Affordable housing emerged as Frederick residents’ leading concern for the city’s next budget during Mayor Michael O’Connor’s annual legislative town hall this week. The discussion covered the burden of property taxes, housing options for lower-income families and proposed changes intended to encourage developers to build more affordable units.
Frederick’s fiscal 2027 budget totaled $293.7 million, with one-third of spending going to police, O’Connor said. Property taxes provide 66% of city revenue. The current rate is $0.70 for every $100 of assessed property value, a rate the mayor described as relatively stable over the years.
Property assessments take place every three years, giving officials some ability to anticipate revenue, O’Connor explained. Residents can apply for a homestead tax credit that caps annual property tax increases at 5%. Still, he acknowledged that rising property values create a burden for owners, even as they generate additional money for the city.
O’Connor said Frederick would need state permission to establish other revenue sources. He pointed to income taxes as one possibility, but said that authority rests with the county. He argued that cities should have access to the same taxing powers as counties and said significant state changes on that issue were overdue.
Sharon Stromberg, co-lead of the Frederick housing solutions task force, urged the mayor to prioritize families earning between 30% and 60% of the area’s median income. She advocated moving away from the Low-Income Housing Tax Credit, which is tied to the broader housing market and can support developments that become unaffordable over time. Its affordability range can extend to households earning 80% of area median income, which she considers insufficient to address local needs.
Stromberg said she had spoken with police officers who could not afford to live anywhere in Frederick County, and noted that teachers face similar difficulties. She also highlighted the housing needs of hospitality and restaurant workers, describing affordability as a problem affecting both professionals and people providing services the community relies on.
The city is exploring whether its own land could be used for affordable housing, O’Connor said. Removing land costs could attract developers while giving Frederick substantial influence over a project’s size and design. Separately, the city council is drafting revisions to its affordable housing code.
Under the existing code, developers constructing at least 25 homes must designate 12.5% as moderately priced dwelling units or pay a fee instead. Every developer has chosen the fee since the requirement began in 2013. The mayor’s task force recommended lowering the threshold to projects with at least 10 homes. Council members are also considering a tax exemption for developments consisting entirely of moderately priced units.
Officials have expressed support for mixed-income communities, although the proposals could allow developers either to pay instead of providing affordable homes or receive reduced taxes for exclusively moderately priced developments. O’Connor voiced confidence in the task force’s mix of industry representatives, private-sector participants and advocates, saying the goal was to produce housing units. Residents have until the end of October to submit a survey on economic and legislative concerns for the coming year.
