Montgomery Planning presents preliminary findings of Development Pipeline Analysis to Montgomery County Planning Board – Mocofeed

Findings show high interest rates, rising construction costs, regulatory delays, and local policies as major impediments to housing production in Montgomery County 

Wheaton, Md. – The Montgomery County Planning Department, part of The Maryland-National Capital Park and Planning Commission (M-NPPC), presented the preliminary findings of its Development Pipeline Analysis to the Montgomery County Planning Board, also part of The M-NCPPC, during the Board’s weekly meeting on September 18. The Development Pipeline is Montgomery Planning’s inventory of projects that have received certain Planning Board approvals but have not yet been built. The analysis begins to provide a clearer picture of the county’s residential development landscape and the barriers preventing approved housing projects from becoming reality. 

Read the Development Pipeline Analysis staff report and watch Montgomery Planning staff’s presentation to the Planning Board. 

Montgomery Planning’s Design, Placemaking and Policy Division led the analysis that examined 88 residential and mixed-use projects representing 99% of unbuilt units in the county’s development pipeline. The study combines quantitative data with qualitative insights from 47 developer survey responses and 14 in-depth interviews to uncover the multifaceted challenges facing housing production. 

“Understanding where projects are getting stuck and why is essential if we want to see more approvals turn into actual homes,” said Planning Director Jason K. Sartori. “Having insights on the barriers that the development community faces in housing delivery is a key step as work with our public- and private-sector partners to develop a variety of solutions to tackle the housing crisis through master planning, zoning, and policy decisions.” 

Key Findings  

• Initial analysis shows about half of the units in the pipeline are permit-ready. Approximately 29,500 unbuilt residential units are in the development pipeline with progress varying across planning areas. Out of the 29,500 unbuilt units, about 14,700 units are part of projects that are positioned to begin the permitting process. These numbers are still undergoing quality control by Planning staff.  

• Most peer jurisdictions in the region publicly share such development statistics and report similar volumes of housing units pending construction and delivery. A large volume of units awaiting delivery certainly signals headwinds for development projects but also highlights the overall interest in building projects in a given jurisdiction. 

• Developers reported compounding barriers to delivering housing: high interest rates, rising construction costs, county policies (such as rent stabilization), lengthy regulatory and permitting processes, and infrastructure requirements. 

• Many projects hold approvals for more units than they realistically intend to build, meaning unit counts in the pipeline often overstate what will be delivered. Preliminary Plans outline the maximum densities achievable on a site, but may never be fully realized, which is why some units are never constructed. 

Developer Questionnaire and Interviews 

To supplement the current pipeline dataset, staff gathered information directly from developers and sponsors of projects in the pipeline through a questionnaire and follow-up interviews.  

Takeaways from questionnaire 

The questionnaire received 47 responses, representing 55% of projects and 27% of unbuilt units.  

• 29 projects (68%) are actively advancing, accounting for 4,510 unbuilt units.  

• 18 projects (32%) are stalled, representing 2,151 units.  

• Only 37.5% of respondents are fully committing resources, with nearly a third allocating minimal or no resources.  

• Construction timelines vary widely: 14 projects are already underway, while 10 have uncertain start dates. Six projects expect to begin within a year, another six within one to three years, and three in more than three years—while three indicated construction will never occur.  

Takeaways from interviews 

Fourteen in-depth interviews with developers and stakeholders revealed that many projects are approved for more units than they ultimately build, due to design and site constraints that emerge post-approval. While this natural attrition is expected, the bulk of unbuilt units stems from projects that have stalled—often due to overlapping challenges that fall into three categories: 

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Market-Based Challenges 

• Interest Rates: Cited by 10 interviewees as a major barrier, with rising rates increasing capital costs and reducing property values. 

• Construction Costs: Nine interviewees noted persistent high costs, especially for concrete multi-family buildings. 

• Weak Demand and Job Growth: Four interviewees highlighted Montgomery County’s lagging job growth compared to Northern Virginia, limiting demand for new rental housing. 

Policy-Based Barriers 

• Rent Stabilization Regulation: Mentioned in 11 interviews as the most significant policy hurdle. Developers cited its effect on financing, lack of permanent exemptions for new construction, and vacancy control provisions as deterrents to investment. 

• Impact and Permit Fees: Three interviewees flagged Montgomery County’s fees as among the highest in the region, though most viewed them as manageable if better timed and coordinated. 

Project-Based Impediments 

• Approval and Permit Delays: Nine interviewees described lengthy review processes—up to 18 months for site plans—and inconsistent feedback from agencies. 

• Infrastructure Costs and Phasing: Five interviewees cited unexpected infrastructure burdens, including stormwater requirements and delayed capital projects, as reasons for stalled development. 

Policy Recommendations 

Based on its analysis, Montgomery Planning staff presented a suite of policy concepts for the county to explore aimed at accelerating housing delivery, including: 

• Streamlining regulatory processes and shortening validity periods for approvals. 

• Enhancing interagency coordination and permitting efficiency. 

• Exploring financial incentives and infrastructure support for large-scale projects. 

• Recalibrating rent stabilization policies to reduce investment barriers. 

• Improving public communication of the development pipeline to help residents, policymakers, and stakeholders understand what’s approved, what’s advancing, and what’s stalled.