(NewsNation) — After returning from a military deployment in East Africa last May, Salisbury, Maryland Mayor Jacob Day was determined to do something drastic to address what he called a “housing crisis.”
It had become difficult for many families who lived there to afford their rent, he said, while others who worked there chose to live elsewhere. Homelessness also remained a stubborn problem.
So Day and the city council tried something new: They gave developers 90 days to submit proposals for new projects, promising if they were completed they’d waive millions in fees.
“It’s one of those sacred cows… that I would not have considered, until we found ourselves in a crisis,” Day said, noting that developers had long asked him for waivers.
Once the 90-day window came around, Salisbury received applications to build 8,049 housing units in a city that currently has around 15,000, representing a potential 60 percent increase.
Sales data shows rising home prices in Wicomico County, MD, where Salisbury is located
The “Here is Home initiative,” which implemented the fee holiday, also included measures to build tiny homes for homeless residents. It targeted affordability by establishing a minimum payment in lieu of taxes for affordable housing, and waived property taxes for Habitat for Humanity and similar organizations.
NewsNation asked for a breakdown of housing units, including how many would be considered affordable housing. Salisbury officials have not yet provided that data.
Housing supply has plummeted since 2018, and Day says the demand has remained high. In an op-ed to the Baltimore Sun, Day reported they filled 33 tiny homes designed for the area’s homeless.
It’s an early indication of the program’s effectiveness, however city officials have not yet provided NewsNation with additional housing numbers.
The city expects the cost in waived fees of those projects, from building permits to water and sewer connections to annexation, to come in at around $40 million over five years.
But Day believes the revenue generated by the new development will eventually pay for itself.
“In three-and-a-half years we’d have paid for the $40 million in fees that we gave up, so that’s a really quick return on our money,” he said.
To make sure developers follow through, the measure requires them to pay all their fees up front and refunds them only after the projects are completed.
“So to their lenders and to their equity partners that’s money they can control, in other words, they can influence whether or not that’s an actual cost, or just something they have to put up and will get back,” Day explained. “They have to meet these strict timelines.”
Could Salisbury’s housing boom be replicated elsewhere? Day said that he doesn’t believe there’s a silver bullet to the housing crisis and that local officials must tailor their solutions to their budgetary and political capacities.
Less money from developers also means less funds available in the near term to spend on infrastructure improvements needed to support new residents.
“What I would say is for very fast-growing places that are overwhelmed by growth, they really need to have a critical look at their infrastructure, roads, fiber and sewer, fiber, etc. to determine whether or not this is appropriate,” Day said.