretching budgets thin, while a dearth of housing inventory keeps prices elevated, meaning new buyers need to build up a larger nest egg before hopping into the market.

“It makes sense that they would have to save for a longer period of time, unless they have family help,” Lautz said.

Other changes in the typical first-time homebuyer also reflect the growing challenges of saving up for a down payment. In 2020, the median household income for first-time homebuyers reached $90,539 in inflation-adjusted dollars, the highest level since 2001 and well above the national median income for all households of $71,186. The median income for repeat buyers also peaked at $117,753 that year. Median incomes for both first-time buyers and repeat buyers fell in 2021, to $71,000 and $96,000. But Lautz told me that the drop didn’t necessarily mean that more homes became accessible to people with lower incomes — rather, the people who ended up being able to make their first purchase were buying in markets that were cheaper in the first place.

“We see more buyers in small towns, outer suburban areas, rural areas, and those are more affordable areas overall where a buyer can purchase on a lower income,” Lautz said.

More new buyers are also delaying traditional life milestones like getting married or moving out of their parents’ house. Unmarried couples accounted for 18% of first-time buyers between June 2021 and June 2022, the highest share recorded by the NAR, up from 4% in 1985 and 12% in 2010. And many of today’s hopeful homebuyers are trying to build up their savings by living in their childhood bedrooms longer: 27% of first-time buyers in the NAR’s most recent survey moved directly from a family member’s home into the home they purchased, the highest percentage recorded and up from 15% in 1989.

The racial makeup of first-time homebuyers also set records in 2022, but the lack of progress in Black homeownership was perhaps most shocking. Just 3% of first-time homebuyers last year were Black, the lowest percentage since the NAR began tracking the data in 2003, when about 6% of the cohort were Black. The percentage of first-time homebuyers who were white hit a two-decade high of 88% last year, up from 83% in 2003.

This gap mirrors the astonishing divide between white and Black homeownership rates, which is now larger than it was in 1960. Last year, 43.5% of Black households owned their home, compared with 74.6% of white households, according to the US Census Bureau. That gap — 31 percentage points — is 2 points higher than it was more than six decades ago.

The ‘haves’ and the ‘have nots’

Housing-market experts say the reasons for these shifts come down to one major thing: affordability. The jumps in age and income, and even the racial disparities, reflect the brutally high barriers to entry for today’s housing market. The typical down payment for a home more than doubled during the pandemic, reaching a peak of $66,000 in May 2022, according to Redfin.

“The housing market has really become a market of ‘haves’ and ‘have nots,’ and the first-time homebuyers are the ones who are losing in this environment,” Lautz told me. “They do not have housing equity, and they do not have the ability to quickly move into the housing market without that.”

Waiting longer to purchase your first home may not be entirely a bad thing. Older people tend to be more financially stable and have a clearer idea of what they want for the long term, Danielle Hale, the chief economist at Realtor.com, told me. But for better or worse, homeownership remains the most popular form of building wealth for most American households. A delayed home purchase can mean missing out on years that could have been spent amassing equity. “The ability to build that housing wealth over a lifetime really does shrink,” Lautz told me.

With more people delaying their first-home purchases, the wealth gap between people who own a home and those on the outside of ownership will only grow. Over the past decade, the average homeowner has accumulated $210,000 in equity, according to the NAR.

These trends only compound the bad economic news for millennials, who make up the majority of today’s first-time buyers. Many members of the generation have suffered a series of setbacks including the Great Recession and the pandemic in their adult lives, and they’ve accumulated more student debt and less wealth than previous generations as a result. Now the housing market is doing them no favors. In the decade after the housing crash, builders started construction on roughly 21,000 single-family homes per 1 million people each year, barely half as many as they were building in each of the three decades prior. The underbuilding, combined with the sheer size of the millennial generation, created an extreme housing crunch as many in the cohort aged into their prime homebuying years. That leaves millennials and subsequent generations in a precarious position.

“They’re scared they’re not going to be able to ever afford a home. They’re scared there won’t be homes for them by the time they get there,” said Wendy Gilch, the founder of Selling Later Search and the host of the podcast “The Real Estate Replay,” in which she shares cautionary tales from buyers and sellers. “They just feel abandoned.”

Hope is a fickle thing

There’s some slight relief on the horizon for first-time homebuyers. The recent escalation in mortgage rates is making home payments more expensive, but it also means the bidding wars that defined the pandemic-era housing boom are now much less common. Buyers who can stomach higher borrowing costs are finding they may no longer have to put in outrageous offers and waive inspections in order to have a chance of landing a home.

Many housing experts have also predicted that cooling demand could result in home-price declines this year, which could ease affordability concerns for buyers. But available homes, particularly the lower-priced starter homes that so many first-time buyers rely on, remain scarce. Homebuilders, who were ramping up construction when demand was hot during the first two years of the pandemic, are now pulling back in the face of recession fears, which will only deepen the shortage.

Policymakers are taking note of the bleak prospects for first-time homebuyers. In 2021, House Democrats introduced two bills that aim to level the playing field: the First-Time Homebuyer Act, which would offer a tax credit equal to 10% of the purchase price of a home up to $15,000, and the Downpayment Toward Equity Act, which would issue grants of up to $25,000 for first-time buyers. The latter has advanced to the full chamber, but both face an uphill climb in a Republican-controlled House.

Nonprofits around the country are working with potential homebuyers to provide down-payment assistance and financial education, but their work can only go so far without massive policy overhauls to aid first-time buyers.

“Without federal resources like that, it will always be a game of catch-up, and we will always be falling behind the times,” said Sunshine Mathon, the CEO of Piedmont Housing Alliance, one of these nonprofits, in Charlottesville, Virginia.

Ultimately, though, the struggles of first-time buyers reflect a fundamental disconnect in the US housing market. Shelter is a universal need, but homeowners also expect their investments to increase in value. The prospect of cheap and plentiful housing represents a direct threat to that wealth.

“If we’re just relying on the unrestricted markets around homeownership costs, frankly, it will be out of reach for young people and for many communities of color in perpetuity,” Mathon said.

‘The dynamic is broken’

I first spoke with Talej, the Richmond-area would-be homebuyer, in December. Three years had passed since he backed away from the $315,000 home in his area — a steal by today’s standards, even if it needed tens of thousands of dollars’ worth of repairs. He couldn’t shake the feeling that an opportunity like that wouldn’t come around again.

“The dynamic is broken for the foreseeable future,” he told me. “I don’t see it going back anytime soon.”

About a month later, we talked again, and he had an update: He had just gone under contract on a three-bedroom house for $385,000. It was pricier than the home he almost bought in 2019, and it needed another $10,000 worth of work. But it was in an area with a good school district, about five minutes from his parents’ place.

For Talej, the pending purchase is a bittersweet conclusion to his homebuying journey. Despite finally winning out on a home, he said he felt no more optimistic about the state of the housing market than he did a month ago. He attributes his success mostly to luck: The seller needed to make a deal quickly and was willing to cut down the original asking price of $419,000, at a time of year when sales are typically slower. Take away those circumstances, and Talej isn’t sure where he would have ended up.

“I have a sinking feeling,” he said, “that had I not moved on this one, it would be more of the same nonsense.”

Town of Sykesville appeals its violation of Maryland’s Open Meetings Act

The Sykesville Town Council and Mayor Stacy Link were found to have violated the Open Meetings Act — a statute that requires state and local public bodies to hold their meetings in public, to give the public adequate notice of those meetings and to allow the public to inspect meeting minutes.

The state Open Meetings Compliance Board on Oct. 31 issued a seven-page opinion that states the council, which consists of the mayor and six other members, violated the act when a quorum of the council attended Sykesville Planning Commission meetings on Feb. 7 and March 21.

At both meetings, the state determined that the Sykesville Town Council received information about a matter of public business that would be coming before the planning commission for a vote.

“Under the facts here, the receipt of information as part of a step in the process for a matter that was certain to come before the council was the consideration of public business and thus constituted ‘meetings’ of the council on February 7 and March 21,” the written opinion states. “The meeting notices, however, described only meetings of the Planning Commission

“We further find that texting among members of the Council at the March 21 meeting violated the Act’s requirements … that public bodies generally meet in open session and permit any member of the general public to attend,” according to the ruling.

The opinion also states that the compliance board did not have enough information to determine whether members of the planning commission “improperly engaged in side conversations that violated the Act by depriving the public (and other members of the commission) the opportunity to fully observe the commission’s deliberations.”

Members of the Sykesville Town Council did not return requests for comment.

“I cannot comment on the OMA Compliance Board decision because the matter is pending appeal,” Link said in an email.

The complaint dates to December 2021, when Warfield Companies, the developers of Warfield at Historic Sykesville, a mixed-use housing and commercial development on Route 32, filed a zoning text amendment with the town to construct less commercial space and instead build affordable housing, Timothy Maloney, attorney for Warfield said in an interview.

The request was referred to the planning commission, which held two meetings, one on Feb. 7 and another on March 21.

“The planning commission rejected the plan,” Maloney said.

On July 22, lawyers for Warfield Companies and the Maryland Building Industry Association filed a complaint with the Open Meetings Compliance Board. Warfield contends that there were two separate conversations that occurred simultaneously at each of the meetings, “the public dialogue,” and a “simultaneous private conversation” among members of the planning commission and members of the mayor and Town Council.

“Specifically, the complainants (Warfield Companies) allege that (one) a quorum of the Council attended the Planning Commission meetings, and while sitting in the public gallery, improperly discussed Council business, and (two), members of the Council improperly communicated with members of the Planning Commission ‘off the record’ during the Planning Commission meetings,” the compliance board states in its official opinion.

On Feb. 7, the planning commission met to consider the proposed zoning amendment. The mayor and three other council members attended the meeting. It is unclear who the three other council members were.

“The Mayor and one of the council members sat next to each other and throughout the meeting, spoke to one another,” the compliance board states. “The Complainants (Warfield Companies) allege that the Mayor, ‘certain council member,’ and certain Planning Commission members ‘were actively referring to cellphones.’ According to the Complainants, their ‘expressive body language and facial expressions suggested texting between the Council members and Planning Commission members.’”

On March 21, the planning commission met again to consider the same proposed amendment.

Five council members attended the meeting. It is unclear who the five council members were; they not mentioned by name in the official opinion from the state. There are six members on the council.

“Text messages from the time of the meeting appear to show conversations between the Mayor and two other Council members who were sitting in the public gallery,” the compliance board states. “More specifically, one text chain appears to show a conversation between the Mayor and a Council member about the possibility of having a collaborative workshop with the developer proposing the zoning amendment.”

The text messages were obtained by Warfield Companies through a Public Information Act request and turned over to the state board.

“A separate text chain appears to show a conversation between the Mayor and a different Council member expressing opinions about the quality of the proposed development,” the compliance board states.

The town council did respond in the complaint.

“The council concedes that a quorum of the council was present during the Planning Commission meetings but argues that the quorum’s presence did not convert the commission meetings into meetings of the council,” the compliance board states. “Under the act means to convene a quorum of a public body to consider or transact public business. The council argues that a quorum of the council did not consider or transact public business at the Planning Commission meetings.”

Maloney said Warfield officials witnessed the exchanges.

“We went to the planning commission meeting to make sure they knew our people were there,” he said. “They have really demonstrated hostility to the Warfield project. We’re frustrated. The mayor and the council are openly hostile to affordable housing in the project. They have made that clear.”

Maloney said Warfield is “finishing up” the construction of 145 townhomes. The cost of those homes is in the mid-$500,000 range.

“The zoning proposed is for 170 to 180 rental units in one of the historic buildings [on the property],” he said. “There will be new construction, with different price points. We’re trying to meet multiple levels of need to serve the community. They would be priced for people in the workforce, such as teachers, firefighters, police and retirees.”

There are 12 historic buildings on the site. Three of the historic buildings have been restored and are occupied by Nexion Health, Zeteo Tech and Alderson Loop, Warfield states, on its website. The remaining nine buildings will be rehabilitated and repurposed in a variety of ways as future users are identified. The buildings or portions of them will be offered for lease or purchase depending on the needs of individual users.

“The developer is free to put affordable housing, if they choose, in any of the historic buildings up to the number of residential units left within the residential density permitted by the zoning,” Link stated in an email.

Link said the mayor and council, as elected representatives, have listened to town residents and what they want.

“The citizens of Sykesville made it very clear at a [May 3] public hearing, citing multiple real-world negative implications to their families’ quality of life, safety and well-being, that additional residential development of any type, be it low-income, workforce, or market rate, particularly at the high-density levels being proposed by the Warfield developers, is not in their best interest.

“Those same citizens have elected me and six other council members to collectively represent their best interests,” Link stated. “They have spoken, and we heard them and unanimously denied the developer’s request to change zoning. The developer’s ‘not in my backyard’ narrative they continue to write on behalf of our citizens is not only offensive, but simply false. The only story here is one of a developer trying to bully a small town and its Mayor and Town Council.”

The mayor and town council have 30 days to respond to the complaint from the Open Meetings Compliance Board, the Maryland Attorney General’s website states. The response should address the issues in the complaint and any other issues raised by the board.

If the council and mayor deny to the Compliance Board that the Open Meetings Act was violated, they must explain why they did not violate the act. If they acknowledge that the act was violated, they must explain how they will change their procedures to comply with the act and provide any documentation detailing the change in practice.

If they are found in violation of the act, they are required at the next open meeting of the mayor and council to announce the violation and orally summarize the opinion. In addition, a majority of the council must sign a copy of the opinion and return it to the compliance board.

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