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Land Use Market Analysis

As part of the Plan2040 background research phase, the Office of Planning and Zoning contracted with RKG Associates in Spring of 2018 to conduct a study of economic and demographic trends in the County, how these are projected to impact the demand for different land uses in the County, and how development policies and trends, if continued, will impact the future supply of land for various uses. 
 
The Land Use Market Analysis provides background information that will help inform policy decisions on Planned Land Use in Plan2040; however, it is only one source of information for decision makers. Studies from State and County agencies, data from government sources and private analytics firms, and public input will be used in tandem to develop the policies that will implement the citizens’ Vision for the future of the County. 
 
An overview of key findings from the resulting Land Use Market Analysis is below. 
 
 

County and Regional Demographic and Housing Trends 

  • Anne Arundel County’s location between metro areas and the presence of large economic and employment engines has contributed to strong population growth. From 1970 to 2010, the County captured the highest share of growth in the region, but the County’s growth rate since 2010 is slowing.
     
  • The County’s population is aging and diversifying. The County’s population over the age of 55 has grown as a percentage of the total population, and median age is increasing. The white population still comprises the largest  group, but has declined in recent years as a percentage of the total population. Education attainment levels in the County are high, similar to levels in the region.
     
  • The rate of increase in the County’s number of households is higher than in the region or State. At 2.63 persons per household in 2010, average household size in the County is much lower than in 1970, though household size is increasing since 2010. 
     
  • Household income in the County is among the highest in the region. Employment growth in the County since 1970 is above that of the region, outpacing the rate of population growth. Public sector employment in the County remains important, but private sector growth since 1970 has diversified the employment base.
     
  • The County has a healthy housing market with a low rate of vacancy among both owner-occupied and rental units. The predominant type of housing in the County is the single-family detached home, though development of this type of housing has slowed compared to other types of housing. 
     
  • Nearly half of all residential development in the County occurred before 1980, and the pace of this development has slowed dramatically since 2000.
     
  • For owner-occupied units, the largest share of homes is in the mid-range of the region’s values. There are rental options at various price points in the County, though there are fewer units available for $750 or less per month. Some parts of the County offer few rental options altogether.
     
  • Less than two-thirds of the County’s owner-occupied households earn the area’s median income, but about one-fifth earn less than 60% of the area’s median income. Over one-third of renter households earn below 60% of the area median income.
     
  • According to Woods & Poole projections, more than 28,000 new residential units are anticipated by 2035, most of which will be owner-occupied.
 

Development Trends (1980-2017) and Areas of Redevelopment Potential

  • The majority of land developed since 1980 is residential, with residential development peaking in the 1990s and slowing in the years since. Currently, 60% of residential development is at medium density, but the largest share of acreage of new development was devoted to low density or rural/agricultural development. High density residential, the smallest share of residential land developed, is concentrated in the northern part of the County.
     
  • Non-residential development makes up 15% of land acreage, but one-quarter of the assessed value of properties in the County. Much of the non-residential development that has taken place since 1980 has been along transportation corridors, particularly in the BWI area. 
     
  • Several areas in the County with undervalued properties offer opportunities for redevelopment, particularly where there are concentrations of apartments in moderate to poor condition and non-residential properties with higher rates of vacancy along older retail corridors. Many of these potential redevelopment areas are located in the northern parts of the County.  
 

Real Estate Market Analysis

  • Approximately 30,000 multifamily units (apartments and condominiums) exist in the County, and most are 1-2 bedrooms, in buildings of ten or more units, and located near transportation networks in the Annapolis area and the northern part of the County. There is high demand Countywide, with highest rents in the Annapolis area. South County has a limited market for multifamily units, with lower rates that may indicate condition issues with some units.
     
  • The County’s new office development in the last five years has clustered primarily around BWI. Office rental rates Countywide are above the region’s, but there are areas within the County of high vacancy, and demand overall may be slowing. 
     
  • Industrial development accounts for 38% of construction in the County since 1980, but some parts of the County are very limited in industrial space. Rents are highest in the Annapolis area, and vacancy rates Countywide are higher than regional or national averages, possibly indicating issues with the condition of some industrial properties.
      
  • Real estate professionals in the County see growth opportunities in the Town Centers and in key markets (industrial, warehouse, distribution, medical and medical office markets), and suggest there are several factors that make development in the County a challenge. There are opportunities, they suggest, to improve the regulatory process to ensure higher quality development.  
 

Land Use and Land Capacity

  • The County’s developed land area is dominated by residential land use. Low-density, single-family residential development on large lots makes up a large portion of developed residential land. 
     
  • A small percentage of land in the County is classified as either commercial, office, or industrial land use and is concentrated in the northern part of the County. Taken together, there is less commercial, office, and industrial land than there is land classified as undeveloped (22,317 acres). 
     
  • Approximately 13,736 acres of developable land remains in the County. About ¼ is in South County, where growth potential is limited by low-density zoning and policies. Nearly half of developable land is residential, and much of that is in northern parts of the County where higher density residential development is allowed. 12% of developable land is industrial, nearly all in north County. Much less land is available for commercial or mixed-use development. 
     
  • County population is projected to grow by 94,000 persons and 28,000 households by 2035 (source: Woods & Poole), with much of the growth pressure happening in the north and in the Annapolis area. Countywide employment is projected to grow by more than 46,000 jobs, largely in the same area. 
     
  • These growth projections would lead to a significant Countywide shortage of land to meet residential needs, and a more moderate shortage of land for commercial development by 2035. Demand for industrial land could be met Countywide, but there would be shortages in some regions of the County. 
     
  • Growth is expected to occur through 2035, focused more in the northern and central parts of the County and driven by employment and housing demand. The greatest potential for growth in the County is on the remaining developable land in the northern part of the County. Continued growth is expected in Town Centers, but there is limited land supply to grow.  
     
  • Strained land availability in the future will be exacerbated if low-density, suburban growth patterns are maintained.
 

Potential Policy Considerations

  • Expand resources for rehabilitation of rental and owner-occupied housing in lower income neighborhoods with declining housing values.
     
  • Diversify housing stock by developing more high-density rental units in areas near transportation corridors, with access to employment and amenities.
     
  • Promote rental housing in Opportunity Zones. 
     
  • Target redevelopment in areas with declining and underperforming properties. 
     
  • Improve the development review and approval process, including an expedited process for smaller development proposals.
     
  • Update the County Code to clarify development regulations and improve development outcomes.
     
  • Review impact fees to ensure they are adequate and proportional to development.