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Report on the Adequate Public Facilities Ordinance
Roald Schrack 14 September 2011

The Adequate Public Facilities Ordinance (APFO) was adopted by a 4 to 1 vote of the Mayor and Council on November 1, 2005.The purpose of the ordinance was “to ensure that adequate public facilities and services are provided concurrent with new development and redevelopment.” The mechanism developed to ensure adequate school facilities was the adoption of a threshold of 110% of school capacity would trigger a moratorium on residential construction. Unfortunately the ordinance has no provision in it restricting it to growth caused by new development or redevelopment.

The City of Rockville was founded 150 years ago but only started to grow to its present size in 1950. For the next twenty years the city grew at the rate of about 2000 new residents a year. After this early growth period, it grew more slowly and by 2005, 99.9% of available land had been occupied. By this time there were about 20 thousand housing units built. An APFO is generally considered useful during the growth period of a city. There was no apparent crisis that led to the suddenly perceived need for an APFO when the city was essentially completely built.

In about 1990 there was a radical shift in the demography of the city. What had been a relatively stable population, mostly White with about 10% Black suddenly began to include Asian and Hispanic residents.

This change in demography had a marked effect on the student population both in ethnic composition and rate of growth. In addition to the natural birthrate, there is a very large turnover in population in Rockville because of the transient nature of some government associated jobs. The registered voter list shows that every year about 4000 adults come into the city and about 3000 leave. The leaving population releases about 1000 homes for resale every year. The leaving group has an average age of 52, and the entering group has an average age of 40. Although there is no data on the number of children coming and going in the registered voter lists, the entering younger age group will almost certainly boost the child production rate.

There will be a natural reduction each year in the elementary schools population as students graduating elementary school enter a middle school. The balance of new students and graduating students determines whether the elementary school population grows or diminishes.

Rockville elementary student body growth from 2006 to 2010 gives an idea how this balances out. Leaving aside the effects of the previous construction of Fallsgrove (Ritchie Park elementary), and the importation of programs into College Gardens elementary, the total student increase over this period was 315. That would include 55 expected new students from the construction of 846 housing units. Absent any increase from construction, the natural growth rate would be about 1.4% or 65 students per year while the growth from construction was 14 per year. Thus 85% of the elementary student body growth was from causes that cannot be controlled by restricting construction.

Six projects were approved before the adoption of the APFO five years ago and have not been built yet. Their construction will depend on when financing becomes available and the market for them exists. If all the projects currently approved were built, it would add a total of 93 students spread over up to 20 years or however many years it takes to construct these 6 approved (grandfathered) projects. After 20 years or whenever these projects are completed, the APFO imposed moratorium prohibits any further residential construction if student overcrowding is over 110% -- but the study body will still grow, as before, from the natural factors that the APFO cannot control.

The schools section of the APFO should be completely dropped. It has not worked and cannot work as a mechanism of student body growth control.

If the Threshold- Moratorium model cannot reduce the growth of the student population nor block the sale of used properties or construction of already approved units, why does it have so much support?

1) It has support from most people because they do not understand that the source of new students is not dependent on new housing construction. During the period 2006-2010, 85% of the student growth was natural and uncontrolled. The number of available resale units is so large that sales of new construction units will usually be a fraction of the resale market. Since there is almost no land left in the city appropriate for the construction of single family homes, future housing construction will be almost entirely in multi-family units. Since those wishing to raise families can buy single family homes on the resale market, the yield of children from apartment developments is very low. Using current student yields from apartments, about 8000 apartments would have to be built every year to match the growth in student population obtained from the resale of existing homes.

2) There is a glut of single family homes available in Rockville. The market value of the average Rockville home has dropped 27% from its peak 2006 value. Many homeowners owe more than their home is now worth. Additional new residential properties on the market would further depress existing home prices and make it more difficult for the real estate industry to market the abundance of used homes.

3) Many people now see rental properties as more appropriate during difficult economic periods. Eleven per cent of single family homes are available on the rental market, but young people during a more mobile period of their lives, see apartments are more desirable than single family homes that require more capital and commitment. If more rental apartments are built, it will further reduce the demand for existing homes. The student yield from apartment units is only about 1/10 th the yield from single family homes.

4) Financial institutions are now wary of risking loans on anything, construction included. Many banks hold mortgages that are in trouble and are holding off foreclosures that would further depress the market.

5) A campaign was carried out to cause homeowners to fear that the construction of affordable housing in their neighborhood would reduce the property values on their homes The APFO was used very effectively to deny the construction of this project called Beall’s Grant II. Fear of the construction of this project is still being used as justification for the retention of the APFO, even though the project may never be built. Although these fears may be unsupported by the facts, it is very difficult to ease these fears once developed.

6) Owners of projects that are grand fathered, and thus have the right to develop whenever they can get adequate financing within the next 20 years, find their properties are worth more because of the development rights and thus they may desire the retention of a moratorium that denies development rights to competitors.

Because of these multiple factors, the Threshold- Moratorium solution to school overcrowding has found political backing. As an advertised solution to school overcrowding, it is at best misleading and diverts attention from possible solutions.

Several factors are probably required to reduce the political support for the Threshold-Moratorium model, they are: 1) a markedly improved housing market and general economy, 2) The development of all existing grand fathered projects, 3) a non-confrontational relationship between the city and the county that removes a political advantage from those supporting moratoriums.

The county is now experiencing the same or greater growth as the city. The county also has not absorbed the concept that the student growth now experienced is not dependent on new construction and not just a brief upswing. The county also invokes a construction moratorium to stop student body growth. To save money the county has avoided building new schools by installing portable classrooms to house the new students. The county school system now has over 500 portable classrooms that house 9% of the school population. While the use of portable classrooms may not inhibit academic instruction it certainly imposes other restrictions on school operations and uses available playground space. The current course of action is not sustainable, and the time for temporizing is over.

If moratoriums can’t work what will? Up to now the school system has allocated about $250 million a year for the Capital Improvement Program (CIP) for school construction and upgrades. With current construction practices, this has not been adequate to keep up with the need. MCPS needs to focus on a more efficient and effective construction program and financial resources to provide adequate and affordable school facilities for all the students in Montgomery County. In addition, the City needs to maintain constant vigilance to assure that Rockville students consistently receive the resources in manpower and facilities they deserve. A great step in this direction was taken by the Mayor and Council on September 12 when a strategy was adopted to work cooperatively with the Montgomery County government to achieve needed school construction projects in the city. This program may achieve what the confrontational approach of the APFO cannot achieve.

MCPS has scheduled the construction of a new Elementary school at the site of the former Hungerford Elementary School. The school was closed about 30 years ago and the building is now used for a Children's Resource Center. Before the new school can be built, the Resource Center will be moved to the building formerly occupied by Broome Junior High. This move is expected to take two years. The construction of the new school will take a couple of years so it looks like the new school could open in 2016 or 2017 at the earliest. It is hoped that the construction of this school will reduce overcrowding sufficiently that the moratorium can be lifted.

But, by this time the backlog of students may be enough so that even the opening of a new school of about 750 student capacity may not reduce the overcrowding sufficiently to lift a moratorium on residential construction now imposed by the APFO. By that time financing and housing demand may be sufficiently strong that developers may be willing to invest the time and money in a court case to repeal the APFO imposed limitations on new residential construction. The APFO is probably vulnerable. Councilperson Susan Hoffman voted for the ordinance even though she voiced the opinion that the ordinance was of dubious legality. The ordinance is vulnerable because the city of Rockville has no way of providing a mitigation path for a builder. The city has no jurisdiction over the construction of schools, that is the sole province of the county.

Since the imposition of a moratorium does not the growth of the student body and a shortage of money will continue to limit the construction of new schools, it is not clear that the moratorium will ever be lifted.

No one probably wants the moratorium to last forever, the question is, how will it be lifted?

The above report was written after many months study of the Adequate Public Facilities Ordinance (APFO) by a committee of the Planning Commission. This report was submitted as one of the several minority reports. The full committee report is available on the city website. It does not discuss the ability of the APFO to actually control the growth of the student body. Since the report was written in September of 2011 it has been expanded to cover recent developments

A series of reports was written in conjunction with a study of the Rockville APFO. The reports briefly cover many technical issues and often show important data graphically that is difficult to understand when only presented in numerical form. These reports are meant to cover in detail the sources of data that were used in developing the above report. They were distributed to the members of the Planning Commission Committee, the Planning Commission, and the Mayor and Council. The reports may be obtained on the Internet at http://bit.ly/qXGtTo

School Report - Comparisons of the characteristics of nine elementary schools that serve Rockville students with tables and maps.

Portable Classrooms - shows number and distribution of portable classrooms in Montgomery County Elementary Schools

Rockville Population - Shows changes in age and ethnic group populations in different parts of the city during the past 70 years.

Births and Deaths in Rockville - Using the census age distributions, this report calculates the number of births and deaths per year in Rockville for the major ethnic groups; White, Black, Asian, and Hispanic.

Growing Old -Discusses the large number of elderly people in Rockville and political effects

Housing in Rockville - Discusses the effect of the housing bubble on the city and the ready availability and location of housing for the approximately 4000 adults entering the city each year

Student Yields - The committee asked the MCPS to provide the data on the actual number of students obtained from 16 different sets of houses to check whether the values used by the county were accurate. No statistically significant discrepancy was found from values used by MCPS

Statistics Chat - A short primer on the statistics associated with random uncorrelated events. Any set of measurements has scatter. This scatter defines and limits the precision and uncertainty associated with a measurement.

The Rockville Voter List - describes voter lists for 2009 and 2011. Discusses voter participation of various groups in the city.

Voter List Analysis - Using the register voter lists from successive elections one is able to determine the voters entering the city and the voters leaving the city in the two years between elections. This is a very rich source of data of ages and addresses of those coming and those going.

Leaving Rockville - Using the Rockville registered voter list, the housing and age of 3000registered voters entering the city per year and 2000 registered voters leaving the city per year are tracked.

Last Ten Years - tracking the effect of residential construction and student population in 10 Rockville elementary schools for the years 2000 to 2010.