The Effects of Moratoria on Residential Development: Evidence from Harford, Howard, and Montgomery Counties

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During the last decade, the state of Maryland was one of the fastest growing states in the United States. In response, the state has implemented an aggressive “smart growth” initiative. One of the most popular smart growth policies, adopted by several counties in the state of Maryland, is an Adequate Public Facility Ordinance (APFOs). An APFO is a spatially delineated land use control that aims to prevent development from occurring in areas where certain public services are overcrowded. An example of an APFO is a standard on elementary school capacity which limits the amount of new development at the school district level. Despite their extensive use, very little is known about the effects of these policies. The purpose of this report is to answer the following three questions: (1) What is the direct impact of an AFPO? That is, when a policy area is under moratoria, what is the resulting growth of new residential stock and how does that compare with policy areas that do not have moratoria? (2) What is the overall impact of the policy? In other words, does the policy reduce total new development in the county or does it simply re-direct growth from one policy area to another? (3) How much of the areas under moratorium overlap with Priority funding areas, in other words, are county land use policies in conflict with State smart growth priorities?