Developer and four others sue Queen Anne's, claiming bias

Builder says board caused project delays, violated federal law

Six years ago, developer John C. Stamato acquired 144 acres in Grasonville with the idea of building houses, setting aside a portion for the middle class. Instead of erecting 218 homes that only a fraction of Marylanders could afford, he later proposed breaking off dozens of those units and listing them for less than $150,000 apiece.

Stamato said he spent hundreds of thousands of dollars playing by the county's development rules to build in a designated growth area.

But when the county's commissioners, under pressure to rein in growth, voted unanimously in May to indefinitely delay access to water and sewer service, he and several supporters had had enough.

Stamato has been joined in the lawsuit by two builders, including Maryland-based Enterprise Homes Inc., an arm of the Rouse-founded organization that supports affordable-housing interests across the United States. Two African-American residents who say they cannot afford to buy a home in Queen Anne's County have also signed on as plaintiffs: a United Methodist minister in Grasonville and a Denton resident who works in Annapolis.

They are seeking unspecified damages and to force the commissioners to reconsider their stance on the project, which abuts a much-disputed parcel that the state and county intend to buy for $5 million and preserve.

Midgett S. Parker Jr., an attorney representing the plaintiffs, said this case speaks to a "lack of political will to provide an adequate supply of affordable housing for the next generation."

Parker noted that while Queen Anne's County passed a 2003 law to require developers of large projects to set aside 10 percent of their units as "moderately priced," not one has been built there.

Among the allegations listed in the 22-page lawsuit, it said that Gene M. Ransom III, one of Queen Anne's County's commissioners, voiced "concern" that the affordable housing would be near his home.

Eric S. Wargotz, president of the board of commissioners, declined to comment last night because he had not seen the lawsuit. Fellow commissioners Courtney M. Billups, Paul L. Gunther, Carol R. Fordonsky and Ransom did not return calls for comment yesterday.

Anti-growth sentiment is high in Queen Anne's, where voters ousted three incumbents last year, and three others in 2002, over the issue. Since 1999, the county has granted no more than 440 permits a year for new homes on vacant lots. That number dropped to 163 in 2005 and 146 in 2006. Based on numbers from the first five months of 2007, the county is on pace to approve 103 permits for such housing.

Legal and housing experts in the state said they were unaware of similar legal action brought elsewhere against a municipality in Maryland and said the plaintiffs' argument is an unusual twist on how federal housing rules are enforced. Government officials typically rely on the rules to bring action against developers who illegally discriminate against prospective homeowners and renters, they said.

"I think it's a fairly novel idea, and it's about time," said Barbara Bezdek, a professor of law at the University of Maryland who has raised such a theory in class.

Housing experts accuse many local governments of dragging their feet on aggressive affordable-housing initiatives, and they expect more cases brought by developers and residents against local governments.

"The sides have flip-flopped," said Anirban Basu, head of the Sage Policy Group, an economic consulting firm in Baltimore. "There was a time that government induced developers to provide more affordably priced, or work force, housing. Today, it is the developer that's pushing on local government to allow for such housing. ... It's the market that's trying to address this public-policy issue, not the government."

According to a study by the National Low Income Housing Coalition, the median price for a home in Queen Anne's County has jumped from $166,900 in 2000 to $353,500 in 2005.

With the median housing price in the Baltimore region more than $310,000, housing advocates argue that the lack of affordable housing is slamming the door on homeownership - or forcing thousands to flee to distant exurbs and make unreasonably long commutes to reach their jobs and see their families.

"Buying a home in Maryland these days is very difficult," said Jonette Hahn, treasurer of the Maryland Affordable Housing Coalition, an advocacy group. "Finding a home for under $200,000 is very hard to do. Most first-time homebuyers are being shut out."

Stamato has planned to build 168 single-family homes and townhouses on 116 acres, with 10 percent, or 17 units, set aside under county rules for moderately priced housing. He donated an additional 28 acres to Enterprise Homes Inc. to build 50 more affordably priced units.

Queen Anne's County designated the parcel as a growth area in 1998 and, until two years ago, it was slated for immediate water and sewer access. But the commissioners voted in 2005 to hold off service for 20 years. They shortened that delay in 2006 to between four and 10 years. They refused to further expedite consideration May 8 - though a $32 million sewage plant opened in Grasonville a week later, according to the complaint.

Just southeast of the parcel is a 270-acre tract that the state and county hope to use as recreational space; the land deal turned contentious because the $5 million purchase price is nearly $1 million more than the average of two appraisals.

Yesterday's lawsuit caught the attention of Carl O. Snowden, director of the Office of Civil Rights for the state attorney general. He said of the county's growth practices: "They aren't opposed to all development. They are opposed to a certain type of development."

The backlash against high-density housing has been severe, as communities contend that such housing stock will further crowd schools and roads and harm the environment. There's also a stigma associated to affordably priced, or work force, housing, advocates say, as established communities worry about how their quality of life and property values will be affected by new residences of less affluence.

"Local governments are controlled by the people who vote them into office," said Hahn. "I think it's a sad reality that property owners don't want to increase the number of low-income people into their communities. There's a fear about the change in demographics. ... We need homes for people at all economic levels."

Even for lawmakers who take a fair-minded approach to allowing affordable housing, Basu said, "it's more tempting for them to embrace anti-growth stances." (baltimoresun.com)