Attainable Housing Task Force Report_09-2026

TOWN OF EASTON

ATTAINABLE HOUSING TASK FORCE REPORT Recommendations for Affordable Housing Strategies November 12, 2025 Prepared by the Town of Easton Planning and Zoning Department

TABLE OF CONTENTS EXECUTIVE SUMMARY............................................................................................................... 2 DEFINITIONS................................................................................................................................ 6 THE HOUSING AFFORDABILITY GAP....................................................................................... 8 BACKGROUND............................................................................................................................ 9 TASK FORCE RECOMMENDATIONS FOR AFFORDABLE HOUSING STRATEGIES........... 13 A. Housing Development and Partnerships on Public Lands................................................ 13 B. Zoning and Policy Reform................................................................................................. 14 C. Community Outreach and Education............................................................................... 21 D. Invest in Staffing, Technology, and Financial Tools to Reduce Housing Costs................. 23 E. Mandate the production of integrated affordable housing units through Inclusionary Zoning....................................................................................................................................26 CONCLUSION.............................................................................................................................31 APPENDICES............................................................................................................................. 32 Appendix 1: Town of Easton Housing Background Report.................................................... 32 SECTION 1: POPULATION AND DEMOGRAPHICS......................................................40 SECTION TWO: EMPLOYMENT AND THE ECONOMY................................................ 49 SECTION THREE: HOUSING MARKET......................................................................... 55 SECTION FOUR: HOUSING AFFORDABILITY..............................................................61 SECTION 5: EXCLUSIONARY ZONING.........................................................................66 SECTION 6: KEY INSIGHTS FROM THE COMPREHENSIVE PLAN UPDATE AND HOUSING SURVEY........................................................................................................ 68

Appendix 2: Easton Residential Pipeline Table..................................................................... 70 Appendix 3: Method of Calculation for the Maximum Affordable Sales Price........................71 Appendix 4: Inclusionary Zoning Draft Ordinance, September 13, 2024...............................73 Appendix 5: IZ Staff Reports and PC Transmittal Letter........................................................88

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EXECUTIVE SUMMARY In response to an escalating housing affordability crisis, the Town Council of Easton launched a comprehensive, multi-faceted process in early 2024 to develop recommendations for a comprehensive housing strategy to provide greater assurances that residents and workers, from teachers and nurses to service workers and first responders, can afford to live and thrive in the community. The Town Council recognized the need for a coordinated, strategic approach to housing. In February of 2024, they approved a formal Scope of Work and appointed an 18-member Attainable Housing Task Force (Task Force), drawing on a diverse mix of stakeholders—including local government, nonprofit housing providers, business leaders, architects, and citizen representatives. Over the course of ten meetings throughout 2024, the Task Force developed a set of targeted policy, programmatic, and regulatory actions and incentives for Town Council consideration. The recommendations for affordable housing strategies are in this report. While there were differences of opinion on whether some recommendations should go forward, they are all being presented for the Town Council's consideration. The recommendations for Town Council consideration from the Task Force are organized around five core pillars to address the Town of Easton's affordability crisis. I.​

Housing Development and Partnership on Public Lands The highest priority recommendation focuses on immediately reducing two primary cost barriers: the expense of land acquisition and infrastructure (estimated up to $300,000 per lot). To directly reduce these key cost factors, the Task Force recommended implementing a public/private pilot project utilizing publicly-owned land for the construction of affordable housing. Several vacant or underperforming Town and County properties were identified as potential sites. The Task Force recommended soliciting proposals from experienced developers and housing organizations to prioritize innovative design, diverse housing types, and appropriate densities on the selected site, which will require the Town to address any existing zoning and infrastructure constraints.

II. ​

Zoning and Regulatory Reform This pillar contains several recommendations to modernize the zoning code and remove regulatory barriers to diverse housing supply. A.​ The Task Force recommended the Town Council consider permitting residential uses in commercial zoning districts (CG, CL, and BC) to support the redevelopment of suburban-style strip centers into compact, walkable, mixed-use nodes. This reform requires reducing prohibitive dimensional standards (e.g., lot sizes and large setbacks) that currently mandate single-use(s) commercial development. This change offers multiple benefits, including supporting local businesses, making more efficient use of existing infrastructure, and creating essential housing supply without expanding the Town's growth area.

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B.​ The Task Force concluded that increasing density can be an effective way to reduce the per-unit cost of housing by decreasing land and infrastructure expenses. Current maximum residential densities (e.g., 3.5 dwelling units per acre) impose suburban-type densities and prohibit diverse housing types; resulting in outward sprawl, higher infrastructure costs (more miles of roads, utilities), greater reliance on automobiles, and restricts the housing market to higher-priced, large-footprint homes. The Task Force recommended the Town Council consider increasing the maximum densities for the R-7A and R-10A residential zoning districts to counter these costs. C.​ The Task Force recommended the Town conduct a zoning diagnostic to enable the production of Missing Middle Housing (such as duplexes and townhomes)—housing types compatible in scale with single-family homes but offering greater density and affordability. A diagnostic using a townhome example demonstrated that current zoning rules (minimum lot sizes up to 10,000 sq. ft. and low density caps for example) make this housing form physically and economically infeasible. Reforming these dimensional standards is essential to integrate this diverse and affordable housing supply into existing neighborhoods. D.​ The Task Force found that requiring Missing Middle Housing to undergo the costly and discretionary PUD (Planned Unit Development) process makes efficient small-scale housing infeasible. To ensure predictable neighborhood compatibility and encourage infill development, the Task Force recommended the Town Council explore adopting Form-Based Codes or a hybrid approach. This would replace the discretionary PUD review with transparent, design-certainty standard previously vetted through the community. By integrating design and compatibility criteria up front through a rigorous public process, compliant Missing Middle Housing could then be approved "by-right," reducing developer risk, time, and ultimately, housing costs. E.​ The Task Force recommended expanding the use of Accessory Dwelling Units (ADUs) and introducing Junior ADUs (JADUs) to increase affordable infill housing, support aging-in-place, and provide caregiving opportunities. To simplify production, the Task Force recommended: ●​ Standardizing ADU Size: Limiting detached ADUs to 800 sq. ft. and attached units to 50% of the primary dwelling size. ●​ Permitting JADUs: Allowing a smaller, 500 sq. ft. unit within an existing home's footprint with shared bathroom options and no additional parking requirement, subject to owner-occupancy. F.​ The Task Force recommended explicitly permitting Work-Live units—structures that are primarily commercial or light industrial space with an accessory residential component within the structure for the owner or employee. These units differ from "Live-Work" units by not requiring an occupancy separation. This housing type supports artists, entrepreneurs, and service providers by offering convenience and cost savings, and the Task Force recommended permitting them in commercial, mixed-use, or light industrial zones where the associated building code requirements (e.g., fire suppression and accessibility) can be properly accommodated.

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G.​ The Task Force recommended tying any future annexation requests to targeted affordable housing goals as a condition of approval. Acknowledging the updated Comprehensive Plan's potential restricted stance on annexation, this strategy is intended as a policy leverage tool to govern any necessary future growth, not to implicitly endorse it. The goal is to ensure that any property receiving the benefit of Town services contributes to housing diversity by requiring a variety of housing types and affordable units. This conditional approach captures a public benefit from new development while ensuring more efficient use of extended infrastructure. III. ​

Community Outreach and Education The Task Force found that the current lack of affordable housing options can result in economic and social costs on Easton, including labor shortages for essential businesses, economic segregation, and community homogenization. Addressing a lack of more affordable housing in the community can be hampered by community resistance, which can be rooted in misinformation about who qualifies for affordable housing and its impact on property values. To address this barrier and promote transparency, the Task Force recommended the Town consider prioritizing public education and engagement. This initiative includes creating a dedicated housing webpage, hosting frequent Town Hall or neighborhood meetings, and launching a media campaign to provide accurate, fact-based information and highlight the diverse residents—from essential workers and seniors to young professionals—who need this housing. The campaign could be coordinated with a private partner, such as the Mid-Shore Board of Realtors (MSBR).

IV.​

Investment in Staffing, Technology and Financial Tools to Reduce Housing Costs A.​ The Task Force recommended modernizing Easton’s permitting system with cloud-based software to streamline approvals, improve transparency, and reduce time and costs for housing developers. This modernization is viewed as a foundational operational investment that promotes overall efficiency, fiscally responsible governance, and reduces the regulatory risk that can drive up housing prices. B.​ The Task Force recognized that meaningful policy implementation requires capacity. They recommended the Town Council may want to consider creating a Housing Coordinator position within Easton’s Planning and Zoning Department, viewing this role as an investment to support affordable housing maintenance and production. This position would administer and monitor housing programs and initiatives, provide professional staffing to the Affordable Housing Board, and actively seek new grant funding opportunities to fill the "affordability gap." Furthermore, the Task Force recommended the County partner with Easton to provide staffing and/or funding for this role to mitigate cost burdens and maximize regional impact. C.​ On the financing side, the Task Force recommended the Town Council may want to explore financial incentives that further affordable housing in Easton, such as a Payment in Lieu of Taxes (PILOT) program and an exemption or reduction of impacts fees for affordable housing projects

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or units to improve project viability and close the Affordable Housing Gap, especially for developments leveraging Low-Income Housing Tax Credits. Some members of the Task Force expressed concern about these types of incentives. Some Task Force members expressed concern over these incentives due to the revenue loss and public subsidy they represent. It was noted during Task Force discussions that deferring, reducing or waiving taxes and fees for new private sector, market-rate housing that provides affordable units reduces revenue to the Town of Easton and represents a public subsidy to the development of the affordable units while still requiring expanded services. It could also require increasing the tax rate on existing homes to balance the budget. More targeted financial incentives that are limited to certain underperforming locations, such as older industrial or vacant sites where the full revenue potential of the site is not being realized, or applied to only affordable units (as opposed to market rate units within the development) may be a more beneficial approach. In any event, should these types of incentives be considered, the Town should treat them as a calculated public investment and not a giveaway: if considering one or more of these types of incentives, the Town must require an independent economic feasibility analysis for a project to verify that the subsidy is the minimum financial assistance necessary to make the project viable, and only provide funding after the long-term community benefits and economic returns have been fully quantified. V.​

Mandate the Production of Integrated Affordable Housing Units through Inclusionary Zoning Inclusionary Zoning (IZ) was the Task Force’s most controversial recommendation in terms of the number of dissenters, though still included by the majority as a critical land-use tool in the toolbox to create affordable housing and promote economic integration without relying solely on direct public subsidies. IZ mandates that new residential developments set aside a percentage of units for affordable housing (up to 100% AMI for ownership, up to 60% AMI for rental). Acknowledging concerns that IZ could slow growth, increase overall housing costs, and be unwieldy to administer, a Town draft ordinance was reviewed and edited separately by a Council-appointed workgroup, the Task Force, and the Planning Commission. The draft includes developer incentives designed to mitigate financial risk and maximize feasibility. These offsets include an automatic 20% density bonus, up to a 20% administrative variance from dimensional requirements (lot size, setbacks), and an in-lieu fee option for small projects. After a 22-month review process, the Planning Commission forwarded a favorable recommendation of the IZ Ordinance to the Town Council.

Attached to the recommendations is a housing background report prepared by the Department of Planning and Zoning (Appendix 1). The report provides an analysis of the Town’s housing landscape, demographic shifts, economic trends, and affordability challenges. The report also expands on the demographic, market, and workforce overview briefly provided to the Task Force at their May 23, 2024 meeting.

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DEFINITIONS Affordable Housing: For the purpose of this report, housing types—both owner and rental—that are financially accessible to those households making 100% or less of the Area Median Income, adjusted for household size, and spend no more than 30% (for rental) or 35% (for owner-occupied) of their income on housing costs. The term is not to be confused with standard federally recognized housing income limits for housing programs specifically targeting 80% or less of the Area Median Income (broken down further into low income, very low income, and extremely low income). The term in this report is used interchangeably with the term Attainable Housing. Affordable Monthly Housing Expense: Housing cost that does not exceed one-twelfth of 35% of 100% of the Easton Area Median Income, adjusted for household size to include Principal and Interest, Taxes, and Property Insurance (PITI); Private Mortgage Insurance (PMI); and Homeowner Association (HOA) dues. Area Median Income (AMI): An annual estimate calculated and annually published by HUD for a specific jurisdiction (Talbot County) and is based on a standard family of four. The basis for HUD’s AMI is data from the American Community Survey for Talbot County. AMI serves as the basis for determining income eligibility and affordability limits for federal and state-sponsored housing assistance programs such as the HOME program and the Low Income Housing Tax Credit program. The current year AMI is adjusted by the Easton Affordable Housing Board to reflect the municipality's specific median income when calculating affordable housing costs. Also known as the Median Family Income (MFI) and often confused with Median Household Income (see definition below). Housing Affordability Gap: The gap between the Maximum Affordable Sales Price for a household earning up to an Area Median Income threshold and the market sales price of a home, by the number of bedrooms. The Housing Affordability Gap can also be calculated for rental units based on a maximum affordable rental price of a unit by the number of bedrooms. Inclusionary Zoning: A dwelling unit required by local ordinance to be affordable to households as specified in the Ordinance and subject to recorded affordability restrictions. Maximum Affordable Sales Price: The maximum amount of a mortgage loan that could be obtained based on the affordable monthly housing expense, interest rate, and a fully amortized 30-year fixed rate mortgage with a 5% down payment. Median Household Income (MHI): A broad statistical measure representing the middle income level for all households within a defined area, where exactly half of the households earn more than that income and half earn less. A household can consist of any number of people, including single individuals or non-family groups. It is a general economic indicator used to compare the overall income levels of a population and is often confused with Area Median Income (see definition above).

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Residential Pipeline: An inventory of approved or under construction residential projects as tracked by Easton’s Department of Planning and Zoning. The purpose of the table is to give officials and the public a clear estimate of future development and an understanding of the housing types currently entering the market; helpful for informed decision-making regarding infrastructure planning and affordable housing strategies.

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THE HOUSING AFFORDABILITY GAP Mr. and Ms. Smith are married with one child. Mr. Smith is an Emergency Medical Technician making approximately $43,500 per year. Ms. Smith is a nursing assistant making approximately $36,500 per year at an assisted living facility. Their annual combined gross income is $80,095 (80% of Easton’s AMI)—the maximum level designated as "Low Income" by the U.S. Department of Housing and Urban Development (HUD). The Smiths are looking to buy a two-bedroom home in Easton. Assuming that the family spends no more than 35% of their gross income for housing expenses (PITI, HOA fees, and PMI), their affordable monthly housing expense is $2,336. After accounting for estimated fixed non-principal and interest costs—HOA fee ($200), insurance ($200), property taxes ($459), and PMI ($250)—the remaining budget available for mortgage principal and interest is $1,227. Assuming a 5% down payment for a 30-year mortgage loan at 6.19% interest, the maximum affordable sales price they can manage is $254,000. However, the median home price of $335,000 for a two-bedroom home in Easton exceeds their maximum affordable sales price. The housing affordability gap is $81,000. This gap widens further for a family making 80% of Easton’s AMI and seeking a three-bedroom home. The median home price for a three-bedroom home in Easton is $423,000, an even larger housing affordability gap of $169,000. Even for a family making 100% of Easton’s AMI, or approximately $100,000, housing remains out of reach. A family with an annual combined gross income at that amount can afford a three-bedroom home of $304,000, a gap of $119,000. A review of Easton’s existing residential pipeline shows that no new for-sale single-family homes approved or currently under construction in the Town are affordably priced for households making 100% or less of Easton’s AMI (see Appendix Two for the pipeline table and Appendix Three for the methodology of determining the maximum affordable sales price). Hard costs for infrastructure (on-site and off-site) and construction, land acquisition, soft costs (entitlement, legal, architectural, engineering), carrying costs, and change orders all factor into the sale of the home at a price point that is competitive in the local market while still providing a profit for the developer. When the sum of these costs exceeds what a household making approximately $100,000 or less can afford to pay without being cost-burdened, this is what is referred to as the Housing Affordability Gap. Zoning restrictions and a lack of developable land also significantly contribute to artificially increasing the cost of the home. Restrictive zoning codes, by mandating low densities and large minimum lot sizes for example, can create artificial land scarcity, driving up the land acquisition cost per unit. Furthermore, the reliance on unpredictable, discretionary review processes (such as the PUD Special Exception) for any departure from restrictive standards, and opaque or vague development standards, adds significant regulatory risk and soft costs to the developer's ledger. These extra expenses—from project delays, increased consultant fees, and higher carrying costs—are passed directly to the buyer, magnifying the affordability gap even further.

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If the Affordable Housing Gap is to be closed, there are three options, all not mutually exclusive. One option is the private developer would need to cover the gap of the affordable unit and sell the unit at a loss. The second option is to find potential revenue sources or subsidies to fill or offset the gap. The third option is to find ways through land use policies and regulations to create or incentivize more housing affordability. Without these types of strategic interventions - such as those recommended for consideration by the Task Force - essential workers including teachers, police officers, healthcare workers, and municipal employees will continue to be priced out of the community they serve.

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BACKGROUND At a joint workshop held on January 16, 2024, the Town Council and Planning Commission discussed proposed zoning code amendments, several of which related to missing middle housing. At the conclusion of the discussion, the Council agreed to staff’s suggestion to develop a Scope of Work (SOW) for the development of a comprehensive strategy that furthers affordable housing in Easton. In February 2024, the Town Council formally approved the SOW, which mandated the establishment of an eighteen (18)-member Attainable Housing Task Force. This Task Force was specifically charged with providing prioritized recommendations on implementing policies, regulations, and incentives to ensure ownership and rental housing is attainable to a wide spectrum of the local workforce. Task Force members included: 1.​ David Montgomery (Easton Town Council) 2.​ Frank Gunsallus (Easton Town Council) 3.​ Lynn Mielke (Talbot County Council) 4.​ Michael Ports (Easton Planning Commission) 5.​ Tom Klein (Easton Planning Commission) 6.​ John Horner (Easton Utilities) 7.​ Jim Bent (Easton Affordable Housing Board) 8.​ Holly Dekarske (Easton Economic Development Corporation) 9.​ Don Bibb (Talbot County Housing Authority) 10.​ Susie Hayward (Mid-Shore Board of Realtors) 11.​ Julie Lowe (Talbot Interfaith Shelter) 12.​ Lauren Dianish (Atelier 11 Architects) 13.​ Michael Forster (Mulberry Station HOA) 14.​ Ryan Groll (Eat Sprout) 15.​ Paul Weber (At-Large) 16.​ Corey Pack (At-Large) 17.​ Ramon Gras (At-Large) 18.​ Troy Sherwood (At-Large) Co-Chaired by Mr. Michael Ports and Mr. Paul Weber, the Task Force met a total of ten times throughout 2024 to systematically review the housing landscape and develop its final proposals. The meeting dates along with the topic and agenda for each meeting are listed below.

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Table 1: Attainable Housing Task Force 2024 Meeting Schedule, Topics & Agendas Meeting

Topic

Agenda

Meeting One:

Task Force Kick-Off

Introductions and Purpose of the Task Force Presentations: Overview of the Affordable Housing Board and current housing programs; current Town policies; state legislation; the draft Inclusionary Zoning Ordinance; County recommendations from the 2015 Affordable/Workforce Housing Commission

May 19

Discussion: Individual perspectives and concerns Public Comment Meeting Two:

Understanding the Challenges

May 23

Presentation: Demographic, workforce, and market overview results of the American Strategies survey Discussion: Zoning and Missing Middle Housing Public Comment

Meeting Three:

Balancing the Need Versus Housing Market Realities

June 6

Panel: Chesapeake Neighbors; Talbot Interfaith Shelter; Reed Oak Properties; McAllister, DeTar, Showalter, and Walker LLC Discussion: Attainable Housing Incentives and Inclusionary Zoning Follow-Up Public Comment

Meeting Four:

Impact of Housing on Business Development and Retention

June 27

Panel: Talbot County Economic Development & Tourism; Easton Economic Development Corporation; Talbot County Chamber of Commerce; Mid-Shore Regional Council Discussion: Growth Areas Public Comment

Meeting Five:

Attainable Housing Best Practices

July 11

Presentation: Salisbury Housing and Community Development; Queen Anne’s Community Services; Anne Arundel County Discussion: Talbot County Public Schools Public Comment

Meeting Six: July 25

Draft Recommendations

Presentation: Framework for a Comprehensive Housing Strategy - David Rosen, David Paul Rosen & Associates (DRA) Break-Out Session Report-Outs

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Meeting Seven:

Draft Recommendations

Break-out session Proposed objectives and strategies

August 8 Meeting Eight:

Draft Recommendations

August 29 Meeting Nine:

Staff Presentation: Inclusionary Zoning and the DRA Management Memo Proposed objectives and strategies

Draft Recommendations

Final Proposal: Housing Strategy Formulation

Draft Recommendations

Final Proposal: Housing Strategy Formulation and Prioritization

September 12 Meeting Ten: October 10

The Task Force then met on August 7, 2025 to review the initial draft for further direction to staff for discussion and editing. As previously stated, the Task Force's work focused heavily on developing a framework for policy, programmatic, and regulatory actions. This process was driven by an initial analysis of workforce and housing market intelligence, with data presented at the May 23rd meeting and subsequently elaborated upon in this report (including the gap analysis comparing median sales prices to calculated affordable sales prices and the review of cost-burdened households). While the Task Force successfully completed its core mission of developing prioritized recommendations, two specific tasks outlined in the original Scope of Work were not completed due to budgetary and logistical constraints: ●​ Public Sector Employee Survey: A survey designed to gauge the specific housing needs of public sector workers (e.g., municipal employees, police, fire) was not administered. ●​ Construction Cost Gap Analysis: A detailed analysis comparing prototypical housing construction costs against affordable sales and rental prices was not performed. Despite these limitations, the issue of public outreach—including the creation of a public-facing website on affordable housing—was explicitly addressed and incorporated into the Task Force's final recommendations, acknowledging its critical role in securing community support for the strategy.

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TASK FORCE RECOMMENDATIONS FOR AFFORDABLE HOUSING STRATEGIES The Task Force's recommendations are strategically grouped into five pillars, ensuring a multi-faceted approach to increasing the supply and financial viability of affordable housing in Easton.

A. Housing Development and Partnerships on Public Lands 1.​ Implement a public/private pilot project that includes the contribution of publicly-owned land through ground lease for the construction of affordable housing units. Panelist “experts” invited to present before the Task Force noted that a major reason for the affordability gap is the expenses associated with constructing new housing, including the cost of land, construction materials, infrastructure, and the soft costs associated with the entitlement process for land development approval. For example, the cost of extending infrastructure in Easton is approximately $125,000 per $10,000 square foot lot, excluding additional costs associated with landscaping and amenities. For subdivisions such as Cookes Hope, the costs were even higher; between $200,000 and $300,000 per lot. The panel also noted the large increases in building material costs since the recent pandemic and more stringent building code requirements. Added together with the costs of land acquisition and the soft costs associated with the land development entitlement process, the construction of a home can be $200 per square foot or greater in Easton; it is not economically feasible to build market-rate affordable housing without interventions taken to close the affordability gap. One way to close the housing affordability gap is to reduce and/or eliminate the significant costs associated with land purchase and infrastructure. From this objective the Task Force recommended implementing a public/private pilot project that would use publicly-owned lands for the construction of affordable housing units. The land and public facilities should be appropriate for joint venture development and can even include partnerships between market rate and affordable housing developers. Taking into consideration the proximity to schools, jobs, shopping, services, and recreation, several properties were identified by the Task Force that could have the potential for a pilot project. The properties included: ●​ Talbot County Public Schools. This vacant land, accessed from Magnolia Drive, is owned by Talbot County and is approximately six and one-half acres in size. The property is also adjacent to John Ford Park. ●​ John Ford Park. The park is adjacent to Rails to Trails and owned by the town. The far northern portion of the park was originally part of the build out of the Chapel Farms subdivision. ●​ Former site of the Talbot County Health Department. The approximately one-acre property is also owned by Talbot County and is the size of one whole city block. The property and building is vacant due to the relocation of the department to a medical building on Dutchmans Lane.

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●​ Easton Volunteer Fire Department. A large portion of the property, owned by the town, next to and across from the volunteer fire department building, is vacant and could potentially be used for housing. The Task Force recommended partnering with an experienced and market rate developer and/or qualified housing organization to design and build the pilot site by soliciting proposals that would prioritize innovative design and diverse housing types at appropriate densities. Whichever site is selected, Easton would need to address any zoning, environmental and other constraints, and on-site and off-site infrastructure costs that may create barriers to implementation of the site design.

B. Zoning and Policy Reform Zoning is one of the community's police powers; all the legal regulations delegated by states to local governments to enact laws and regulations that govern everyday life and to protect the health, safety, and welfare of their residents. With zoning, the use of private property is regulated for the benefit of the broader community and its goals. Zoning can also inadvertently shape the types of housing available; impacting affordability and community diversity. Modern zoning regulations have grown increasingly complex and restrictive. Ironically, many of the beloved historic districts and vibrant downtowns that residents and visitors cherish could not be built under today's standards. Today's zoning districts often facilitate suburban patterns of development, including: ●​ Single-use zoning that strictly separates residential areas from commercial, office, and industrial zones; ●​ Low-density development, often achieved by requiring large lot sizes for single-family detached homes; ●​ Large setbacks that push buildings further from the street, creating overly-sized, curvilinear streets surrounded by vast parking lots (especially for commercial areas); and ●​ Homogeneity in housing types, limiting variety within neighborhoods. Zoning codes also frequently inhibit mixed-use environments, which combine different uses in one area or even one building, such as apartments above retail shops, or a mix of housing types. Limiting housing supply by mandating low densities, requiring large lot sizes, and excluding other housing types can significantly drive up housing costs and perpetuate housing segregation. Reforming these types of zoning rules is essential to allow for more diverse and affordable housing options. It was noted by panelists that development can be a risky business. Developers not only study the demand for housing, but also look at the yield; they seek land that is profitable and affordable. Therefore, developers are adverse to risk, unpredictability and opaqueness as they have limited time and capital. The

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soft costs of land development during the entitlement phase can oftentimes range between $100,000 and $300,000 even before development fees are applied and public hearings are held to solicit input on what is proposed and how it’s perceived. Review times that are lengthy and expensive where the outcome is unpredictable can make housing developers invest that same amount of time and capital in a different location. While Easton's floating PUD Overlay zoning district offers design flexibility with density, dimensional standards, and land uses that are not achievable in base residential zoning districts, its approval process is discretionary. This requires legislative approval from the Town Council through the code's most rigorous process, allowing existing homeowners to successfully lobby for caps on development densities and prohibitions on certain housing types. Outcomes that produce lower-density housing can come at a cost when it relates to affordable housing. This situation is further exacerbated in Maryland by additional hurdles for properties annexed into local municipalities. A five-year hold on zoning changes is often imposed when a municipality’s proposed zoning significantly deviates from a county’s regulations, unless the county explicitly waives this hold. This effectively grants counties and their constituents a level of control and veto power over the land use and density of annexed land, even if the proposed zoning aligns with a municipality’s comprehensive plan. These limitations in current zoning, coupled with unique local and state-mandated hurdles, highlight a need for reform. To achieve the objective of fostering mixed-income, mixed-use, and truly town-centric patterns of development in Easton, a proactive approach to modernizing Easton’s zoning code is imperative. Such reforms promise a multitude of benefits, extending beyond mere housing supply to impact the very fabric of the community. At the same time, it’s understood that any reform must be strategically applied to respect established neighborhood character, ensure adequate investment in supporting infrastructure (like water, sewer, and roads), and incorporate effective environmental protection measures; legitimate concerns that should be addressed through capacity management and design standards. 1.​ Permit Residential in Commercial Zoning Districts to Support the Redevelopment of strip centers to mixed-use centers. The Task Force recommended permitting residential zoning in commercial zoning districts to support the redevelopment of strip centers to mixed-use nodes or neighborhoods. The redevelopment of existing strip and campus-style shopping centers into compact mixed-use and walkable centers has many benefits including: a) supporting local businesses, b) creating vibrant commercial districts, c) providing better access to amenities, d) making more efficient use of infrastructure, and e) providing additional housing units without expanding into the growth area. However, Easton’s Commercial General (CG), Commercial Light (CL), and Business Commercial zoning districts prohibit any housing type with the exception of Live Work units in the CG and CL zoning districts. In addition, the dimensional standards for these commercial zoning districts would need to be revised to create a more town-centric feel and to allow for a more efficient use of land. Minimum lot sizes would need to be reduced as well as minimum setbacks to 15

bring buildings closer to the street edge and property lines. Restrictive maximum lot coverages would also need to change. One way to reform zoning standards is to develop a "form-based code" for commercial areas that have the potential for redevelopment. Form-based codes are a type of land development regulation that prioritizes the physical form and character of buildings and public spaces over the rigid separation of land uses. It's a fundamental shift from conventional, or "Euclidean," zoning, which primarily focuses on what activities (residential, commercial, industrial) are allowed in specific zones. The goal is to create predictable physical results, or a certain aesthetic and feel for a street or neighborhood, rather than just predictable land uses. Unlike conventional zoning, which is often dense text, form-based codes heavily rely on diagrams, illustrations, and photos. This makes them much easier for developers, residents, and planners to understand what is expected and what the desired outcome looks like. 2.​ Increase the zoning density maximums for residential zoning districts.

Increasing density is the primary mechanism for reducing the per-unit costs associated with land, entitlements, and supporting infrastructure. The Task Force recommended increasing the maximum densities for the R-7A and R-10A residential zoning districts. The current maximum density for both districts is 3.5 dwelling units per acre for single-family detached dwellings. In the R-10A zoning district, the maximum density for multi-family is 5 dwelling units per acre. In the R-7A zoning district, it’s 8 dwelling units per acre. To achieve 3.5 dwelling units per acre, each single-family detached home effectively requires a lot size of roughly a third of an acre per house; requiring a significant amount of land for each dwelling. When every house needs nearly a third of an acre, development spreads outward rapidly, consuming more undeveloped land and pushing these newly developed areas further from the center of town. The housing spread and the low-density zoning also typically limit development to single-family detached homes, preventing any natural mix of housing types such as duplexes and townhomes that could otherwise emerge. These housing types can be more affordable than large single-family detached homes because they use less land per unit and can be more cost-effective to build. By excluding them, the market is restricted to the demand for primarily higher-priced, larger-footprint homes. By mandating large lot sizes, the supply of developable land within Easton's boundaries that can accommodate new housing is artificially constrained. Even if there's physically enough land, zoning makes it illegal to use that land more efficiently for housing. When demand for housing exists, but the supply of suitable land (under current zoning) is limited, prices naturally increase as there is an increased land cost per unit. A low-density project can also have higher per-unit costs compared to more compact forms that share infrastructure. In addition, existing commercial/retail areas are located even further from new development and walking or biking becomes impractical for daily errands, leading to a greater reliance on private automobiles and higher trip generation from the development. There are also higher infrastructure costs as sprawling

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development requires more miles of roads, water pipes, sewer lines, and utility connections per household. These infrastructure costs are passed on to homebuyers, making housing more expensive. 3.​ Conduct a zoning diagnostic to assess whether base zoning district and overlay requirements support Missing Middle Housing types. “Missing Middle Housing" refers to a range of housing types that are compatible in scale, form, and construction with single-family homes, but include multiple housing units. They can be ideal for infill development as these types fall between traditional single-family detached houses and large, mid-to-high-rise apartment buildings. However, many zoning regulations in communities have made it difficult or illegal to build Missing Middle Housing as single-family detached homes became the dominant housing type after World War II. Missing Middle Housing provides more units per acre than single-family homes, but are typically low- to mid-rise (2-5 stories) smaller footprint structures that can utilize light-frame wood construction. They can blend well into existing neighborhoods without appearing as dense as large apartment buildings as well as serve as a transition to existing or planned higher density areas. The varied housing types can increase and diversify the supply of housing and potentially lower costs for a wider range of incomes. Missing Middle Housing can provide more affordability for homebuyers than single-family detached homes as the cost of land is divided among multiple units and they typically include smaller unit sizes. These varied housing types can also accommodate specific demographics and lifestyle preferences, such as downsizing seniors, single-person households, or those seeking less maintenance than a large detached home. The width, depth, and height of missing middle structures are typically no larger than a single-family detached home; allowing them to be designed in such a way that they seamlessly integrate into existing and new neighborhoods, maintaining a residential feel while gently increasing density. Even on a residential block, Missing Middle Housing can be mixed in with single family homes in such a way that people do not perceive their density. There are many examples in Easton of Missing Middle Housing that are so well-integrated into the rhythm and fabric of existing neighborhoods that many people walking along the block don’t realize that they’ve passed a missing middle type such as a duplex or mansion apartment. Easton’s Zoning Diagnostic: The Townhome Example One barrier to Missing Middle Housing is that the development standards in conventional zoning districts make small-scale missing middle housing physically or economically infeasible due to limitations on densities, excessive setbacks, allowable lot coverages, and large lot size requirements. The Task Force recommended Easton conduct a zoning diagnostic to assess whether base zoning district and overlay requirements fully support missing middle housing. Take townhomes for example, which are defined in Easton’s zoning ordinance as a residential housing type that is a small-to-medium-sized structure with two or more multi-story units with shared walls on 17

both sides (other than for the end units). In Easton’s residential zoning districts (R-7A and R-10A), no more than three units may be constructed with the same front setback and no more than six units may be constructed in one building at first floor level. In the Central Business (CB) zoning district, no more than nine units may be constructed in one building at first floor level. Regarding density limitations, the R-7A zoning district permits 8 dwelling units per acre, the R-10A zoning district permits 5 dwelling units per acre, and the CB zoning district permits 12 dwelling units per acre. Figure 1: Alley-Loaded Townhouse Zoning Diagnostic

Figure 1 above shows nine lots with nine alley-loaded townhomes on a block with one hundred and seventy-eight feet of street frontage - about half of a city block. Each lot contains a townhome with a building width of eighteen feet; an ideal minimum width. The minimum lot depth is eighty-five feet, which can accommodate an alley-loaded two-car garage that is setback a distance of seventeen feet from the townhouse. In this scenario, the area of each interior lot is 1,530 sq. ft. in size. The area of each end lot is 2,210 sq. ft. in size. The minimum lot sizes are far below those required in the R-7A (7,500 sq. ft.), R-10A (10,000 sq. ft.), and the CB (5,000 sq. ft.) zoning districts. In addition, the gross density on a per acre basis is 25.91 units per acre; also far exceeding the maximum densities of the three zoning districts. The setbacks for the three zoning districts would also need to be revised, along with the utility easement setbacks, to accommodate the above site layout. Figure 1 shows where the front, rear, and side yard Building Restriction Lines (setbacks) for the R-7A, R-10A, and CB districts would need to be substantially revised to accommodate the townhome layout.

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4.​ Establish clear,

upfront Form-Based Code standards that regulate design and dimensional criteria, enabling compliant Missing Middle Housing to be approved "by-right" and ensuring predictable neighborhood compatibility.

Easton’s zoning ordinance permits townhomes as a Special Exception in the R-7A, R-10A, and CB zoning districts. However, the dimensional and density requirements are far too restrictive and make it impossible to build without applying for a PUD to receive flexibility in density, design, and layout as the current zoning regulations prevent the construction of these efficient, alley-loaded, and potentially affordable townhomes; specifically the minimum lot sizes, maximum density limits, and minimum setbacks. The minimum building envelope requirements (the area of the lot that does not include the required setbacks) for all three districts, and the maximum rear yard lot coverage requirements for the R-7A and R-10A zoning districts, are also in conflict. The PUD land use application costs between $5,000 to $8,000 per proposal and undergoes the most restrictive, unpredictable, and discretionary legislative review process. A proposal to construct even two or three townhomes with the layout as depicted in Figure 1 would require a PUD. The Task Force also recommended amending the zoning ordinance development standards for Missing Middle Housing types to ensure reasonable neighborhood compatibility through site design, dimensional criteria, pedestrian-oriented features, and architectural standards. Conventional zoning districts like Easton’s R-7A and R-10A have minimum lot sizes and lot frontages as opposed to maximum sizes. This means that the districts fail to regulate a building size and form in proportion to its lot size and more importantly in proportion to the character of the existing block or surrounding neighborhood. Zoning density limitations in and of themselves also do not regulate building form. In addition, lot aggregation or large lot creation can allow for larger buildings and abrupt changes in form and scale to the buildings around them. To achieve the dual goals of fostering desired infill housing and ensuring community confidence, a proactive approach is necessary. Form-based codes, or a hybrid between conventional and form-based zoning, envisions intentional outcomes based on patterns of design built on existing or desired physical form and character of a community, area, or neighborhood. Developing form-based standards for zoning districts for Missing Middle Housing is one way to address any incompatibility between these housing types and single-family detached homes by regulating building form, massing, and transitions. Relying on the discretionary PUD process can add significant cost and risk for smaller-scale projects, preventing the delivery of affordable housing. A well-crafted Form-Based Code serves as a transparent roadmap that sets a clear, community-vetted set of expectations up front, incorporating all design and compatibility concerns during the code-writing process. Provided a rigorous, public process is completed during this process, any subsequent development that strictly adheres to the established Form-Based Code standards can be approved “by-right” protecting community interest through design certainty while drastically improving housing feasibility and supply.

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5.​ Amend the Accessory Dwelling Unit requirements in the zoning ordinance to encourage more affordable housing units, aging-in-place, and caregiving. An Accessory Dwelling Unit (ADU) as defined in Easton zoning code is a second dwelling unit either within, or added to, an existing single-family detached dwelling or in a separate accessory structure on the same lot as the principal dwelling. An ADU is a complete, independent living facility with provisions for cooking, eating, sanitation, and sleeping. An ADU is permitted in the R-7A, R-10A, and CB zoning districts by Special Exception. The Task Force recommended permitting a second Junior ADU unit on a property within single-family detached homes located in the R-7A and R-10A zoning districts. A Junior ADU would be no larger than 500 sq. ft. and located within the existing footprint of a home or attached garage with a separate entrance. No additional parking would be required for the Junior ADU. There would also be a reduced impact fee payment and an occupancy limit. A Junior ADU must have a sink, counter, and smaller appliances, but the bathroom could be shared within the main home; the owner must reside in the home. The Task Force did suggest working with Easton’s Building Inspection Division on building code requirements and to assess whether it would be cost prohibitive for the homeowner based on those requirements. The Task Force also recommended limiting the maximum size of a detached ADU to 800 sq. ft. and an attached ADU to 50% of the primary dwelling. Lastly, the Task Force recommended permitting ADUs in non-residential spaces. 6.​ Permit work-live unit types (as opposed to live-work units) to allow occupants to live in the same space as their place of employment. A work-live unit is primarily a commercial, office, or light industrial space that includes an accessory residential component for the business owner or an employee. A live-work unit requires a physical separation in the form of a fire wall (or floor/ceiling) between the commercial occupancy and the residential occupancy above. However, in a work-live unit, an occupancy separation is not required and the use is primarily non-residential with accessory residential space. The work activity within the unit is more substantial and can often involve public interaction, client visits, or light manufacturing/production, although certain types of hazardous commercial activities can be prohibited. The work space typically occupies a larger percentage of the unit's total area, oftentimes exceeding 50 percent. Because of this set-up, work-live units can provide another type of alternative housing that can support artists, retail entrepreneurs, service providers, and creative types. The living component of the work-live unit provides convenience and cost savings for the business owner/operator. It’s important to note that there are code implications as these units are often treated primarily as commercial for building code purposes, which can lead to stricter requirements for accessibility, fire suppression, parking, and public restrooms. For that reason, they are also typically permitted in commercial, mixed-use, or light industrial zones.

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7.​ Develop land use policies in the comprehensive plan that provide greater assurances that future development in the growth area provides a share of diverse and affordable housing. The Task Force recommended tying annexation policies to targeted affordable housing goals. Acknowledging the Town’s Comprehensive Plan’s anticipated position that new annexations should only be considered under extraordinary circumstances, the Task Force’s recommendation is intended to govern the use of annexation as a policy leverage tool should any such request be deemed necessary and approved in the future. This strategy can ensure that if any properties receive the benefit of municipal annexation, they also contribute to the Town’s core goals. Specifically, the Task Force recommended that any property requesting annexation for residential development should, as a condition of approval, include a variety of housing types and be tied to targeted affordable housing goals. Requiring a greater variety of housing types (townhomes, duplexes, smaller-lot single-family homes, potentially even small multi-family units) on annexed land directly counters the homogeneous, low-density suburban patterns seen in more recent years. This ensures that a portion of the value from new development is captured to serve the public good of providing more affordable housing. New development can then provide options for essential workers, young professionals, and seniors who are currently priced out. This conditional approach of requiring diverse housing types and potentially higher densities is fiscally responsible, as the Town can make more efficient use of extended infrastructure, reducing the per-unit cost of service delivery compared to more sprawling, low-density development. Annexation is a significant request from landowners or developers seeking municipal services and more favorable zoning. Tying affordable housing goals to this process gives Easton considerable negotiating power to ensure that any future growth aligns with broader community objectives, without implicitly endorsing additional annexations to solve the housing crisis.

C. Community Outreach and Education 1.​ Establish a Strategic Framework for Community Education and Engagement to Overcome Barriers to Affordable Housing. The cumulative effect of a lack of more affordable housing options comes with negative consequences: ●​ Displacement as lower-earning households are forced to move out of Easton and Talbot County altogether ●​ Economic segregation with wealthier residents living in separate neighborhoods while more affordable units are concentrated in specific areas ●​ Rising costs of housing by artificially constraining supply and preventing the creation of more affordable housing options

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●​ Negative impacts on businesses and the local economy as the displacement of lower-income workers and the inability of essential workers to live in Easton leads to labor shortages and the difficulty to attract and retain businesses ●​ Homogenization from the influx of higher-income residents and the loss of local businesses and cultural offerings that cater to a diverse population. However, negative perceptions persist on the term “affordable housing” and are a significant barrier to addressing affordable housing shortages. Existing homeowners often oppose affordable housing developments in their neighborhoods as they believe it will lower property values, increase crime rates, or create change in a neighborhood's character. In fact, numerous studies have confirmed that affordable housing has little to no effect on property values. In addition, affordable housing for families can actually reduce crime by providing more economic stability. There is also a misunderstanding about who qualifies and lives in affordable housing. Many residents believe affordable housing is occupied by the poorest of the poor when in fact such housing is constructed for households that are employed in a broad spectrum of households and occupations, including seniors and retirees, young professionals and essential workers such as teachers, nurses, police officers, and volunteer firefighters. The Task Force believes it’s important to provide accurate, verifiable information on a complex public policy matter such as affordable housing, increase transparency, and ensure that all stakeholders in the community operate from the same set of facts. The Task Force recommended a housing landing page accessed on Easton’s website for people to find housing information and resources and to post Affordable Housing Board and other housing-related meetings and documents. The Task Force also recommended Town Hall or neighborhood meetings to get input and reaction from a diverse public (those who live here, those who work here, those who want to move here but cannot afford to) on housing related projects and initiatives. Lastly, the Task Force recommended Easton conduct a media campaign that provides a human face to those affected by the lack of affordable housing options in Easton: those households earning up to 100 percent of AMI for home ownership, up to 60% of AMI for rental, and up to 30 percent for the most vulnerable of our population. Such a campaign could be coordinated with a private organization, such as the Mid-Shore Board of Realtors (MSBR), following public education and outreach previously conducted by the MSBR on missing middle housing.

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D. Invest in Staffing, Technology, and Financial Tools to Reduce Housing Costs. 1.​ Explore a Payment in Lieu of Taxes (PILOT) program and fee abatements for affordable housing projects. The Task Force recommended the Town Council may want to explore a PILOT program or similar tax abatement program, as well as impact fee exemptions or reductions, as ways to encourage private investment in affordable housing production. A PILOT program is a financial agreement between a developer (which can include a tax-exempt entity such as a housing organization) and a local government where the property owner makes negotiated payments over a specific period of time instead of paying real property taxes. It’s, in essence, a property tax abatement agreement. Payments can also be gradually increased over time. A PILOT program can incentivize projects with a public benefit, like affordable housing, especially for projects financed in part from the Low-Income Housing Tax Credit Program. Applications to the State of Maryland from affordable housing developers can be highly competitive, and applications score higher when there is a demonstrated financial partnership with the locality. The lower tax burden helps bridge the financial gap of providing below-market-rate units. For the developer, the lower tax payments reduce the operating costs of a project, especially in its early years, and can make a project more viable and more attractive to investors. The Task Force acknowledges that this initial public investment may be perceived as shifting the burden of services to existing taxpayers. It was noted during Task Force discussions that deferring or waiving fees for new private sector, market-rate housing that provides affordable units reduces revenue to the Town of Easton and represents a public subsidy to the development or the affordable units while still requiring expanded services. This public subsidy is a calculated, temporary trade-off that addresses the issue of how the conventional market cannot support the cost of building below-market-rate units on its own. It could also require increasing the tax rate on existing homes to balance the budget. While the fee or tax reduction represents a short-term loss, it enables the creation of a new property which will generate local economic activity and, upon the expiration of the PILOT or abatement period, will begin contributing its full tax share to the Town, thereby recovering the initial investment. A more targeted financial incentive approach that is limited to certain locations, such as underperforming older industrial or vacant sites where the full revenue potential of the site is not being realized, may be a more beneficial approach. In any event, if considering one or more of these types of incentives, the Town must treat them as a calculated public investment and not a giveaway by establishing rigorous fiscal controls. Such deferrals, reductions or waivers should only be considered if quantitatively demonstrated by industry standard economic feasibility analysis that such subsidies are required. This requires a structured process when analyzing requests for tax abatements or fee waivers by:

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a) quantifying the subsidy to ensure the Town only provides the minimum financial assistance necessary and avoids over-subsidizing private gain, b) estimating lost revenue where the Town calculates the direct financial impact of the incentive, and c) projecting the quantifiable public benefits or Return on Investment such as the estimated increase in housing affordability, workforce retention, and other community-wide economic benefits resulting from the addition of affordable units. This structured process ensures that the Town treats financial incentives as a calculated public investment where the quantifiable public benefits justify the use of taxpayer resources. 2.​ Determine the appropriate level of staffing and resources to ensure affordable housing efforts are managed, reviewed, and enforced efficiently and effectively. The Task Force recommended the Town Council consider creating an administrative structure to create a Housing Coordinator position within the Department of Planning and Zoning to include professional staffing to the Affordable Housing Board; develop, manage, and monitor affordable housing initiatives and programs; and seek new sources of revenue funding to fill the “housing affordability gap”. The Task Force recognizes the need to be judicious with municipal expenditures. The Housing Coordinator is considered an essential investment required to achieve success in affordable housing production. The role can be critical for: ●​ Project Facilitation: Acting as a dedicated point-person on affordable housing projects to help developers navigate the complex regulatory process, reducing project risk and delays ●​ Funding Acquisition: Actively applying for competitive state and federal grants and seeking new revenue sources that the Town cannot currently access due to a lack of dedicated staff ●​ Policy Implementation: Translating the Task Force's recommendations into functioning municipal programs and initiatives ●​ Affordable Housing Board Effectiveness: Ensuring the Affordable Housing Board has the professional support necessary to properly execute its mission In addition, the opportunities for increasing the supply of affordable housing in the County, outside of Eastons’ municipal boundaries, are little to none. The Task Force recommended the County partner with Easton to provide staffing and/or funding for affordable housing program administration. This partnership would not only reduce the cost burden on Easton but also maximize the impact of the Coordinator role across the County. 3.​ Modernize the development review process to lower costs for housing entitlements. The Task Force recommended Easton invest in modernized, cloud-based permit application and workflow software to: a) streamline approvals across departments, b) enhance customer experience, c) digitize permit application, d) allow customers to pay online, e) provide citizen transparency on permit activity, f)

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increase staff efficiency in communication, and g) eliminate redundancies in internal workflows. The Task Force also recommended Easton develop a user-friendly public portal to educate applicants about permit information and submission requirements. The Task Force's recommendation offers substantial benefits that directly contribute to lowering housing development costs. For developers, time is a critical cost factor where delays and unpredictability can lead to additional expenses through increased carrying costs on land, increased consultant fees, and lost opportunities for quicker revenue generation. Construction materials and labor costs can also increase during long delays. By streamlining approvals across departments and eliminating redundancies in internal workflows, this modernized system can result in reduced project timelines and administrative burdens. Furthermore, digitizing permit applications, enabling online payments, and developing a public portal will minimize errors, reduce the need for resubmissions, and provide clarity from the outset. Crucially, the modernization of the permitting system improves efficiency and reduces regulatory risk by establishing transparency and predictability. This is achieved by creating a standardized, auditable workflow that provides real-time status tracking, allowing developers to accurately forecast project timelines, budget for carrying costs, and mitigate the risk of late-stage, unexpected regulatory demands. Beyond the benefits to developers, this investment would enhance the efficiency and effectiveness of town staff—a benefit that applies to every permit, inspection, and service provided by the Town, independent of the project type. A unified, cloud-based system will increase staff efficiency in communication by providing a central hub for all project information. This improved internal coordination will streamline approvals, allowing departments to collaborate seamlessly and process applications more quickly. Staff can also dedicate more time to substantive reviews rather than administrative tasks. Moreover, enhancing the customer experience and providing citizen transparency on permit activity can reduce the volume of inquiries; freeing up staff time. Crucially, this system enhances municipal governance by reducing regulatory risk: it enforces standardized workflows and checklists across all departments, creating a transparent, time-stamped audit trail for every decision. This standardization also makes the Town’s land-use decisions legally defensible, reducing liability and ensuring consistent application of the code. Ultimately, these efficiencies can lead to more financially viable housing projects, allowing developers to pass on savings in the form of more affordable housing prices. Crucially, this modernized system provides complete transparency through communication logs and real-time status tracking, clearly identifying where applications are delayed, why, and who is responsible—whether it be from reviewing departments or, as is sometimes the case, the developer's own consultants' response times. By reducing the regulatory timeline and operational costs for all development, this investment represents a proactive measure to ensure Easton is a fiscally responsible and desirable place for investment.

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E. Mandate the production of integrated affordable housing units through Inclusionary Zoning. The Task Force recommended Easton adopt an inclusionary zoning ordinance to address the shortage of owner and renter housing affordable to families earning less than the area median income. Background § 3-114 of the Annotated Code of Maryland requires a housing element in comprehensive plans that addresses the need for affordable housing within a local jurisdiction, including for workforce and low-income housing. The law further states that local jurisdictions have a duty to affirmatively further fair housing through their housing and other programs and that the housing element of a comprehensive plan enacted or amended on or after January 1, 2023 include an assessment of fair housing to ensure that the local jurisdiction is furthering fair housing1. In addition to any other zoning and planning powers granted by the State of Maryland, § 7-401 of the Annotated Code of Maryland expressly gives a local legislative body the authority to enact local laws that: 1) impose inclusionary zoning, and award density bonuses, to create affordable housing units; and 2) restrict the use, cost, and resale of housing that is created under this authority to ensure that the purposes of affordable housing are carried out. Thus inclusionary zoning is one land use regulatory tool that can be used to further fair and affordable housing policies in local jurisdictions. Inclusionary zoning refers to zoning ordinance requirements that new residential development must include a percentage of its units to be built to accommodate affordably priced dwelling units, either for rental or home ownership. The control period, or time in which the units must remain available to households below a certain income level, typically varies from 20-99 years depending on ownership versus rental unit type2. Broadly speaking, inclusionary zoning programs seek to achieve several goals. For example, it ensures increased production of more affordable housing, especially during times of reduced funds available from federal and state housing agencies and intense competition for discretionary housing funds for local governments to purchase land for affordable housing that they cannot afford. Although the cost of 1

“Affirmatively further fair housing” means to take meaningful actions, in addition to actions aimed at combating discrimination, to overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to housing and opportunity based on protected characteristics. It also includes to take meaningful actions that, taken together: (i) address significant disparities in housing needs and access to opportunity; (ii) replace segregated living patterns with truly integrated and balanced living patterns; (iii) transform racially and ethnically concentrated areas of poverty into areas of opportunity; and (iv) foster and maintain compliance with civil rights and fair housing laws. 2 Maryland Department of Planning, Common Practices and Examples: https://planning.maryland.gov/Pages/OurWork/housing-element-mg/common-practices.aspx

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building a two or three-bedroom single-family detached home has not been accurately quantified in this report, estimated costs the task force heard from the development community is within a range of $280,000 to $350,000. The cost of building a home is expensive due to labor, materials, financing, permitting and impact fees, and utility connection fees. However, land can be the highest cost factor in building a home. In fact, Habitat for Humanity has indicated they can no longer build homes in Easton due to the high cost of land. Inclusionary zoning ensures new growth will include affordable housing, especially when there is a scarcity of land left for development in Easton and future growth areas are limited due to the town’s growth boundary per its comprehensive plan. Inclusionary zoning also facilitates economic and social integration instead of concentrating lower income households in certain areas. Working and middle-income families have opportunities to live in new neighborhoods with high-quality amenities. Inclusionary zoning regulations also typically include provisions to ensure that units built under the program are indistinguishable from market rate units. Several Maryland jurisdictions have passed inclusionary zoning ordinances, including the counties of Anne Arundel, Montgomery and Queen Anne’s, and the cities of Annapolis, Frederick and Baltimore. Process The drafting, review, and refinement of the draft Inclusionary Zoning Ordinance was a 22-month process3. The legislation was drafted for Council consideration after an extensive review of existing ordinances in the Maryland jurisdictions of Annapolis, Queen Anne’s County, and Montgomery County as well as in Loudoun County, Virginia and East Palo Alto, California4. Staff also consulted with Maryland Affordable Housing Coalition, the Virginia Housing Alliance, and the National Low Income Housing Coalition during the drafting of the ordinance. The Chair of the Easton Affordable Housing Board reviewed the draft ordinance prior to Council distribution. The draft was discussed at three Town Council workshops in 20235. Subsequent to the July workshop, the Council agreed to staff coordination of a Housing Work Group to review the draft Inclusionary Zoning Ordinance discussed at the three Council work sessions last year.

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The original draft was actually considered by the PC in April of 2007. That draft was supported by the Affordable Housing Board. The PC subsequently forwarded the draft to the Council. No final action was taken. 4 Loudoun County was chosen for its location outside of Maryland and its similarity to Fairfax County, Virginia’s and Montgomery County, Maryland’s inclusionary housing ordinances. East Palo Alto, California was chosen because of its unique approach to the provisions and management of their program; an example of a response to California’s Housing Element Law, enacted in 1969, that required that all local governments adequately plan to meet the housing needs of everyone in the community; and as a response to exclusionary zoning and severe shortages of affordable housing combined with a reduction of federal housing subsidies. Over 170 California jurisdictions have inclusionary housing ordinances on the books. 5

The workshops were held on February 6, February 20, and July 17.

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The work group included Council Members Maureen Curry and Rev. Elmer Davis, Mayor Megan Cook, Town Manager Don Richardson, Town Attorney Sharon VanEmburgh, Miguel Salinas and Lynn Thomas from Planning and Zoning, Holly Dekarske from the Easton Economic Development Corporation, and Jim Bent from the Affordable Housing Board. The Housing Work Group met five times and their work resulted in changes to the initial draft. The updated draft (2nd draft) was then distributed to the Planning Commission (PC) for review at their February 15, 2024 meeting. At that meeting, the Commission agreed to begin more detailed discussion on the work group’s draft of the Inclusionary Zoning Ordinance at a future meeting or meetings. At their March 21, 2024 meeting, the PC scheduled workshops for April 17, 2024 and May 23, 2024 for the purpose of reviewing and discussing the components of the draft ordinance and in anticipation of a formal recommendation to the Town Council prior to the introduction of new legislation. At the May 23rd meeting, the PC decided to wait for input from the Council-appointed Attainable Housing Task Force before making a formal recommendation to the Council. Three of the Task Force’s meetings included discussion of the draft Inclusionary Zoning ordinance. In June of 2024, Easton contracted with David Rosen and Associates (DRA) to review the most recent version of the draft ordinance and to offer suggested revisions and a recommended set of best practices for the provisions of an inclusionary zoning ordinance. Staff became familiar with DRA during the research undertaken to draft the inclusionary zoning ordinance; the firm provides consulting assistance to East Palo Alto, California’s inclusionary zoning program which the current draft is partly modeled from. DRA is an international policy, finance and development advisory firm that has served public and private sector clients in more than 350 governmental jurisdictions to help solve some of the most challenging finance and policy problems in affordable housing, urban revitalization, sustainable development and renewable energy. They have assisted more than 60 jurisdictions in the adoption and amendment of inclusionary zoning programs and served as expert witnesses to defend cities and counties against legal challenges to these kinds of ordinances. In addition, DRA crafted the foundational approach to comprehensive affordable housing strategies used by the federal Department of Housing and Urban Development and state and local agencies throughout the country. Lastly, DRA originated the concept of Housing Trust Funds and has assisted more than 50 cities and states in the development and funding of such funds. After discussion of DRA’s recommendations, staff revised the second draft of the draft ordinance at the request of the Task Force. At their meeting in October, as a means to accelerate the supply of affordable housing without expending public subsidies, the Task Force supported the newly-created third draft of the Inclusionary Zoning Ordinance as one of their top priority recommendations. On November 21, 2024, the Planning Commission voted 4-1 (Klein opposed) to forward a favorable recommendation to the Town Council (Council) of a draft Inclusionary Zoning Ordinance. The draft ordinance would require developers to set-aside a certain percentage of residential dwelling units as affordable housing for households earning up to 100 percent of the AMI for ownership housing and for households earning up to 60 percent of the AMI for rental housing.

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Table 12: Inclusionary Zoning Process Timetable Meeting

Date

Activity

Town Council

February 6, 2023

Workshop - Initial draft presented

Town Council

February 20, 2023

Workshop

Town Council

July 17, 2023

Workshop

Easton Housing Work Group

August 31, 2023

Review and revisions of first draft

Easton Housing Work Group

November 8, 2023

Review and revisions of first draft

Planning Commission

February 15, 2024

Workshop - 2nd draft presented

Planning Commission

March 21, 2024

Workshop

Planning Commission

April 17, 2024

Workshop

Attainable Housing Task Force

May 9, 2024

Draft legislation overview

Planning Commission

May 23, 2024

Workshop Placed on hold pending Task Force input

Attainable Housing Task Force

August 29, 2024

Review of draft legislation and DRA Memorandum

Attainable Housing Task Force

September 12, 2024

Review and revisions to second draft

Attainable Housing Task Force

October 10, 2024

Housing strategy prioritization

Planning Commission

November 21, 2024

3rd Draft and favorable recommendation to Council

The draft ordinance includes several provisions to offset developer costs. Developers may receive up to a twenty percent density bonus above the maximum allowed in the residential base zoning district. Additionally, if all required inclusionary units are provided on-site, developers can receive a variance of up to twenty percent from dimensional requirements (lot size, frontage, coverage, height, and setbacks) without Board of Zoning Appeals approval. This flexibility accommodates more units when the density bonus is utilized. Developers may also receive a twenty percent modification from parking standards if a parking study demonstrates no negative impact on on-street parking.

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For projects of six or fewer units, developers can opt to pay an in-lieu fee for each unit. This option helps smaller-site developers better capture the land's value by mitigating the complexities and potential revenue loss associated with providing on-site affordable units. These fees then contribute to Easton’s affordable housing fund, which supports other affordable housing projects and initiatives. The draft inclusionary zoning ordinance further includes diverse alternative compliance options. Developers can build inclusionary units off-site (under specific conditions) on town-owned land or through partnerships with housing organizations. They may also fulfill their requirement by purchasing and donating land to Easton or a housing organization for the required units, again under specific conditions. Another option allows single-family detached residential developments to provide different housing types, such as townhomes or duplexes, for their inclusionary units, thereby lowering per-unit construction costs. Lastly, a financial offset allows inclusionary units to differ from market-rate units in certain interior amenities and gross floor area. The draft IZ ordinance and additional background information from previous staff reports, along with the Planning Commission transmittal letter to the Council, is included in Appendices 4 and 5.

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CONCLUSION The research and analysis conducted by the Attainable Housing Task Force confirm that Easton faces a workforce housing gap that affects our community, from the public school system to the local economy. The data clearly show that single-family homes and most rental units are financially out of reach for households earning up to 100% of AMI—the very nurses, teachers, police officers, and service workers who are vital to the town’s daily life. The recommendations presented in this report represent a proactive approach to tackling the affordable housing challenge in Easton. There is not a single-solution fix; a variety of tools are needed that collectively can offer a clear path forward. By implementing these types of strategies, the Town of Easton can assure its workforce and its residents that it is committed to creating a vibrant, stable, and resilient community where everyone, regardless of their income, has the opportunity to live, work, and thrive.

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APPENDICES Appendix 1: Town of Easton Housing Background Report This report was produced by the Town of Easton’s Department of Planning and Zoning. Any data-driven insights provided herein are intended to inform housing policies and initiatives recommended by the Attainable Housing Task Force aimed at supporting affordable housing opportunities.

EXECUTIVE SUMMARY

A.​ Population and Demographics Easton, Maryland has experienced a striking transformation in its demographic and housing landscape over the most recent decades. From 1980 to 2010, Easton underwent a period of rapid expansion, nearly doubling its population from 7,536 to 15,945—a growth rate averaging 2.53 percent annually. This boom sharply contrasted with the modest increases seen in previous decades (with the exception of the decade between 1960 and 1970) and was supported by a robust housing development pipeline, with planned communities like Cookes Hope, Easton Club, Easton Club East, Douglass Landing, and Mulberry Station reshaping the town’s residential profile and historical development patterns. However, since 2010, this momentum has slowed dramatically. From 2010 to 2020, the annual growth rate dropped to 0.70 percent. Population growth has decelerated further to just 0.06 percent annually between 2020 and 2023. The alignment in population and housing unit growth from 2000 to 2023 suggests a period of stability, with each growing at approximately 1.7 percent annually. Yet this equilibrium conceals deeper shifts in who lives in Easton and the types of homes being built. The housing market has remained heavily weighted toward single-family detached homes, which account for 61 percent of all units, while more affordable and flexible housing types—duplexes, triplexes, and townhomes (“Missing Middle”)—make up just a fraction of the market. Multi-family units make up only nineteen percent of all units. Between 2000 and 2023, the number of detached units grew by 1,176, while only 84 new units were added in the missing middle housing category. This lack of diversity in housing stock poses challenges for affordability and for accommodating different household types, including young professionals, single adults, multigenerational families, and retirees looking to downsize. The low percentage of one-bedroom homes in Easton (16%) also suggests a limited supply of smaller, more affordable units. Demographic data reveals a profound age shift, as Easton has become increasingly dominated by older adults. While 21.5 percent of residents are under 18, Easton has the lowest share of 18–24 year-olds among comparable jurisdictions on the middle eastern shore and has seen a 40 percent decline in residents aged 25–44 since 2000. With the exception of Talbot County, Easton’s share of 35-44 year olds (9.6%) is also the lowest among comparable jurisdictions. In stark contrast, the share of residents over 55 has risen sharply, now comprising nearly 39 percent of the population. In fact, the decline in residents aged 25-44 since 2000 was offset by a 42 percent increase in the share of the population aged 55 and older. 32

The median age climbed from 38.4 in 2000 to 44.8 in 2020. For the White population, the median age has reached 53.5; markedly older than the median age for Black residents (39.4) and especially for Hispanic residents (24.9). These age gaps can influence housing preferences and needs for age-appropriate housing such: as smaller homes, multi-generational housing, accessible units, and assisted living options. At the same time, the decline in younger adults may suggest affordability barriers; higher housing costs and limited starter-home and rental inventory can push younger households to seek living and employment opportunities elsewhere. Racial and ethnic composition is also shifting. Easton’s Hispanic population has grown rapidly, from 3.5 percent of the population in 2000 to over 14 percent by 2020, while the Black population’s share declined by nearly 10 percentage points. These demographic changes come with distinct economic and housing needs. Hispanic and Black households tend to have larger household sizes, especially among renters. These households also face significantly lower median household incomes than White households. In 2023, the median income for Hispanic households was 41 percent lower than that of White households. For Black households, the gap was even wider at 56 percent. These disparities are reflected in housing tenure; while homeownership rates have climbed among White residents to 69 percent, only 29 percent of Black households and 24 percent of Hispanic households own their homes. Renting remains dominant among these groups. The economic profile of Easton reinforces these trends. While Easton’s median household income of $73,460 exceeds nearby cities like Cambridge and Denton, it falls well below the state median of $98,678 and trails neighboring Talbot ($84,378) and Queen Anne’s ($113,347) Counties. Although 37 percent of households earn over $100,000, a similarly large segment—also 37 percent—earn less than $50,000. Household structure data further highlights the growing needs of Easton’s aging population. 20 percent of all households are seniors living alone—a higher share than in surrounding counties—and over half of the households include someone aged 60 or older. In contrast, only 15 percent are married couples with children. This imbalance between seniors and young families can have implications for future service and housing needs, including the need for more accessible and smaller-scale housing while ensuring there are sufficient opportunities and support for families with children to stay or settle in Easton.

B.​ Employment and the Economy Easton’s economic landscape reveals strengths and challenges that are closely tied to the structure of its workforce and the nature of job growth in Talbot County. The most significant sector by employment is Education and Health Services, driven primarily by health care and social assistance. This sector offers wages averaging $63,241 annually, including hospitals, clinics, and nursing care facilities, and the sector provides a critical backbone for both employment and essential services in the county. However, most employment growth has occurred in significantly lower-paying sectors such as Retail Trade, Accommodation and Food Services, and Administrative Support. These sectors together account for nearly half the local workforce but offer average annual wages well below the countywide average. Between 2010 and 2023, job growth was concentrated in sectors with wages averaging $45,372, which is 33

27 percent lower than the countywide average. Sectors like manufacturing and professional services, which tend to offer higher salaries and require more specialized skills, have seen job losses. The average annual wage in these declining sectors is nearly $80,000—significantly higher than in the sectors gaining jobs. This shift indicates a structural change in Easton’s economy away from higher-wage, specialized employment toward lower-wage, service-oriented occupations. While sectors like Arts and Entertainment did see growth, these gains were limited and wages modest, averaging just over $37,000 annually. The implications are clear; as Easton’s population has grown, especially among retirees and remote workers, its economy has not kept pace in job creation. Since 2000, Easton’s population has grown by more than 5,400 people—a rate of 1.69 percent annually—while the number of jobs in Talbot County grew at only 0.18 percent annually, adding just 717 jobs. This mismatch means that many new residents are not entering the local labor market but are instead bringing income from other sources. As a result, housing demand appears to be increasingly decoupled from job creation. Development activity, especially since 2000, is focusing on developers building larger homes at higher price points, pricing out many workers in Easton’s growing service sectors. Workers earning below $40,000 annually—who make up 53 percent of the workforce—are especially affected. These income levels are far below what is required to afford market-rate housing in Easton, compounding the community’s affordability crisis. This disconnect is further exacerbated by the aging of Easton’s workforce. From 2000 to 2024, the share of workers aged 55 and over nearly doubled, from 15 percent to 30 percent, while the share of prime working-age residents (25–44) fell sharply. This reflects both the broader demographic shift and the exodus of younger workers likely driven by higher housing costs in the local market, fewer high-paying job opportunities, and a perceived lack of amenities attractive to young professionals. The loss of younger, mid-career talent not only weakens the labor force but also dampens the potential for entrepreneurship. Adding further strain is Easton’s dependence on in-commuting labor. Only 19 percent of Easton’s workforce both lives and works in town. The remaining 81 percent live outside municipal limits, with a substantial share commuting from neighboring counties. In Talbot County as a whole, 42 percent of the workforce commutes from outside the county, compared to significantly lower rates in nearby counties. Since job growth has been flat while population growth has been historically strong, this commuting pattern is not being driven by significant local job growth. It can reflect the inability of lower-wage workers to live in the communities where they work, adding to local traffic congestion and increasing infrastructure strain. It can also make it difficult for employers to competitively hire employees without proximate access to convenient and affordable housing. Talbot County’s reliance on outside labor, especially from Caroline, Dorchester, and Queen Anne’s counties, has grown by 18 percent since 2000. Job growth between 2000 and 2015 correlated directly with an increase in commuters from these counties, and while commuting dipped slightly during the 2020 downturn, the overall trend remains upward. The data shows that Easton and Talbot County has a predominant service economy increasingly reliant on lower-wage sectors, and a housing market increasingly geared toward wealthier residents. This imbalance

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can be addressed by a multi-pronged strategy that includes increasing the availability of affordable workforce housing, attracting higher-wage industries, and supporting skill development and entrepreneurship.

C.​ Housing Market While the number of housing units has grown in near lockstep with population growth from 2000 to 2023, affordability has sharply declined. This contradiction becomes clear when examining trends in home prices, rental rates, and the relationship between housing costs and income growth. The data shows that Talbot County's housing market has mirrored national patterns, peaking in 2006, collapsing during the Great Recession, and recovering slowly until 2016. However, since 2020, the market has surged again. Home values in Talbot County rose by 43 percent between 2020 and 2024, reaching a Zillow Home Value Index (ZHVI) of $478,000. In Easton specifically, the increase was equally pronounced—home values rose 31 percent since 2020, pushing even the least expensive homes out of reach for many households. For instance, homes in the 5th to 35th percentile range now exceed $300,000, which is unaffordable for households earning below the 2024 Area Median Income (AMI) of roughly $98,000 for a family of four. While average home values offer broader context, the divergence in affordability is most acute among detached single-family homes. These units experienced an 84 percent price increase between 2000 and 2010, a further 16 percent increase from 2010 to 2020, and another sharp jump of 35 percent since 2020. This escalation disproportionately affects first-time homebuyers and those in lower-income professions, such as education, food services, and healthcare support roles. Even townhomes and attached units—typically considered more affordable—have seen steady price increases, indicating that supply constraints are not limited to a single housing type. The housing cost-to-income ratio underscores the severity of this affordability crisis. In 2000, the ratio of median home price to income in Talbot County was 3.03 which is considered an affordable housing market. By 2024, it rose to 4.4, a level widely considered to indicate housing unaffordability where the typical household may struggle to afford a median-priced home. Notably, during the decade from 2010 to 2020, income growth slightly outpaced home price increases, providing temporary relief. But this trend has since reversed. From 2020 to 2024, home prices rose by 32.6 percent, far outpacing income growth at 21.2 percent. This growing disparity confirms that Easton’s housing market is once again becoming increasingly out of reach for middle- and working-class families. Easton’s rental market reflects similar dynamics. While the rental vacancy rate has remained relatively stable at 5.3 percent—a rate generally considered healthy—the homeowner vacancy rate has plummeted to 1.4 percent, indicating a tightening market. This imbalance suggests that homeownership opportunities are increasingly limited, particularly for younger adults and lower-income households. The fact that Easton’s median rent has consistently exceeded those in Denton and Cambridge underscores its status as a premium rental market in the region. The most dramatic increase occurred between 2000 and 2010, when rents soared by 74 percent, coinciding with a housing construction boom focused largely on detached 35

homes - offering little in the way of affordable rental inventory. Despite recent multi-family developments in the pipeline, the limited construction of more affordable rental units since 2000 continues to constrain options for those earning below $45,000 annually. More critically, there is an acute shortage of housing affordable to extremely low-income households—those earning less than $25,000 per year. These residents face a market where even entry-level rentals are out of financial reach. The data shows that rising rents in Easton are not just a result of supply and demand. Instead, they are being driven by changes in who is moving to town. Many new residents are retirees, remote workers, or people with independent income who aren’t tied to local jobs. These groups can often afford to pay more for housing, which pushes up prices for everyone, even if local wages haven’t kept pace. Overall, Easton’s housing market is becoming more divided. Prices are going up, affordable homes are in short supply, and income gaps are growing.

D.​ Housing Affordability Easton’s housing affordability challenges are reflected in the high number of cost-burdened households—those spending more than 30 percent of their income on housing. In 2023, half of all Easton renters fell into this category, compared to 29 percent of homeowners. The burden is especially severe for lower-income renters: 83 percent of those earning less than $50,000 annually are cost-burdened, limiting their ability to afford other basic needs and threatening housing stability. The data shows that middle-income households are not immune. Even among those earning close to or at the AMI, the cost of housing is stretching budgets. For example, owner-occupied households earning $75,000 or less are much more likely to be cost-burdened than those earning more (62%). Age is another factor—older renters (and homeowners) are increasingly vulnerable to housing cost burden and face increasing housing strain due to fixed incomes, health-related expenses, or loss of a partner. Even younger renters, many of whom are early in their careers, are significantly affected, which may impact their ability to save for a down payment or move toward homeownership. Racial disparities deepen the picture. Hispanic households face the highest levels of cost burden in Easton, with 82 percent of Hispanic homeowners and 69 percent of Hispanic renters spending more than 30 percent of their income on housing. More than half of Hispanic renters are severely cost-burdened, meaning they spend over half their income on rent. Black homeowners and renters also face disproportionate levels of cost burden, particularly among those who are severely burdened. These patterns point to broader inequities, including disparities in income, credit access, and housing choice; suggesting a need for targeted interventions that address affordability gaps such as intergenerational and multifamily housing options. The affordability gap is also reflected in home prices. A family of four earning 100 percent of Easton’s

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2024 AMI ($98,065) can afford a home priced at about $277,000, assuming a conventional mortgage and standard housing cost assumptions. Yet the median home sale price in Easton is now $450,000—38 percent higher than what a typical middle-income family can afford. Even the average price for an attached home, such as a townhome, exceeds the affordable threshold by 21 percent. For many households to afford even a modest home in Easton, they would need to earn approximately $137,000 annually—well above the median income for most professions in Easton. The rental market shows similar gaps. Fair Market Rents (FMRs) set by HUD, which guide housing assistance programs, are well below actual market rents in Easton. As of early 2025, the average rent for a three-bedroom apartment is $2,400, while the maximum affordable rent for a family earning 60 percent of AMI is $1,471. Even one-bedroom apartments are out of reach for these households, creating serious affordability challenges for those on fixed or modest incomes. With a median monthly rent of $2,549—27 percent higher than the national average—Easton has become one of the more expensive rental markets on Maryland’s Eastern Shore. The lack of affordable housing is especially problematic given the broader demographic and economic context: a growing population of older adults on fixed incomes, younger adults priced out of homeownership, and significant racial and income disparities in housing burden. Easton’s housing market is not aligned with the needs and incomes of a large segment of its workforce and population. Without expanded housing options—such as below-market rentals, affordable starter homes, and subsidized units—these disparities will continue to grow.

E.​ Exclusionary Zoning Easton and the broader Talbot County region face deep challenges in addressing housing affordability, and exclusionary zoning is one of the more significant yet least visible contributors. Exclusionary zoning refers to land use regulations that restrict the kinds of housing allowed in particular areas, often through rules that appear benign—such as large minimum lot sizes, limitations on building height, or bans on multi-family housing—but that have the effect of limiting who can afford to live there. These policies, even if well-intentioned or designed to preserve a certain neighborhood character and environmental feature, can effectively exclude lower-income residents and reinforce patterns of economic and racial segregation. Consider the example of a half-acre lot zoned only for single-family homes. A developer might otherwise have the option to build a modest starter home, a group of townhomes, or a large luxury home. Yet restrictive zoning rules eliminate the first two options, leaving the developer with no financial incentive but to construct a high-end, high-cost home. This type of land-use policy distorts the market by funneling housing production into the upper-income tier, even if there is far greater demand for smaller, more affordable options like townhomes, duplexes, or accessible one-level units for aging residents. This disconnect between zoning policy and housing needs has broader implications. While Easton and Talbot County do have a market for large, upscale homes—often targeted toward retirees or second-home buyers—there is an equally critical need for housing that serves teachers, healthcare workers, restaurant 37

staff, young families, and others. These essential workers are being priced out of the communities they serve. More diverse housing—both in form and price—could meet this demand, but only if zoning codes allow for it. In the unincorporated areas of Talbot County, the situation is even more constrained. The County’s comprehensive plan prioritizes environmental protection and rural preservation, including limits on sewer expansion and strict land-use controls. While these goals are important, they are implemented through zoning that bans all but single-family detached homes and mandates very low-density development with large lot sizes and low building heights. These constraints limit housing supply, drive up land and construction costs, and make it virtually impossible to build affordable or workforce housing outside of town centers. The result is a spatial concentration of high-income households and a de facto form of housing segregation. This segregation isn’t just economic—it has racial and social implications as well. Figures from the 2020 Census illustrate that areas with the highest home values also have the lowest concentrations of Black and Hispanic residents. Elsewhere in the county, growth potential is limited. The towns of Oxford and St. Michaels have minimal land available for future development, and large-scale projects like Lakeside at Trappe—which will eventually include around 2,500 homes—have not required any affordable housing provisions. Despite its scale, the Lakeside project was approved without conditions that would ensure housing for lower- and moderate-income households, missing a critical opportunity to introduce affordability. Altogether, Talbot County’s current zoning and development policies restrict housing diversity and concentrate affordability challenges in Easton. Without reform, these policies will continue to drive up housing costs, deepen socioeconomic divisions, and reduce the availability of homes for workers and families essential to the community’s health and sustainability. F.​ Key Insights from the Easton Comprehensive Plan and Previous Housing Surveys Easton's housing challenges are also reflected in public sentiment, policy goals, and the direct experiences of local businesses. As early as the 2010 Comprehensive Plan, Easton recognized a pressing shortage of affordable housing, particularly in the entry-level and move-up segments. The Plan cited growing segregation of housing types, with new development catering largely to higher-income buyers, and raised concerns about a growing reliance on a commuter workforce. Service and labor employees, the Plan noted, often could not afford to live in the town they worked in, weakening Easton’s sense of community and economic cohesion. To address this, the Plan explicitly called for the adoption of Inclusionary Zoning—a policy requiring a share of affordable units in all residential developments above a certain size threshold. The intention was to create a more consistent pipeline of affordable housing rather than relying on negotiations with developers. The Plan also included a set of supportive housing objectives: ensuring a physical mix of

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housing types to promote visual integration and neighborhood diversity, increasing density to support walkability and infrastructure efficiency, and expanding housing opportunities for low-income families through partnerships with the Talbot Housing Authority. A 2022 survey conducted by American Strategies found that a majority of Talbot County residents view the lack of affordable housing as a major concern. Over two-thirds of respondents believe the County has too little housing for young adults, lower-income households, and service workers. Moreover, 67 percent supported requiring developers to include sub-market-rate units in new housing projects, and 62 percent favored offering tax incentives to those who do. While support was somewhat lower for measures like easing zoning restrictions or reducing regulatory barriers, majorities still endorsed these reforms—indicating a public that is not only aware of the affordability crisis but broadly supportive of government action to address it. Businesses in Easton are feeling the effects just as acutely. According to a 2024 survey by the Talbot County Chamber of Commerce, 85 percent of local businesses agree that Easton lacks sufficient affordable housing, and 83 percent believe that solving this issue would directly benefit their operations. More than half report struggling to attract and retain employees due to long commute times, difficulty filling open positions, rising wage expectations, and high turnover—problems closely linked to Easton’s housing market. Nearly one-third of surveyed businesses said they had lost employees in the past year due to housing-related issues. Employees themselves, according to business respondents, are facing multiple pressures. High rents and mortgage costs, a lack of housing options, long commutes, and in some cases substandard housing conditions are cited as common challenges. Despite this, only 10 percent of businesses offer any form of housing assistance. However, 78 percent said they would support efforts to increase housing affordability in Easton, with strong backing for tax incentives (85%), public-private partnerships (70%), and zoning changes (58%). Together, the findings suggest that the demand for affordable and diverse housing in Easton is broadly recognized. Residents want solutions that protect the character of their communities while expanding access to housing. Businesses want a stable, local workforce that can live near where they work. Easton has partially laid out a roadmap in its Comprehensive Plan.

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SECTION 1: POPULATION AND DEMOGRAPHICS A.​ Population Figure 1 shows Easton’s population growth from 1940 through 2023. Notable is Easton’s growth in three consecutive decades; 1980 to 2010. During this time, Easton’s population approximately doubled in size; from 7,536 citizens in 1980 to 15,945 citizens in 2010. The average annual growth rate during this period was 2.53 percent, which was markedly different in the decades prior going all the way back to 1940. The rapid growth rate increased demand for housing and services, but was likely offset by an expanded property tax base. The growth rate prior to 1980 was smaller at 1.71 percent, even when taking into account a 2.74 percent annual growth rate between 1950 and 1960. Table 1: Easton Population and Annual Growth Rate, 1940 - 2023 Year

1940

1950

1960

1970

1980

1990

2000

2010

2020

2023

Pop.

4,528

4,836

6,337

6,809

7,536

9,372

11,708

15,945

17,101

17,202

–

.66

2.74

.72

1.02

2.20

2.25

3.14

.70

.06

% Annual Growth Rate

Population growth in Easton slowed significantly after 2010. The annual growth rate from 2010 to 2020 was 0.70 percent; a pace of growth that was not seen since the decade between 1960 to 1970. From 2020 to 2023, the annual growth rate slowed even further to 0.06 percent. B.​ Housing Units Table 2 shows the number of housing units from 1940 to 2023 as well as the annual housing growth rate. From 1980 to 1990, the annual growth rate was 3.12 percent. The growth rate dropped the next decade to 1.63 percent but then picked back up from 2000 to 2010 to 3.21 percent. During this decade, Easton added over 2,000 housing units; a 49 percent increase.

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Several planned developments were approved and constructed between 1980 and 2010. Major developments included: ●​ 1980s: Golton, Mallard Ridge, Pennsfield, Stoney Ridge ●​ 1990s: Chapel East (133 lots), Cooks Hope (326 lots), Easton Club (340), Londonderry, Matthewstown Run (184), Papermill Crossing (12), Pennsfield , and Thread Haven ●​ 2000s: Ashby Commons (88), Douglass Landing (133), Easton Club East (452), Easton Village (250), and Mulberry Station (208) Table 2: Easton Housing Units and Annual Housing Growth Rate, 1940 - 2023 Year

1940

1950

1960

1970

1980

1990

2000

2010

2020

2023

Units

1,606

1,870

2,304

2,680

3,376

4,592

5,399

7,405

7,921

7,905

–

1.53

2.11

1.52

2.34

3.12

1.63

3.21

0.68

-0.02

% Annual Growth Rate

Consistent with the dramatic drop in the rate of population growth since 2010, the rate of growth in the number of housing units decreased dramatically after 2010 with only 500 units having been constructed up to 2023. This drop resulted in an annual growth rate of 0.50 percent.

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Figure 2 shows the correlation between the growth in population and housing units from 1940 to 2023. Figure 3 shows the correlation in the rates of population and housing unit growth during the same time period. During the 1980s, the growth in the number of housing units outpaced the growth in population; housing supply exceeded demand. The 1990s saw the rate of population growth increase to meet the oversupply of housing. What is notable is that the period from 2000 to 2023 was one of a balanced and stable housing market. During this period, Easton’s population grew at a rate of 1.69 percent annually while the number of housing units grew at an annual rate of 1.67 percent. This balance was reflected even after Easton’s growth slowed dramatically after 2010. While the growth rates are aligned, it’s important to assess whether the types and location of housing being built since 2010 meets the needs of all segments of the population, especially for lower-income residents and renters, and whether Easton’s housing costs are rising faster than incomes. By doing these assessments, it will allow the town to make informed decisions about future housing policy. C.​ Age Easton’s largest percentage of the population is persons under 18 years of age at 21.5 percent; generally consistent with percentages in comparable jurisdictions (Figure 4). The notable exception is Talbot County where the percentage is considerably lower at 18.75 percent6. Easton’s share of 18-24 year olds is the lowest of any comparable jurisdiction at approximately 5 percent of the population. In comparison, the percentage of 18-24 year olds in Cambridge is approximately 7 percent and the percentage in Denton is approximately 11.5 percent. Easton’s share of 35-44 year olds, at 9.6 percent, is also the lowest among comparable jurisdictions outside of Talbot County. Denton’s share is approximately 14 percent and Cambridge’s share is approximately 13 percent. Interestingly, Easton’s share of people between the ages of 25-34 (13.3%) exceeds comparable jurisdictions with the exception of Cambridge (14.2%). Easton’s share of older adults is also greater than comparable jurisdictions. Approximately 16 percent of the population is 75 and older. In comparison, the

6

Comparable jurisdictions in the background report include the Town of Denton, City of Cambridge, and the counties of Caroline, Dorchester, Queen Anne’s and Talbot.

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percentages in Cambridge and Denton are approximately 8 percent and 6 percent respectively. Figure 5 shows that the population in Easton of people aged 55+ increased nearly 42 percent since 2000, with the largest increase occurring between 2000 and 2010. In 2023, the older population in this bracket comprised nearly 39 percent of Easton’s population; far outpacing Denton (28%) and Cambridge (32%) and exceeded only by Talbot County as a whole (45%). On the flipside, the percentage of younger adults between the ages of 25 - 44 has declined 40 percent since 2000. As previously stated, the period from 2000 to 2020 saw a historically high increase in population with the approval of several planned developments including Ashby Commons, Douglass Landing, Easton Club East, Easton Village, and Mulberry Station. In addition, approved projects in the 1990s were still undergoing full build-out. For younger adults just entering or early into their careers or working in lower-wage positions, the prices of these larger homes constructed in most of these communities were most likely out of reach. In summary, while Easton has a significant percentage of residents under 18 years of age, aligning with comparable jurisdictions, the extremely low percentage of 18-24 year olds is a major red flag, indicating a clear lack of opportunities for young adults. The 40 percent decline in the 25-44 age group is a serious concern, suggesting that families and mid-career professionals are leaving Easton. The rapid increase in the 55+ population since 2000 is a major demographic shift. Easton is clearly becoming an aging community, with a shrinking younger adult population. The increase in older adults could create demand for senior housing and services.

D.​ Race/Ethnicity The fastest growing racial/ethnic demographic in Easton over the last two decades, in both raw numbers and percentage, was the Hispanic population. In 2000, Hispanics represented 3.5 percent of the population in 2000. That percentage increased to 14.35 percent of the population in 2020. During these two decades, the Black declined. As a result, the percentage of Black population declined by 9.3 percent and the White population declined by 6.79 percent. Figure 6 shows the changes in the racial profile of Easton’s population in the last two decades. The representation of the Hispanic population increased substantially. In 2000, Hispanics represented 3.5 percent of the total population. In 2020, the share of the Hispanic population increased to approximately 14 percent. During that same time period, the representative share of the Black population declined significantly, from approximately 24 percent in 2000 to 14 percent in 2020. Although the white population increased in total numbers, their representative share of the population dropped by approximately 7 percent.

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The significant growth of the Hispanic population could lead to increased demand for housing types, such as affordable rentals, and preferences that cater to larger families or multigenerational households. It’s important to understand any differences in household incomes between the three demographic groups, as well as trends in housing prices, to determine whether affordability challenges are disproportionately affecting the Black and rising Hispanic populations in Easton. E.​ Median Age Table 3: Median Age 2000

2010

2020

Median Age (Easton)

38.4

41.2

44.8

Median Age (Maryland)

36.0

38.0

38.8

Source: United States Census Bureau, 2020 Decennial Census

Easton's median age has steadily increased from 2000 to 2020, reflecting the town's overall aging trend. From 2000 to 2020, the median age in Easton increased from 38.4 years to 44.8 years (Table 3)7. The 2020 median age in Easton was higher than Maryland’s median age of 38.8. Figure 7, however, shows significant disparities in median age when broken down by race and ethnicity. The Hispanic population had a very young median age in 2020 at 24.9 years. The Black median age in 2020 was 39.4 years. When factoring out the median ages of the Black and Hispanic populations, the median age for the White population in 2020 was much higher than the overall Easton median age of 44.8 at 53.5 years. In fact, since 2010, the median age for the White population increased by nearly 7 percent. The age disparities highlight the need for a diverse housing stock that can accommodate the needs of different age groups. Given Easton’s high cost of housing (see the Housing Affordability section below), younger families may face affordability challenges in finding suitable housing. The very young median age of Hispanic households suggests potential demand for more affordable family-friendly housing, such as larger rental units or starter homes. There may also be a need for housing that accommodates multigenerational families. The significantly higher median age (53.5 years) of the White population also indicates a need for senior-friendly housing options. Seniors on fixed incomes may struggle with housing affordability, particularly when balancing those costs with the costs of healthcare, prescription drugs, groceries and other essential needs and services. In addition, downsizing their homes are desired by many seniors due to the loss of a spouse, an absence of school-aged children, or living in a house 7

In Talbot County, the 2020 median age was even higher at 50.7 years.

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that no longer fits their current needs or abilities. Affordable senior housing options, such as smaller, more manageable homes or apartments for downsizing; accessible housing with features that accommodate mobility challenges; and assisted living facilities or retirement communities and programs to assist with housing costs, may also need to be prioritized. F.​ Households and Families Figure 8 shows that Easton has a relatively low percentage of married couple households with children in Easton (15%); lower than Maryland’s 18 percent. However, Easton has more married couple households with children than Cambridge (8%) and Denton (10%) as well as the Counties of Dorchester (10%) and Talbot (13%). Queen Anne’s (20%) is the only comparable jurisdiction that exceeds Easton’s percentage. Figure 8 also shows that the number of householders aged 65 and older living alone in Easton is 20 percent. This percentage exceeds Talbot County (19%), Cambridge (18%), Dorchester (16%), Denton (15%), and Queen Anne’s County (12%). The percentage significantly increases when considering households with one or more individuals aged 65 or older; the percentage increases to 40 percent. Adding households with one or more people 60 years and over increases the percentage to 52 percent (Figure 9). The breakout of the types of households in Easton further reinforces the trend of Easton becoming an aging community. The high number of senior individuals living alone could create a demand for smaller, more manageable housing options, as well as assisted living or senior care facilities. G.​ Household Size The average household size in Easton has increased from 2.14 in 2000 to 2.31 in 2020. However, when breaking down the average household size for owner and renter occupied units by race and ethnicity, there are fairly large discrepancies (Figure 10). The average

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household size for Black households in owner occupied units (3.27) are significantly larger than the overall average. For renter occupied units, Hispanic households have a far larger average household size (3.78) than black and white renter households. The larger household sizes among Black homeowners and Hispanic renters reasonably indicates a greater need for affordable larger housing units. A lack of these types of units could potentially lead to overcrowding or affordability issues. H.​ Household Income Easton’s Median Household Income (MHI) in 2023 of $73,460 was lower than the state median income of $98,678 (Figure 11). Among comparable jurisdictions, Easton’s MHI was surpassed only by Talbot County ($84,378) and Queen Anne’s County ($113,347). Easton’s MHI was 59 percent higher than the City of Cambridge ($46,261) and 15 percent higher than the Town of Denton ($63,769). Figure 12 shows that households earning a median income of $100,000 or higher comprised 37 percent of Easton’s households. This level of income was surpassed only by Talbot County (42%) and Queen Anne’s County (56%). Easton has a smaller share of lower income households than Denton and Cambridge. In Easton, 37 percent of households earned less than $50,000. This percentage is lower than Denton (42.9%) and Cambridge (52.8%). Differences are significant when broken down by race/ethnicity (Figure 13). The 2023 MHI for Black

and Hispanic households were 56 percent and 41 percent lower respectively than White households. I.​ Housing Tenure Since 2000, Easton has shifted towards predominantly homeowners. In 2000, 46 percent of the units were renter occupied. In 2023, the number of renter occupied units dropped to 40 percent (Figure 14). 46

What is interesting is the 11 percent increase in owner occupied units from 2000 to 2010 and then a five percentage point drop by 2023. The percentage drop could be due to several factors including the tighter lending standards post recession and rising home costs. Regarding tenure by age segments, housing tenure data shows that 21 percent of householders up to 34 years in age are in renter occupied homes (versus 7% in owner occupied homes) and 39 percent of householders up to 44 years in age are in renter occupied homes (versus 17% in owner occupied homes). However, the trend flips when looking at the housing tenure of householders aged 45 years and up; 83 percent of are in owner occupied homes (versus 61% in renter occupied homes). Figure 15 shows that homeownership rates increase significantly with age; younger adults struggle with homeownership in Easton, especially for those just starting their careers who cannot afford the high housing costs in Easton relative to their income. If anything, it impacts the demographic makeup of Easton, as evidenced in the town’s relatively high median age; younger adults cannot afford to live here and choose to live where there are greater affordability options.

Figures 16 through 18 highlight persistent disparities in housing tenure by race. White households have significantly higher homeownership rates compared to Black and Hispanic households, indicating ongoing challenges in achieving access to homeownership for these two groups. When looking at trends in owner and renter-occupied housing by race from 2000 to 2023, homeownership is consistently the dominant tenure type for White households throughout the period. Homeownership rates for White households show an overall increase from 63 percent in 2000 to 69 percent in 2023, with fluctuations in between.

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Renting is more prevalent than homeownership for Black households. Since 2000, homeownership rates for Black households show a small positive trend toward increased homeownership over the years (increasing from 26% to 29%). However, renting remains a significant tenure type for this group. Hispanic households are the most predominant renters in Easton (76%). Although homeownership rates for Hispanic households showed a small increase from 20 percent in 2000 to 24 percent in 2023, it remains the lowest among the three groups. J.​ Housing Type In Easton, single-family detached homes dominate (61%). The potentially more affordable missing middle housing types of duplexes, triplexes, and fourplexes combined comprise just 12 percent of occupied units. Single-family attached housing, or townhomes, are often considered more affordable housing options than single-family detached homes. In Easton, this housing type comprises only 8 percent of homes (Figure 19).

Table 4 below shows that, from 2000 to 2023, the number of single-family detached units increased by 61 percent, with 1,776 new units built during that period; outpacing the number of single-family attached units built (212). The number of units in the middle housing types of duplexes, triplexes, and fourplexes actually increased the least (84 units). Table 4: Easton Housing Types, 2000 vs. 2023 Column 1

2000

2023

SFD

2,889

4,665

1,176

SFA

417

629

212

Middle Housing

831

915

84

Change

Source: Decennial Census and 2023 ACS 5-Year Estimates

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The data indicates the lack of housing diversity in Easton. The limited availability of middle housing and townhomes, coupled with the significant growth in single-family detached homes, suggests potential affordability challenges in Easton. Single-family detached homes are often more expensive (see Section 3 below), which limits housing options for different household types at different income levels. The significant growth in single-family detached homes also suggests potential suburban sprawl and development patterns that prioritize this housing type. Approximately 19 percent of homes in Easton have four or more bedrooms. Homes with two to three bedrooms comprise 65 percent of homes. Only 16 percent of homes in Easton are one bedrooms or less. The low percentage of 1 bedroom or less units suggests a limited supply of smaller, more affordable units, which poses challenges for younger individuals, young couples, and retirees looking to age in place but are seeking to downsize from their larger homes.

SECTION TWO: EMPLOYMENT AND THE ECONOMY A.​ Employment

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Using the Quarterly Census of Employment and Wages (QCEW) published by the Maryland Department of Labor, the largest number of jobs in Talbot County are in the Education and Health Services supersector with an average annual pay of $63,241; close to the national average wage of $67,320 (Figures 20 and 21). The sector of Health Care and Social Assistance comprises 95 percent of the workforce in this supersector. The types of jobs in this sector include ambulatory health care services, hospitals, and nursing and residential care facilities. Social assistance is also included in this sector because of the difficulty to distinguish between the boundaries of this activity. The services provided by establishments in this sector are typically delivered by trained professionals. The second largest supersector in Talbot County is Trade, Transportation, and Utilities. The sector of retail trade comprises 74 percent of the workforce in this supersector. Retail trade is one of the lower wage subsectors in Easton with an average annual pay of $37,048. This sector comprises two main types of retailers: store and nonstore retailers. Store retailers operate fixed point-of-sale locations, but also include after-sales services such as repairs and installations. Nonstore retailers differ in their methods, in that they reach customers and market merchandise through methods such as advertising, catalogs, door-to-door solicitation, in-home demonstrations, portable street stalls, and vending machines. Food and beverage, gas stations, clothing and accessories, general merchandise, sporting goods, book, and music stores are included in this sector. The third largest supersector in Easton is Leisure and Hospitality, which employs 16 percent of the workers in Talbot County. The Accommodation and Food Services Sector comprises 78 percent of the workforce in this supersector. This sector provides customers with lodging and/or preparing meals, snacks, and beverages for immediate consumption and includes both accommodation and food services establishments because the two activities are often combined at the same establishment. The Talbot County average annual pay of $30,369 is the lowest of any sector. The types of jobs include those employed in full- and limited service restaurants including cooks and other food preparation workers, managers, and wait staff in food service establishments; and housekeeping and janitorial workers; desk clerks; lodging managers; maids; and housekeepers associated with lodging establishments. The fourth largest supersector is Professional and Business Services, which employ 14 percent of workers in Talbot County with an average annual pay of $58,669. Jobs within this category include legal services; accounting; architectural, engineering and related services; and company management. The sector of Administrative Support and Waste Services is also included. The sector employs 7 percent of Talbot County residents and includes office administration, facility support, security services, and other business support services. Waste services include employment in waste collection, treatment, and disposal. The Administrative Support and Waste Services sector has a lower average annual pay than the overall subsector at $46,773. The sectors of Retail Trade; Accommodation and Food Services; Arts, Entertainment and Recreation; Administrative and Support and Waste Management; and the Other Services sector comprise 42 percent of Talbot County’s workforce with an average annual pay of $39,782; this amount equates to 73 percent of the average annual pay for all industry sectors. The largest job gains from 2010 to 2023 were in Arts and Entertainment (340), Administrative Support and Waste Services (214), Retail Trade (198) and Construction (180) (Figure 22). The 2023 average annual pay for these four sectors was $45,372.

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The four largest sectors with job losses during the same period were in Manufacturing (352), Professional, Scientific, and Technical Services (213), Finance and Insurance (149), and Information (117) (Figure 23). The 2023 average annual pay in these four sectors was $79,941. These figures show a shift in Talbot County towards lower-paying sectors. The four largest job gains by sector averaged an annual pay that was 27 percent lower than the overall average annual pay for all sectors ($54,397). Conversely, the sectors with the largest job losses had a significantly higher average annual pay at $79,941. Since 2010, Talbot County’s economy has shifted from jobs that require more education and specialized training towards jobs that do not necessarily require specialized skills or more higher education training, including service-oriented occupations. The outlier is Arts, Entertainment, and Recreation, which includes jobs that are part of the creative economy and professions in the performance arts; writing; painting; photography; and employees associated with museums, parks, and recreation centers. The average annual pay in this sector is $37,294. A significant portion of Talbot County’s workforce (42%) is concentrated in sectors with lower average annual pay such as Retail Trade ($37,048) and Accommodation and Food Services ($30,369); highlighting the significant role these lower-paying industries play in Easton's economy. The concentration in lower-paying job sectors that typically offer limited income growth potential makes it harder to afford housing in Easton where homes are increasingly expensive to buy or rent, especially when employees in these service sectors often desire to live close to their places of employment. The lower average wages in these sectors means limited budgets for transportation. Since retail and hospitality jobs tend to be concentrated in specific areas, such as the shopping centers and the downtown area in Easton, employees living close to these areas can increase access to job opportunities and make it easier to find employment within walking or biking distance. Lastly, jobs in these sectors often involve shift work, irregular hours, or on-call scheduling. Living close to work can be essential for accommodating these unpredictable schedules and ensuring workers can get to their jobs on time. It’s important to note that, despite the growth in jobs by sector described above, overall job growth in Talbot County since 2000 has remained flat. From 2000 to 2023, Talbot County gained 717 jobs; an annual growth rate of just 0.18 percent. Several factors may have contributed to the relatively stagnant job growth, including a lack of economic diversification strategies. Another factor is that it is challenging to attract new industries, or retain existing businesses, if it is difficult for employers to find a workforce that can afford to live in the County.

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From 2000 to 2023, Easton gained 5,494 residents at an annual growth rate of 1.69 percent8. The significant population growth, in comparison to the flat job growth, creates challenges such as the inability to capture more tax revenue from commercial development to offset the higher strains on infrastructure caused by the increased population; commercial development tends to cost less in services than residential development as they demand less in services (Figure 24). However, the results of the comparison between job and population growth since 2000 also suggests that the demand for housing is not being driven by new job creation but rather from: retirees, those with independent income sources, remote workers, and residents commuting to jobs in neighboring jurisdictions. The demand from retirees and others may explain the increased unaffordability of homes constructed during this period as developers were meeting a market demand for larger homes from households with higher incomes. B.​ Workers Figure 25 shows the share of private sector workers by age group in 2000, 2010, 2020, and 2024. During this period, there was a significant increase in older workers aged 65 and older (from 4% to 12%) and 55-64 (from 11% to 18%). During that same time, there was a decline in younger workers aged 25 to 34 (from 22% to 19%), 35-44 (from 27% to 19%) and 45-54 (from 21% to 17%). Given that the population in Easton of people aged 55+ increased nearly 42 percent since 2000, and the percentage of younger adults between the ages of 25 - 44 declined 40 percent, it may be that these demographic shifts are contributing to the aging of its workforce and the younger workforce leaving Easton for better job opportunities, more amenity-rich environments closely matched to the preferences of their age groups, and more affordable housing elsewhere.

C.​ Wages Regarding earnings, 53 percent of Easton workers make less than $40,000 per year, with 21 percent of the workforce making $15,000 or less in annual income. Since 2002, the percentage of workers making $40,000 or more in annual earnings has increased by 25 percent (Figure 26). 8

Talbot County’s annual growth rate from 2000 to 2023 was 0.48%.

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D.​ Commuting Talbot County relies more on workers from outside the county to fill its jobs compared to its neighbors. A majority of jobs in Talbot County (58%) are held by Talbot County residents. However, among the bordering counties of Caroline (62%), Dorchester (67%) and Queen Anne’s (67%), Talbot County’s percentage is the lowest (Figure 27). The fact that 42% of Talbot County's workforce commutes from outside the county indicates a significant reliance on workers from other areas (Figure 28). This suggests that the local labor pool is not sufficient to meet the demands of the county's employers. If the percentage of job growth since 2000 in Talbot County exceeded population growth, then the percentage of workers coming from outside the County could be explained by the job demand. However, job growth has remained relatively flat since 2000 and the annual rate of population growth has exceeded the rate of job growth. In terms of in-flow commuters, 80 percent of the Talbot County workforce commutes from the neighboring counties of Caroline (36%), Dorchester (29%), and Queen Anne’s (15%) (Figure 29). The County’s reliance on an outside workforce from its neighboring counties has increased since 2000 by 18 percent. This amount of commuters can represent a substantial number of vehicles on certain roads that may contribute to traffic congestion and strain on transportation infrastructure, particularly during peak commuting hours. Figure 30 compares job growth with in-flow commuting from the neighboring three counties. The data shows that when the number of jobs in Talbot County increased between 2000 and 2015, the number of in-flow commuters from the three neighboring counties of Caroline, Dorchester, and Queen Anne’s also increased. This suggests that job growth is a significant driver of in-commuting, as more jobs attract workers from outside the County.

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Similarly, when the number of jobs dropped between 2015 and 2020, the number of in-flow commuters also decreased. This further supports the correlation between job availability and commuting patterns. Despite the decline of in-flow commuters in 2020, the overall trend since 2000 to 2020 shows a net increase in in-flow commuters (over 1,000 commuters). This indicates that Talbot County's reliance on workers from neighboring counties has grown over the past two decades. Further, according to the United States Census, within the municipal boundaries of Easton only 19 percent of Easton workers live and work within the town; 81 percent of Easton workers are employed in Easton but live outside of town (Figure 31)9. The economic interdependence between Talbot County and its neighbors is clear as Talbot County relies on its neighbors for its workforce, and the neighboring counties benefit from employment opportunities in Talbot.

Figure 31

9

United States Census Bureau, On the Map, Inflow/Outflow Job Counts, 2022.

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SECTION THREE: HOUSING MARKET As previously mentioned, Easton’s balanced growth between population and housing units from 2000 to 2023 can suggest stable housing affordability as an adequate supply to meet demand could help prevent drastic price spikes. To determine whether this assumption is accurate, an examination of the change in housing costs over time relative to income levels is necessary. A.​ Prices: Talbot County Regarding housing costs, the Zillow Home Value Index (ZHVI) can be used to understand the general direction of home values in a community over time10. Nationally, after September of 2006 home prices peaked. By late 2006 and into 2007, home prices then declined. By 2008, the housing market had fully collapsed leading to a broader financial crisis. The period between 2007 and 2009 was known as the Great Recession. The housing market bottomed out in 2012 and thereafter the market experienced a slow recovery through 2016. Talbot County showed a similar pattern. Figure 32 shows the ZHVI from January of 2000 through December of 202411. At the end of September 2006, the ZHVI for the County peaked at $420,000. From September 2006 through 2009, the ZHVI dropped 21 percent. By September of 2012, the ZHVI bottomed out at $280,000. Thereafter, Talbot County showed a steady increase in the ZHVI. By the end of 2019, the index rose 19 percent to a value of $334,000. From the beginning of 2015 through 2019, the ZHVI rose at an average annual rate of 2.4 percent. However, the ZHVI then accelerated from the beginning of 2020 where home values rose 43 percent to $478,000 at the end of 2024. This represents an average yearly rate increase of approximately 9 percent since 2020. While the ZHVI is a useful tool for understanding general trends in Talbot County, it’s important to note that the ZVHI is not a substitute for professional home value appraisals. The ZHVI also tends to be more accurate in areas with strong housing data. Therefore, to assess the general accuracy of the index, other sources of information should be considered. This report reviewed the median sold price of homes in Talbot County in 2000, 2010, 2020, and 2024 using Bright MLS statistics provided by the Mid-Shore Board of Realtors. The values were then mapped in Figure 33 and compared to the ZHVI. The chart shows that both followed the same trend 10

The ZHVI is a measure of the typical home value and market changes across a given region and housing type. It reflects the typical value for homes in the 35th to 65th percentile range. 11 The ZHVI was not available from October 2006 through January 2007.

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from 2000 to 2024. In addition, Table 5 shows the percentage differences between ZHVI and MLS data, which ranged from a high of 13 percent in 2000 to a low of 2 percent in 2024. The average difference was 7 percent. This suggests that the ZHVI is reasonably accurate and can be relied on as a valid source of capturing the general trend of home values in Talbot County. In addition, the MLS values may not capture all housing transactions such as homes sold by the owner. There may also be delays in the sale prices of homes sold during any one year from new construction. In conclusion, there is confidence that the ZHVI (in addition to MLS data) is a good source of information to measure home values and trends over time. Table 5: Talbot County ZHVI vs. MLS and Percentage Difference 2000

2010

2020

2024

ZHVI

$199,078

$313,231

$360,581

$478,000

MLS

$176,000

$302,500

$400,000

$486,000

% Difference

13%

3.5%

10%

2%

B.​ Prices: Easton Median Values Figure 34 compares the ZHVI and MLS data of home values in Easton from the years 2000 through 2024. Two things are notable. First, the trend of home values during that time was similar to Talbot County. Second, the average percentage difference in these two sources of data (7%) confirms confidence in the use of the ZHVI for Easton. Figure 35 shows the ZHVI in specific years. Home values in Easton have risen 131 percent since 2000. The largest increase was between 2000 and 2010 when home values rose 52 percent. Between 2010 and 2020, the increase in Easton home values slowed to 17 percent, most likely due to the effects of the Great Recession and its slow recovery. Even so, the impact of the recession on median home values was not negatively impacted; suggesting that high-end sales for wealthier buyers may have been less affected by the recession compared to households within lower-tier incomes. However, since 2020, home values in Easton have risen 31 percent. Even more concerning when related to affordability is that the typical home value of the least expensive homes at the end of 2024, or those

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homes in the 5th to 35th percentile, was $300,26912. In other words, the least expensive homes in Easton are out of reach for most households making less than 100 percent of Easton’s 2024 AMI of approximately $98,000 for a family of four, including first-time homebuyers (see Section Four). C.​ Prices: Easton Average Sales Prices While median home values are a more accurate representation of typical home prices, average home values can provide insights into home value trends as well. Figure 36 shows the average home price of homes sold over time (2000-2024) in Easton for detached units and attached units such as townhomes. For attached units, the chart shows the average sales price rose 21 percent from 2000 to 2010 and 19 percent from 2010 to 2020. The increase in the average sales price, however, increased 27 percent from 2000 to 2024, outpacing the prior decades. A fairly consistent increase in average sales prices for attached units across the decades suggests steady demand, but a potentially limited supply for this type of housing in Easton. In addition, the steady growth in the average sales price over the decades, although not as dramatic as single-family detached homes (see below), poses affordability challenges for those households seeking this particular housing type. The percentage increases are far more dramatic for detached units. From 2000 to 2010, the percentage increase in sales price was 84 percent. This was likely due to the housing boom prior to the housing crisis that led to the Great Recession. Average home values still increased between 2010 and 2020, although at a much lower percentage of 16 percent. Since 2020, average home values accelerated their increase to 35 percent. This sharp increase from the prior decade indicates a renewed acceleration in home price growth for single-family detached units, with some of this occurring during a period of lower interest rates and during the pandemic. In summary, the high costs of single-family detached units in Easton raises concerns about housing affordability for these types of units, especially for first time buyers and those in professions with lower annual wage pay and limited opportunities for income growth. D.​ Housing Costs and Income In 2024, Talbot County’s Annual Median Income (AMI) was $106,500. Each year, the Easton Affordable Housing Board adjusts the County’s AMI to reflect more accurately the median income for Easton residents. In 2020, Easton AMI was $98,065. Given the fairly small difference, the Home price to Income Ratio for Talbot County can be a key measure of housing affordability in Easton. Using the median sold price data provided by the MSBR, the ratio in 2024 was 4.4; or the number of years it takes to buy a median-priced home in Talbot County. In 2000, the ratio was 3.03. This increase means that housing affordability has declined significantly since 2000. Even after the Great Recession, the ratio increased to 4.12. 12

ZHVI All Homes - Bottom Tier Time Series ($).

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Another useful tool is to measure whether income has kept pace with housing costs over time. Figure 37 compares the growth rates of income in Talbot County versus home prices from 2000 to 2024. Table 6 shows the percentage increase in income growth and home price growth over the time intervals. From 2000 to 2010, home prices significantly outpaced income growth, resulting in a rapid decline of affordability. This may have been due to the housing boom up until the housing crash that led to the Great Recession. The rate of growth for both income and home prices slowed down during the next decade and income growth slightly outpaced home growth, most likely due to the post recession impacts and the slowdown in the Easton housing market. However, in the most recent period from 2000 to 2024, home price growth has again surpassed income growth which means affordability issues, or a lack of more affordable housing, has again become an issue; like that seen in the decade from 2000 to 2010. Table 6: Percentages of Income Growth versus Home Price Growth, Talbot County Year

2000-2010

2010-2020

2020-2024

Income Growth

26.63%

18.69%

21.20%

Home Price Growth

57.34%

15.12%

32.56%

E.​ Owner-Occupied Vacancy Rates For owner-occupied housing in 2010, the homeowner vacancy rate was 5.2 percent. The extremely low vacancy rate indicates a very tight market that may be reflected by the demand for higher-end housing and a limited supply of more affordable and varied housing types; consistent with the trend of rising home prices. The aging of the population and out-migration of younger adults may have also contributed to the drop in the vacancy rate since 2010; older adults are more likely to be homeowners while younger adults face challenges with entering the homeowner market.

F.​ Rental Market In Easton, 40 percent of occupied households are renters. This number is down five percentage points from 2010. The rental vacancy rate is 5.3 percent, a statistically significant difference than the homeowner vacancy rate of 1.4 percent13 and the rental vacancy rate was 4.8 percent. The rental vacancy rate is on the healthy side of supply and demand (normally considered within a range of 5 to 7 percent) and indicates more unit availability in the market compared to for-sale homes. 13

U.S. Census Bureau. (2023). Comparative Housing Characteristics (ACS 5-Year Estimates Comparison Profiles).

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The recent increase of multi-family residential in the pipeline may help towards balancing the rising price trend of both the homeownership and rental markets given: a) the slower absorption of housing units since 2010, b) the tighter market for homeownership, and c) the tendency towards higher priced homeownership inventory. More multi-family housing units provide alternative options for housing for those households that cannot afford to purchase a home in Easton. They also provide a greater supply of rental units in the market to stabilize or even decrease rents and subsequently affordability for renters. Since 2000, Easton’s median gross rent for occupied rental units has exceeded those of Denton and Cambridge (Figure 38). This consistency demonstrates that Easton has long had a more premium rental market when compared to these other two neighboring communities. The biggest increase in Easton was the period between 2000 and 2010 when median rents increased 74 percent. During this period, 92 percent of the units constructed were single-family detached and attached units. The demand for rental housing, and the limited supply, could have been factors in the large increase in median rent in that decade. While the largest increase occurred between 2000 and 2010, rents continued to rise in the following decade and through 202314. When comparing with the adjacent counties, Easton’s median rent is 94 percent of Talbot County’s but is only 73 percent of Queen Anne’s (Figure 39). When broken down by gross ranges, there are significantly fewer rental options affordable to extremely lower-income households, or those making less than approximately $25,000 per year (Figure 40). The limited availability of housing at this rent includes impacts to those at-risk of homelessness and those in need of “transitional housing”.

14

Median rents increased 18% from 2010 to 2020 and 9% from 2000 to 2023.

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There are a relatively substantial number of units in the $500 - $999 price range, which are affordable to households earning less than approximately $45,000 per year.

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SECTION FOUR: HOUSING AFFORDABILITY A.​ Cost Burdened Households Cost-burdened households are those that spend a disproportionate amount of their income on housing costs15. This financial strain can limit their ability to afford other necessities. Families can be forced to choose between paying their mortgage and paying for other necessities like food, healthcare, transportation, and savings; impacting their overall well-being. A household that spends more than 30 percent of their gross income on housing is considered cost burdened. According to 2023 ACS data, 50 percent of occupied households with a mortgage in Easton spend $2,000 or more on monthly housing costs. However, only 29 percent of these homeowners are considered cost-burdened, meaning they spend more than 30 percent of their income on housing (Figure 41). This suggests a relatively high tolerance for housing costs in Easton. However, this also indicates that housing costs in Easton are relatively high, even for those considered middle-income. A family of four earning $78,452, or 80 percent of Easton's 2024 Area Median Income (AMI), should ideally spend no more than $1,961 per month on housing to avoid being cost burdened. ACA data shows that 62 percent of owner-occupied households making less than $75,000 in income in the last 12 months are cost-burdened compared to 9 percent of households making $75,000 or more. In 2023, 50 percent of renters were cost-burdened compared to 29 percent of homeowners – a significant difference. This disparity highlights the greater affordability challenges faced by renters in Easton, who are more likely to be spending a disproportionate amount of their income on housing. This can have serious implications for financial stability, housing security, and overall well-being. ACA data shows 69 percent of renter

15

The calculation of whether a household is cost-burdened or severely cost-burdened is based on the household's individual gross household income. The data for this calculation comes from the U.S. Census Bureau's American Community Survey, which collects the specific housing cost and income data for millions of individual households.

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households making less than $75,000 in income in the last 12 months are cost burdened. For renter households making less than $50,000 in the last 12 months, the percentage is 83 percent. The cost burden for both renters and owners also generally increases with age (Figures 42 and 43). Older households, especially renters, appear to be particularly vulnerable to housing cost burden. This could be due to fixed incomes, rising healthcare costs, the death of a spouse or significant other, or other financial pressures associated with aging. While cost burden is high across all renter age groups, even younger renters (25-34) are significantly burdened. This could impact their ability to save for a down payment and achieve homeownership, invest in their future, or meet other financial goals. When looking at cost burdened owner and renter households by race, Figures 44 and 45 show significant racial disparities in Easton, with Hispanic households facing the most severe challenges. White homeowners have the lowest cost burden (24%), followed by Black homeowners (44%), with Hispanic homeowners experiencing the highest cost burden (82%). While Hispanic homeowners have the highest overall cost burden, Black homeowners have a higher percentage of those who are severely cost burdened; defined as spending 50 percent or more of their gross income on housing. White renters have the lowest cost burden (43%), followed by Black renters (54%), with Hispanic renters again experiencing the highest cost burden (69%). Hispanic renters also have the highest percentage of those who are severely cost burdened (52%). Black renters also have a high percentage of severely cost burdened households (36%). Across all racial groups, renters experience higher rates of cost burden than owners, further emphasizing the affordability challenges faced by renters in Easton. Hispanic households, both owners and renters, appear to be particularly vulnerable to housing cost burden. This could be due to factors such as lower median incomes, limited access to credit, or language barriers. Black homeowners and renters have higher percentages of severe cost burden, indicating that they not only struggle to afford housing but also face significant financial strain as a result. B.​ Affordable Home Price

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According to the annual Income Limits Summary published by the United States Department of Housing and Urban Development (HUD), the FY 2024 Median Family Income (MFI) for Talbot County is $106,500 for a family of four.16 The County’s MFI is 11 percent higher than the average County MFI for the eastern shore of Maryland (excluding Cecil County) and third highest on the eastern shore, below the counties of Queen Anne’s and Kent. Figure 46 shows the historical growth in Talbot County’s MFI. Since 1990, Talbot County families’ earnings have increased, showing the overall improvement of economic growth for families. The highest decade of growth was between 1990 and 2000 where the County’s MFI grew 65 percent. From 1990 to 2024, the County’s MFI grew 203 percent. Using statutory intent and requirements, HUD calculates income limits based on household size and categorizes these limits as Extremely Low Income, Very Low Income, and Low Income. The Summary Table for Talbot County income limits are listed in Table 7 below. The income limits and household sizes based on the MFI are then used by HUD to determine eligibility for assisted housing programs including Public Housing; Section 8 project-based; Section 8 Housing Choice Voucher; Section 202 housing for the elderly; and Section 811 housing for persons with disabilities programs. It’s important to note that the Easton Affordable Housing Board (Board) uses a formula to adjust Talbot County’s MFI when determining affordability limits for Easton housing programs. This adjustment is done to reflect differences in median income between Easton and Talbot County. For FY 2024, Easton’s adjusted MFI is $98,065. Table 7: HUD FY 2024 Income Limits Summary

16

This number was calculated using the 5-year 2018-2022 American Community Survey MFY estimate ($100,321) with an inflation factor adjustment based on the Congressional Budget office projection of the national Consumer Price Index. The resulting number was then rounded to the nearest $100.

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A four-person family earning 100 percent of the 2024 Talbot County Area Median Income, adjusted for Easton, paying 35 percent of their monthly gross household income for mortgage principal, interest, property taxes, and property insurance (PITI); Private Mortgage Insurance (PMI); and Home Owner Association (HOA) dues, together with a 5 percent down payment (assuming a 6.95% 30-year fixed mortgage rate), can afford a home at a sales price of $277,00017. According to a 2024 ©MarketStats by Showing Time report provided by the Mid-Shore Board of Realtors, the median sold price for an Easton home in 2024 was $450,000. The affordable sales price of $277,000 is 38 percent lower than the 2024 median sales price. Table 8 also shows that even the average sold price for an attached home, such as a townhome, exceeded the maximum affordable price for a family of four earning 100 percent of Easton’s AMI by 21 percent. To afford a home valued at $420,000, a four-person household would need to earn 140 percent of Easton AMI, or approximately $137,000 in annual income. Table 8: Easton Maximum Affordable Sales Price vs. Median and Average Sold Price Maximum Affordable Sales Price (Family of Four @ 100% AMI

Median Sold Price

Average Sold Price

Average Attached Sold Price

Average Detached Sold Price

$277,000

$450,000

$736,186

$350,499

$811,964

C.​ Affordable Rental Price HUD also calculates Fair Market Rents (FMRs) to determine payment standard amounts for various housing rental programs including the Housing Choice Voucher Program. For Talbot County, the FMRs are calculated starting with a base rent using the average of 2018-2022 ACS estimates, multiplied by adjustment factors to determine the FY 25 FMR. This number is then adjusted if it falls below the Maryland state minimum and then calculates bedroom ratios and multiplies these by the adjusted two-bedroom rent to produce FMRs for unit sizes other than two bedrooms. The FMRs for unit sizes based on the number of bedrooms is listed in Table 9 below. Table 9: FY 2025 FMRs by Unit Bedrooms

FY 2025 FMR

Efficiency

One-Bedroom

Two-Bedroom

Three-Bedroom

Four-Bedroom

$1,210

$1,257

$1,392

$1,951

$2,338

A renter household is cost-burdened if they pay more than 30 percent of their gross income on rent. For renters paying 30 percent of their monthly gross income on rent, net of an assumed monthly utility allowance of $100, a household of four earning 60 percent of Easton’s AMI ($58,839) can afford a rent of about $1,371 for a three bedroom apartment.

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HOA and property insurance fees are each assumed at $200 per month. Real property taxes are calculated with a factor of 1.29 per $100 based on an assessed value of $419,647, which is a 3-year trailing average of the ZHVI. PMI is based on a credit score in the 660 - 679 range at 1.23% of the loan amount annually. The interest rate is based on the Freddie Mac Priority Mortgage Market Survey U.S. weekly averages for a 30-yr FRM as of 2/01/2025.

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Zumper reports that the average monthly rent as of March 2025 for a three-bedroom rental is $2,400, which is 10 percent higher than the previous year in Easton. 75 percent of rents range from $1,501 to $3,00018. The median rent for a two-bedroom is $2,499. For all bedroom counts, the median monthly rent is $2,549, which is 27 percent higher than the national average. For apartments, the average rent price is $2,69919. The average monthly rent for a 2-bedroom apartment is $2,044. Table 10 below shows that a family of four making 60 percent of Easton’s AMI cannot afford to rent a one, two, or three bedroom apartment in Easton without being cost burdened. To afford a median monthly rent of $2,525, a household will need to earn at least 110 percent of Easton’s AMI without being cost-burdened. Table 10: Easton Maximum Affordable Rental Price vs. Median and Average Rental Price Maximum Affordable Rental Price (Family of Four @ 60% AMI)

Median Rental Price

Median Rental Price 2-Bedroom

Median Rental Price 3-Bedroom

Average Rental Price - Apartment

$1,471

$2,549

$2,499

$2,400

$2,674

18 19

Median rent and rent ranges are based on Zumper inventory in the last 30 days. The average excludes rentals for rooms, condos, and homes.

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SECTION 5: EXCLUSIONARY ZONING Some existing zoning regulations limit the types of housing and land uses within a specific area. This is often achieved through regulations like minimum lot and building sizes, restrictions on multi-family housing, building height limitations, all of which can increase housing costs and reduce the affordability of housing. However, the unintended effect is the exclusion of certain demographics, particularly lower-income individuals and families, from those areas. Zoning can inadvertently shape the types of housing available and potentially impact affordability and community diversity. There are virtually no opportunities for more affordable housing in the unincorporated areas of Talbot County. The County’s comprehensive plan places high value on the protection of the shoreline, waterway, and agricultural lands, equally important goals as affordable housing. The County’s plan to accomplish this is twofold: restrict the extension of sewer outside of development and growth areas that surround the towns and to take a restrictive and exclusionary approach toward the use of land over which it has zoning authority. To implement these objectives, the County’s zoning regulations prohibit all housing types except primarily single-family detached housing, which limits housing options. The zoning districts are characterized as very low density, further augmented by low maximum height restrictions. The bulk requirements for each lot include large minimum lot sizes and low maximum lot coverage requirements, which makes real estate more scarce and increases construction costs and land prices. The end effect is housing segregation due to the cost of land and development supporting only new higher-end housing in the unincorporated areas of Talbot County. And as the graphics show below, housing segregation is the door to other types of segregation (see Figures 47, 48, and 49 below).

Figure 47: Talbot County Median Value of Owner-Occupied Housing Units in 2020 by Census Tract

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Figure 48: Talbot County Black Population by Census Tract

Figure 49: Talbot County Hispanic Population by Census Tract

As for the remaining towns outside of Easton, there are extremely limited areas for future growth and development adjacent to Oxford and St. Michaels. While Lakeside at Trappe, the new development in the Town of Trappe, will eventually provide approximately 2,500 homes, the approval of the Planned Unit Development by the Town of Trappe did not require any proffers for affordable or workforce housing.

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SECTION 6: KEY INSIGHTS FROM THE COMPREHENSIVE PLAN UPDATE AND HOUSING SURVEY A.​ Affordable Housing in the Comprehensive Plan Easton’s 2010 Comprehensive Plan (Plan) notes that in recent years, Easton has experienced a significant absence of affordable housing, especially in the “entry-level” market as well as the “move-up” market. Compounding the problem is the trend of only providing higher end, segregated housing with recent development that can lead to the situation where nearly all of the service and labor employees have to commute into easton from places where they can afford to live (Town of Easton 2010 Comprehensive Plan, Community Character, Pages 107-108). The Plan also notes that Inclusionary Zoning is a tool to require all residential developments of a minimum size to include a certain percentage of units as affordable. The intention is to provide a more predictable and consistent method for obtaining affordable units than the case-by-case imposition of conditions of approval by the Town Council for projects subject to their approval (Town of Easton 2010 Comprehensive Plan, Housing, Pages 137-138). As such, one objective in the Plan is to institute Inclusionary Zoning whereby all residential developments will be required to provide a minimum number of units at various price points. The goal is to increase the supply of affordable housing in Easton (Town of Easton 2010 Comprehensive Plan, Housing, Page 141). Other specific Housing Goals and Objectives included in the Plan include: ● Establish design standards and require physical distribution of different housing types to provide both visual interest and a smooth blend of affordable housing in the community ● Provide sufficient density to create a sense of place, use infrastructure efficiently, and create pedestrian‐friendly, transit-supportive neighborhoods ● Increase the supply of low‐income housing in Easton by supporting the efforts of the Talbot Housing Authority to provide more home-ownership and rental opportunities for low-income individuals and families B.​ Talbot County Smart Growth Survey The lack of affordable housing is a concern to County residents. American Strategies, sponsored by the National Association of Realtors with support provided by the Mid-Shore Board of Realtors, designed and administered a telephone survey in June of 2022. The survey reached 325 adults, age 18 or older, who indicated they were registered to vote in Talbot County, Maryland (see Attachment 2 for a summary of their survey results). The results of the survey indicated that residents are satisfied with their quality of life and they value the historic nature of Talbot’s towns and villages and its natural resources, but they understand the need for additional housing – and in particular for more affordable housing for young people and those with lower incomes. Specific highlights are below: ●​ Residents are concerned about the County’s affordable housing, where 51 percent say “creating more housing that is affordable to low and middle-income people” is a top priority

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●​ A majority of Talbot residents consider the county’s stock of available housing to be a “fairly big” or “very big” problem (60%).” Similarly, 66 percent consider housing affordability to be a problem in the county ●​ Looking at specific sectors of Talbot’s housing market, 68 percent of residents believe there is too little housing for people with low incomes and for younger people who are just starting their careers. 60 percent also believe there to be too little housing for people who work in retail and service jobs, with the same number saying there are too few units available to rent full-time ●​ Talbot County residents are broadly supportive of government-led proposals to increase housing opportunities for the county ○​ 67 percent percent of residents favor a proposal that requires developers to set aside sub-market rate housing for new projects and 62 percent favor providing tax breaks to developers who do so ○​ Slightly smaller majorities are favorable toward proposals that change zoning laws to ease the process of building multi-family units (57%), and proposals that reduce government fees and regulatory barriers for builders (56%) C.​ Talbot County Chamber of Commerce Affordable Housing Business Impact Survey Results At the Attainable Housing Task Force’s June 27, 2024 meeting, the Talbot County Chamber of Commerce presented the results of their Affordable Housing Business Impact Survey. Of the forty businesses that participated in the survey, 85 percent felt that Easton has a lack of affordable housing and nearly an equal amount (83%) believed that improving the availability of affordable housing in Easton would benefit their businesses. Approximately 53 percent of the businesses indicated the lack of affordable housing impacted their ability to attract and retain employees due to employees commuting long distances (81%), difficulty with filling positions (69%), increased wage demands (46%), and high employee turnover (19%). Thirty three percent of businesses had employees leave the company within the past year due to housing-related issues. Thirty seven of the forty respondents indicated that high rent and mortgage costs (95%), a lack of housing options (84%), long commute times (49%), and poor housing conditions (25%) were specific challenges that were reported by their employees. However, only ten percent of businesses reported that they offered housing assistance, such as stipends or relocation assistance, to their employees. Seventy eight percent of the businesses indicated they would support initiatives aimed at increasing affordable housing in Easton, including: ●​ Tax incentives for affordable housing development (85%) ●​ Public-private partnerships for housing projects (70%) ●​ Zoning changes to allow for more housing (58%) ●​ Subsidized housing (42%)

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Appendix 2: Easton Residential Pipeline Table

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Appendix 3: Method of Calculation for the Maximum Affordable Sales Price

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Appendix 4: Inclusionary Zoning Draft Ordinance, September 13, 2024 Section 1601 ​

​Purpose.

The purpose of this Article is to promote the public health, safety, and general welfare by promoting housing of high quality, located in neighborhoods throughout the community, for households of all incomes, ages, and sizes, in order to promote a culturally and economically diverse population in the Town. Based upon the review and consideration of the Town’s officially adopted Comprehensive Plan (2010) as well as subsequent reports and analyses of the housing situation in the Town of Easton, it is apparent that the diversity of the Town’s housing stock has declined as a result of rapidly increasing property values and housing costs and a reduction in the availability of housing choices. In light of this situation, the Easton Town Council makes the following findings:

1. It is a legitimate public purpose of the Town to achieve a diverse and balanced community with housing available for households of all income levels. Economic diversity fosters social and environmental conditions that protect and enhance the social fabric of the Town and are beneficial to the health, safety, and general welfare of its residents. 2. The Town is experiencing an increasing shortage of Affordable Housing due in part to the high cost of newly constructed housing. As a result, much of the workforce is excluded from many new neighborhoods, live in overcrowded or substandard housing, and devote an inordinately large percentage of their incomes to pay for housing. 3. In the legitimate pursuit of other worthy and valid goals relative to growth management, redevelopment, and resource protection, the amount of land available for residential development in the Town of Easton is limited, thereby exacerbating the housing supply and affordability problem. 4. The Town recognizes the need to provide Affordable Housing in order to maintain a diverse population and provide housing for those who live or work in the Town and Talbot County. 5. Without intervention, the increasing housing prices is resulting in an inadequate supply of affordable housing for residents and employees, which will have a negative impact upon the ability of the Town to attract new employers; to maintain an adequate work force to retain and expand existing employers; to guarantee the public health, safety, and general welfare of the Town and its residents.

6. The remaining land available and appropriate for new residential development within the Town is limited. It is essential that a reasonable proportion of such land be developed into housing units affordable to households and working families. 7. ​ While this Article provides specific alternatives to the production of on-site inclusionary units, the intent and preference of this Article is for the provision of inclusionary units constructed on-site and privately produced, owned, and managed. 73

Section 1602

​

Definitions.

1. Adaptive Reuse: Repurposing of an existing building(s) or structures, often obsolete or historic, for any use(s) other than the present use(s). 2. Affordability Gap: The entire amount of capital required to develop affordable housing for prototypical renter and owner housing types appropriate to the Easton residential development market. The Affordability Gap is based on an Affordability Gap Analysis following industry best practice in the Gap methodology. 3. Affordable Housing Fund: The fund established in Article I of Chapter 13 of the Code of the Town of Easton. 4. Affordable Home Price: The maximum amount of a mortgage loan that could be obtained based on the monthly affordable mortgage payment that equals 95% of the Affordable Home Price; the homebuyer must provide a 5% down payment from their own funds.

5. Affordable Mortgage: The Affordable Mortgage at the then prevailing 30-year, fixed rate mortgage as published weekly by the Freddie Mac Priority Mortgage Survey, U.S. weekly averages (or successor).

6. Affordable Owner Expense: Housing cost that does not exceed one-twelfth of 35% of 100% of the Easton Area Median Income, adjusted for household size to include Principal and Interest, Taxes, and Property Insurance (PITI); Private Mortgage Insurance (PMI); and Homeowner Association dues. 7. Affordable Renter Housing Expense: Rent that is one-twelfth of 30% of 60% of the Easton Area Median Income, adjusted for household size, and net of utility allowance. 8. Applicant or Developer: A person, persons or entity that applies for a residential development and also includes the owner or owners of the property if the applicant does not own the property on which residential development is proposed. 9. Area Median Income (AMI): An annual estimate calculated and annually published by HUD for Talbot County. The basis for HUD’s AMI is data from the American Community Survey for Talbot County, as used for the HOME and LIHTC programs. The current year AMI is adjusted by the Easton Affordable Housing Board based on Easton’s median income. 10. Cash In Lieu Fee: A per-unit fee based on a per square foot basis for the fractional portion of for-sale and rental Inclusionary Units.

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Cash In lieu Fees are initially established by the Town Council, upon recommendation by the Easton Affordable Housing Board, and are set at a level comparable to the Affordability Gap. The Cash In Lieu Fees shall be updated by the Easton Affordable Housing Board on an annual basis based on the trailing three-year average annual change in median household income (for the renter fee schedule) and the All Transactions House Price Index for Talbot County published by the U.S. Federal Housing Finance Agency (for the owner fee schedule). Cash In Lieu Fees may also include estimated costs of administration. 11. Continued Affordability: The time during which an inclusionary unit is subject to rental price controls and owner occupancy and resale requirements. 12. Covered Project: Any project meeting the criteria of this section shall be deemed a covered project. A covered project is subject to a Town of Easton Housing Inclusionary Housing Plan and Inclusionary Housing Agreement. 13. Density Bonus: Dwelling units approved in a residential development that are in excess of the maximum allowable residential density otherwise permitted by the Town of Easton. 14. Inclusionary Housing Agreement: An agreement between the Town of Easton and an applicant governing how the applicant shall comply with this Chapter. 15. Inclusionary Housing Guidelines: Any requirements for implementation and administration of this Chapter, recommended by the Easton Affordable Housing Board and adopted by the Town Council. Adopted Inclusionary Housing Guidelines may include, but not be limited to, standards for determining household composition; income eligibility and prices for sale and rental of Inclusionary Units; income limit schedules; inclusionary housing costs; design guidelines; provisions of continued monitoring of tenant eligibility; and document templates. Guidelines may also specify the contents of the Inclusionary Housing Plan and are updated on a regular basis. 16. Inclusionary Housing Plan: A plan containing all of the information specified in this Chapter, and includes the manner in which Inclusionary Units will be provided in conformance with this Chapter and any adopted Inclusionary Housing Guidelines. 17. Inclusionary Unit: A dwelling unit required by this Chapter to be affordable to households as specified in the Ordinance and subject to recorded affordability restrictions. 18. Market Rate Housing: Housing that already exists or is part of a proposed development that is based on existing area market values and demand and is not an Inclusionary Unit. Families making above 100% of the Area Median Income qualify for Market Rate Housing. 19. Ownership Residential Development: Any development that includes the creation of one or more residential dwelling units that may be sold individually.

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20. Priority Preference: Priority preference for the sale or rental of units is given to persons who live or work in the Town of Easton or as otherwise determined by the Town Council. 21. Qualified Housing Organization: A public housing authority, a for-profit company, or a non-profit organization whose mission includes the purpose of providing Affordable Housing. 22. Rental Residential Development: Any development that creates one or more residential dwelling units that are not lawfully sold. 23. Residential Development: Any development that includes residential units for which a development site plan, preliminary plat subdivision, or building permit is required that includes: (a)

The creation of one or more dwelling units;

(b)

The substantial rehabilitation of one or more dwelling units;

(c)

The creation of dwelling units through adaptive reuse; or

(d)

The conversion of non-residential uses to dwelling units.

24. Substantial Rehabilitation: Any reconstruction, rehabilitation, addition, or other improvement of a structure, the cost of which equals or exceeds 50% of the structure's current appraised value before the improvement's start of construction. ​

Section 1603

​

Intent.

The intent of these regulations is: 1. To provide Affordable Housing opportunities and choices for all of Easton’s citizens; 2. To mitigate the impact of market rate housing construction on the limited supply of available land suitable for Affordable Housing, thus excluding housing that meets the needs of all economic groups within the Town; and 3. To prevent overcrowding and deterioration of the limited supply of Affordable Housing, and thereby promoting the public health, safety and general welfare of the Town and its residents. 4.

To promote the integration of Affordable Housing with Market Rate Housing.

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Section 1604

​

Authority.

These regulations are enacted under the authority of Section 7-401 of the Land Use Article of the Annotated Code of Maryland.

Section 1605 ​ Applicability. 1. Except as otherwise provided in this Chapter, these regulations shall apply to all residential development on a site, or portion thereof, at one location which is the subject of an application for a development site plan, preliminary plat subdivision, or building permit, whichever comes first. 2. Any revision or modification to an approved Final Site Plan, Final Plat, or Building Permit that would increase the number of residential units are subject to the requirements of this Chapter.

Section 1606 ​ Exemptions. 1. This Chapter does not apply to a development that sets aside affordable dwelling units in accordance with Section 42 of the Federal Internal Revenue Code, pursuant to which a restricted covenant is to be recorded in the land records of Talbot County setting forth income limitations of tenants in accordance with the Federal Low Income Housing Tax Credit (LIHTC) Program in favor of the Maryland Department of Housing and Community Development or a subsidiary thereof or other governmental entity responsible for administration of the LIHTC Program. This exemption does not apply to market rate residential developments using LIHTC program financing that do not provide more affordable units or deeper levels of affordability than the minimum thresholds required for LIHTC affordability. 2. A development is exempt from the requirements of this Chapter if, before [insert date], the project has received approval for the earliest of a development site plan, preliminary plat, or building permit. 3.

Accessory Dwelling Units are exempt from the provisions of this Chapter.

Section 1607 ​ Inclusionary Housing Requirements. 1. Residential developments, including new construction, substantial rehabilitation of existing structures, adaptive reuse, conversion of all or a portion of a nonresidential use to residential use, and condominium and cooperative conversions of rental housing, shall provide 15% of the dwelling units in the residential development as Inclusionary Units upon the same site as the residential development as follows:

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(a) Ownership Residential Development. The applicant shall provide Inclusionary Units in the residential development at an Affordable Home Price to households up to 100% of AMI, adjusted for household size. (b) Rental Residential Development. The applicant shall provide Inclusionary Units in the residential development at an Affordable Renter Housing Expense to households making up to 60% of AMI, adjusted for household size. 2. In the event the required Inclusionary Units result in a fraction that does not evenly divide by the percentages required above, a Cash In Lieu Fee shall be paid for the required fractional portion. 3. Calculations of the number of Inclusionary Units required by this section shall be based on the number of dwelling units in the residential development, excluding any Density Bonuses. 4. When a residential development includes both ownership and rental dwelling units, the provisions of this Chapter that apply to Ownership Residential Development shall apply to that portion of the development that consists of ownership dwelling units, while the provisions of this Chapter that apply to Rental Residential Development shall apply to that portion of the development that consists of rental dwelling units. 5. Multiple developments or projects by the same applicant or responsible party within any consecutive twenty-four (24) month period that in the aggregate equal or exceed the above criteria shall be subject to these regulations. 6. An applicant for a development site plan, preliminary plat subdivision, or building permit shall not avoid the requirements of this chapter by submitting piecemeal applications. At the time of the application for first approval for the residential development, the applicant shall identify all contiguous property under common ownership and control. The applicant shall not be required to construct dwelling units upon the contiguous property at the time of the application for first approval; however, the applicant shall be required to include the contiguous property under common ownership or control in its Inclusionary Housing Plan. The Inclusionary Housing Agreement shall be recorded against the residential development and all contiguous property under common ownership or control. The agreement shall require compliance with this Chapter upon development of each contiguous property at such time as there are applications that would authorize residential units through new construction and/or substantial rehabilitation of existing structures, or through adaptive reuse or conversion of a nonresidential use to residential use, for both the residential development and the contiguous property under common ownership or control. 7. An applicant shall not be exempt from the requirements by submitting phased applications for the residential development. Occupancy permits for no more than fifty percent (50%) of the market rate units shall be issued prior to the issuance of occupancy permits for fifty percent (50%) of the Inclusionary Units. Occupancy permits for no more than seventy-five percent (75%) of the

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market rate dwelling units shall be issued until occupancy permits have been issued for seventy-five percent (75%) of the Inclusionary Units for the residential development. Occupancy permits for no more than ninety percent (90%) of the market rate dwelling units shall be issued until occupancy permits have been issued for one hundred percent (100%) of the Inclusionary Units for the development. 8. The following information shall be submitted with each building permit application for a market rate dwelling unit within the residential development: (a) The total number of dwelling units, market rate units, and Inclusionary Units proposed for the development; (b) The number of occupancy permits already issued for market rate units within the development; (c) The number of occupancy permits already issued for Inclusionary Units within the development; and (d) The lot number or unit number of each Inclusionary Unit for which an occupancy permit has been issued.

Section 1608 ​ Inclusionary Housing Incentives. 1. The developer of a residential development providing all required Inclusionary Units upon the same site as the market-rate units may, at the developer's sole option and concurrently with the submittal of the Inclusionary Housing Plan, may receive a Density Bonus of 20% above the otherwise maximum density allowed in the Town’s zoning districts contained in Easton’s official zoning map. 2. The developer of a residential development providing all required Inclusionary Units upon the same site as the market rate units may receive up to a 20% variance in development standard bulk requirements; lot size, lot frontage, lot coverage, height, and setbacks. The developer may also receive a modification from the required parking standards provided a parking study is provided that demonstrates that based on the number of spaces proposed, on-street parking will not be negatively affected.

Section 1609 ​ Alternative Compliance Options. 1. In the case where Inclusionary Units are provided on-site pursuant to Section 1607 above, the developer shall provide Inclusionary Units at a price or rent approved by the Affordable Housing Board. 2.

Alternatively, the developer may: 79

(a) Build at least one and one-half times the required number of the Inclusionary Units of the residential development off-site within the Town limits of Easton on property either owned by the Town or by partnering with a Qualified Housing Organization to build Inclusionary Units. (b) The developer’s proposal for off-site construction of Inclusionary Units is subject to Town Council review and approval. The Town may grant off-site construction approval if the proposal meets all of the following conditions: 1) Off-site Inclusionary Units comply with a Town-approved Inclusionary Housing Plan and Agreement; 2) A Financing Plan with financial commitments to close on construction financing for the off-site project is submitted to the Town for its advance review and written approval; 3) The off-site location satisfied Town requirements for proximity to schools, jobs, shopping, services, transit, and recreation, is appropriately zoned for the Town-approved off-site location, and is certified free of environmental contamination and other development constraints (such as floodplain, substantial grading, significant on-site or off-site infrastructure costs, etc.); 4)

All entitlements and land development permits have been obtained; and

5) Construction of the off-site Inclusionary Units must occur no later than simultaneously with the first phase of the market rate project. (c) A developer may also fulfill their off-site requirement by purchasing land within the Town of Easton or the Town’s Municipal Growth Areas and donating it to a Qualified Housing Organization or the Town of Easton to build the required number of Inclusionary Units provided the land meets the following requirements: 1) The current appraised value of the proposed site, with existing zoning in place, is a least equivalent to 150% of the full gap for the appropriate renter or owner affordable unit obligation of the market rate project subject to the obligation; 2)

The land is appropriately zoned for the affordable housing development;

3)

The site is buildable;

4)

The site is free of environmental issues;

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5) The land can accommodate the number of affordable units required under the Inclusionary Housing program; 6)

The land is located within the Town or the Town’s Municipal Growth Areas; and

7) The site is close to schools, jobs, shopping, recreation, transit, and suitable for family (or senior) housing. 3. Residential developments that consist of market-rate single-family detached units may provide a different housing type for the inclusionary units such as townhomes or duplexes. 4. When the number of dwelling units proposed through adaptive reuse, or conversion of a nonresidential use to residential use, results in 30 or more units, a developer may propose an alternative compliance method to provide Inclusionary Units through other means consistent with this Chapter and any adopted Inclusionary Housing Guidelines. The Town Council, following a Planning Commission and Affordable Housing Board recommendation, may approve or conditionally approve such an alternative only if the Council determines, based on substantial evidence, that such alternative compliance will provide as many or more Inclusionary Units at the same or lower income levels or will otherwise provide greater public benefit than would the provision of the on-site Inclusionary Units.

Section 1610 ​ Inclusionary Housing Plan and Agreement. 1. An application for the first approval of a residential development shall include an Inclusionary Housing Plan describing how the development will comply with the provisions of this Chapter and the Inclusionary Housing Guidelines. As an alternative to compliance with the basic provisions included in this Chapter, an applicant may propose one of the alternatives listed in Section 1609 of this Chapter as part of the Inclusionary Housing Plan. 2. Any proposed density bonus, variances, modification of parking standards, or other incentives shall be included in the inclusionary housing plan. 3. No application may be deemed complete unless an Inclusionary Housing Plan is submitted. The Inclusionary Housing Plan shall be processed concurrently with the development site plan, preliminary plat, or building permit, whichever occurs first. Before the Town of Easton approves the Inclusionary Housing Plan, the Town must affirmatively find that the Inclusionary Housing Plan conforms to the requirements set forth in this Chapter. The inclusion agreement, described below, shall be recorded prior to the approval of any final site plan, final record plat, or building permit for the residential development, whichever occurs first. 4. The approved Inclusionary Housing Plan for a residential development, or for a building phase in a residential development, where phasing has been approved as part of planning permit approvals, may be amended prior to issuance of any building permit for the residential development

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or building phase, if applicable. A request for a minor modification of an approved Inclusionary Housing Plan may be granted by the Town Manager or their designee if the modification is substantially in compliance with the original Inclusionary Housing Plan and conditions of approval. Other modifications to the Inclusionary Housing Plan shall be processed in the same manner as the original plan. 5. The Inclusionary Housing Plan shall describe the applicant's marketing plan in conformance with Section 1613 below, which shall comply with all applicable fair housing and discrimination laws and shall not discriminate in the sale or rental of inclusionary units on the basis of race, color, religion, sex, familial status, national origin, marital status, sexual orientation, gender identity, disability, or source of income, with the exception of residential developments that comply with the Housing for Older Persons Act. 6. The applicant shall enter into an Inclusionary Housing Agreement with the Town of Easton, in a form approved by the Town Attorney, to be executed by the Mayor or their designee, to ensure that all the requirements of this chapter are satisfied. (a) The Inclusionary Housing Agreement shall be recorded against the residential development prior to approval of any final site plan or final record plat, or issuance of any building permit, whichever occurs first. The agreement shall run with the property for the entire continued affordability period. (b) The Inclusionary Housing Agreement shall specify the number, type, location, size, and phasing of all Inclusionary Units, provisions for income certification and screening of potential purchasers or renters of units, maintenance obligations, and the financing of ongoing administrative and monitoring costs, consistent with the approved Inclusionary Housing Plan and any adopted Inclusionary Housing Guidelines, as determined by the Town Manager or designee. (c) The Inclusionary Housing Agreement shall define rent and sale price increase procedures, and provide formulas for how resale prices for ownership Inclusionary Units are calculated, including the ability for homeowners to capture some or all of the depreciated value of capital improvements they made to the Inclusionary Unit, and for sharing of excess profits after the control period ends. (d) In selecting households for the Inclusionary Units in accordance with this Chapter, the Inclusionary Housing Agreement shall specify preferences that shall be given as described in the Inclusionary Housing Guidelines, if any.

Section 1611

​

Percentage of Affordable Units.

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All covered projects shall meet the percentage requirements for Inclusionary Units as specified in Section 1607. The percentage of Inclusionary units shall be calculated with a base number that excludes any bonus units added to the covered project under Section 1608.

Section 1612 ​ General Standards for Inclusionary Units. 1. In addition to design requirements that may be specified in the Inclusionary Housing Guidelines, all covered projects must comply with the requirements set forth in subparagraphs (a) through (g) below: (a)

On-site Inclusionary Units shall be interspersed among market rate units.

(b) Bedroom count comparability between the market rate units and affordable units shall be provided. The distribution of unit sizes by bedroom count in the market rate units must match that of the affordable units in the project. (c) The following occupancy standards are required by bedroom count for each Affordable unit:

Number of Bedrooms

Occupancy

Studio

1-2 Persons

1 Bedroom

1-2 Persons

2 Bedroom

2-4 Persons

3 Bedroom

3-6 Persons

4 Bedroom

5-8 Persons

(d) On-site Inclusionary Units may differ from the market units in a covered project with regard to interior amenities and gross floor area; provided, that:

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1) These differences, excluding differences related to size differentials, are not apparent in the general exterior appearance of the project's units; and 2) These differences do not include insulation, windows, heating systems, dishwashers, cooking facilities, laundry facilities, and other improvements related to the energy efficiency of the project's units; 3) Inclusionary Units shall have at a minimum builder grade finishes on the interior, including appliances, and a basic landscaping package similar to the package included with market-rate units; and 4) The gross floor area of the Inclusionary Units is not less than the following minimum requirements, unless otherwise recommended in the Inclusionary Housing Guidelines approved by the Easton Town Council.

NUMBER OF BEDROOMS

Minimum SIZE

Studios

600 square feet

One bedroom

850 square feet

Two bedrooms

1,100 square feet

Three bedrooms

1,300 square feet

Four bedrooms

1,500 square feet

(e) ​ The Inclusionary Units shall have the same amenities as the market rate units included within the development, such as access to and enjoyment of common open space, parking, storage, and other facilities in the residential development. (f). ​ Residential developments may choose to use the following alternative standards for the Inclusionary Units:

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1) ​ Unit size reductions, as long as the bedroom count comparability with the market rate units is maintained, and the minimum square footages as specified in Section 1612 are maintained; 2) ​ Reduction by one in the number of bathrooms provided the number of bathrooms provided in market-rate units closely approximates the number of bedrooms; (g) ​ Priority in the sale of on-site Inclusionary Units may be established by criteria specified in the Inclusionary Housing Guidelines; (h) ​ Except for household income limitations as set forth herein, occupancy of any on-site Inclusionary Unit shall not be limited by any conditions that are not otherwise applicable to all units within the covered project; and (i) ​ The final calculations for the number of on-site Inclusionary Units and the initial sales or rental price for these units shall be made prior to the issuance of building permits for the covered project.

Section 1613 ​ For-Sale of Inclusionary Units. 1. The Developer (or designee) is responsible for the screening and qualification of the initial purchaser of a for-sale Inclusionary Unit. The Developer must provide 90 days advance written notice to the Town of Easton and the Easton Affordable Housing Board prior to the initial marketing of the Inclusionary Units for the calculation of the affordable housing cost, as adjusted to an Affordable Sales Price, pursuant to this Chapter and the Inclusionary Housing Guidelines. Final approval of qualified applicants is contingent on approval by the Easton Affordable Housing Board. 2. Every unit shall be first marketed to priority persons, as established by the Easton Affordable Housing Board, for 90 days from the initial marketing period. Following the priority marketing period, a unit may be offered for sale to the general public. 3. The Easton Affordable Housing Board shall establish guidelines for the calculation of the Affordable Sales Price for an Inclusionary Unit within a residential development and the calculation shall be updated yearly thereafter. 4. The purchaser of a for-sale Inclusionary Unit shall execute and consent to the affordability restrictions and other conditions at the settlement of the property. The property shall be sold subject to Covenants in a form approved by the Town Attorney. 5.

The Inclusionary Unit shall be the purchaser’s primary place of residence.

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Section 1614 ​ Rental of Inclusionary Units. 1. The developer, property owner, or property manager is responsible for verifying household income eligibility and for incorporating any applicable priority preference requirements for the selection of households into the screening process. 2. Every unit will be first marketed to priority persons, as established by the Easton Affordable Housing Board, for 90 days from the initial marketing period. Following the priority marketing period, a unit may be offered for sale to the general public. 3. The Easton Affordable Housing Board shall establish guidelines for the calculation of the Affordable Rental Rate for an Inclusionary Unit within a residential development and the calculation shall be updated yearly thereafter. 4. In situations where there are multiple affordability restrictions/income or rent limits set by different funding requirements, the residential development shall adhere to the strictest requirement so it can meet all of the layering restrictions. 5. The maximum Affordable Rental Rates shall be adjusted annually based on the most recently published Household Income Limits by the Easton Housing Affordability Board. The Board shall notify the property owner or property manager of the new rental rates. If the owner chooses to raise rents, the tenant must be given at least a sixty (60) day notice before any rent increase and the opportunity to terminate the lease if the rental amount is unacceptable. This provision does not give the landlord the right to increase the rental amount if the lease provides otherwise. 6. Each residential development containing rental Inclusionary Units shall be subject to an annual compliance process, which shall be specified in the Inclusionary Housing Agreement. 7. Rental Inclusionary Unit tenants will be subject to the same conditions of tenancy as other tenants occupying the same property, except for the requirements provided by this Chapter and terms related to occupancy, income eligibility, annual recertification, limits on rents, and other terms that may be included in the Inclusionary Housing Guidelines.

8.

Section 1615

The initial lease term for the rental Inclusionary Unit shall be for one year.

​

Marketing of Inclusionary Units.

Any applicant developing a covered project shall adhere to the following provisions with respect to the initial offering of Inclusionary Units for sale or rent:

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1. The developer and owner shall be responsible for marketing, renting, and selling of all Inclusionary Units. 2. The developer and owner shall notify the Easton Affordable Housing Board and the Town of Easton of the prospective availability of any Inclusionary Units at the time that the building permit is issued for such units in a covered project. 3. The property owner or property manager shall post each vacant rental Inclusionary Unit as soon as possible but not later than ten (10) days after notice of an impending vacancy and provide advanced notice of the opening to the Easton Affordable Housing Board and the Town of Easton. 4. The developer and owner may assign its options under this section to a Qualified Housing Organization dedicated to the provision of Affordable Housing, in which event it shall notify the Easton Affordable Housing Board and the Town of Easton of the organization to which it has assigned the option. The Qualified Housing Organization shall deal directly with the developer and owner. The Qualified Housing Organization and the organization’s plan for the property shall be subject to approval by the Easton Affordable Housing Board.

Section 1616

​

Continued Affordability Requirements.

All covered projects shall comply with the following provisions to ensure continued affordability of Inclusionary Units provided under this Chapter and required to be continually affordable under Section 1607.

1. Continued Affordability Requirement. All inclusionary rental units shall remain affordable for a period of no less than ninety-nine (99) years commencing from the date of initial occupancy of the units. Ownership residential Inclusionary Units shall remain affordable for a period of no less than thirty (30) years commencing from the date of initial occupancy of the units. The proceeds from the sale of an Ownership residential Inclusionary Unit are limited to, net of the selling costs, the amortization of the first mortgage principal and increase, if any, in the Affordable Resale Price linked to increases in the AMI and adjustments for prevailing 30-year fixed rate mortgage rates at the time of resale. With the sale of an Ownership Inclusionary Unit during the continued affordability period, a new resale restriction period shall be imposed. 2. Deed Restrictions. Provisions to ensure continued affordability of Inclusionary Units shall be embodied in legally binding agreements, covenants, and/or deed restrictions, which shall be prepared by the developer, but which shall not be recorded or filed until reviewed and approved by the Town Attorney with such modifications as it may deem necessary to carry out the purpose of this article. Any adopted Inclusionary Housing Guidelines may include standard documents. 3. Purchase Option. Provisions for continued affordability of Inclusionary Units shall provide that the Easton Affordable Housing Board or its designee shall have an exclusive option to purchase any Inclusionary Unit when it is offered for resale. The purchase option shall be for a 87

period of ninety (30) days from the date on which the Board is notified of the availability of the unit. The purchase price shall be calculated as per the appreciation allowances specified in the deed restrictions and the Inclusionary Housing Agreement. 4. Leasing/Subletting Restrictions. Provisions for continued affordability of Inclusionary Units shall prohibit subletting or leasing of the property. This provision may be waived by the Easton Affordable Housing Board in writing to allow a temporary rental of the Inclusionary Unit for good and sufficient cause under terms that may be specified in the Inclusionary Housing Guidelines.

Section 1617

​

Transfer of Development.

For all approved covered projects that transfer ownership of the approved development, the new owner or developer shall be subject to all sections of this Chapter.

Section 1618

​

Enforcement.

Violations of this article shall be punishable as provided by Article X of this Chapter.

Section 1619 ​ Administration. 1. Approved site plans and/or record final subdivision plats shall identify the specific number and location of each type of unit, by bedroom count, which are to be regulated as Inclusionary Units and a tabulation that demonstrates that the number of units provided satisfies the number of required units. 2. Written documentation and/or plans demonstrating that the affordable housing units are in conformance with Section 1609.1(d) shall be provided to the Office of Permits and Inspections prior to building permit issuance for the Inclusionary Units.

3. The Easton Affordable Housing Board shall monitor activity under this article and shall provide a report no less than every two (2) years to the Town Council, setting forth its findings, conclusions and recommendations for changes that will render the program more effective. The report described above shall be presented to the Town Council at a public meeting.

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Appendix 5: IZ Staff Reports and PC Transmittal Letter

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