How Entitlements Drive Value in Montgomery County

You know land is worth more when you can build more on it. In Montgomery County, the approvals you secure determine what is possible and what a buyer will pay. If you own an underused property or you are weighing a redevelopment play, understanding entitlements can help you shape density, control design, and lift price. This guide breaks down the process, key metrics, timelines, and a practical framework you can use to estimate value uplift. Let’s dive in.

What entitlements mean in Montgomery County

In this context, entitlements are the legal approvals that change what you can build on a parcel. They include rezoning or a map amendment, site plan approvals, subdivision and record plats, special exceptions or conditional uses, variances, and ministerial permits such as grading and building permits.

Different approvals do different jobs. Zoning districts set allowed uses, Floor Area Ratio, height, and units per acre. Site plans translate those limits into a concrete design and layout. Special exceptions open the door to specific uses or modifications when statutory standards are met.

Several agencies play a role:

• Montgomery County Planning Department administers master plans, sector plans, sketch and site plans, and prepares staff recommendations.
• The Montgomery County Planning Board is the decision-maker for site plans and sketch plans, and recommends rezonings to the County Council.
• The Montgomery County Council adopts master plans and approves zoning map changes.
• The Montgomery County Board of Appeals decides special exceptions and variances.
• The Department of Permitting Services issues building, grading, and stormwater permits and handles inspections.
• MCDOT and the State Highway Administration review traffic and access. Other reviewers can include Environmental Protection, Parks, Historic Preservation, and WSSC for water and sewer.

When do you need each approval? If your target program fits within current zoning, you can often proceed by right to site plan and building permits. If you are seeking more height, units, or uses than zoning allows, you pursue a rezoning that aligns with an adopted master plan or a plan amendment. Site plans are required for most multi-family, commercial, and non-residential projects. Special exceptions apply to certain uses listed as permitted by exception. Variances provide narrow relief from strict standards where you can prove hardship. Subdivision is required when creating new lots.

County programs and overlays also shape outcomes. The MPDU program affects unit mix and economics in many multi-unit projects. Forest conservation and tree canopy rules can reduce buildable area or require mitigation. Stormwater requirements influence layout and cost. Adequate Public Facilities and school and road staging policies affect timing or conditions. Historic and environmental overlays can limit design and density.

How approvals change density, design, and price

Density levers

Rezoning or site plan amendments can increase allowable FAR, units per acre, or height. That directly raises sellable or rentable square footage. It can also change the product mix, such as introducing townhomes on a site currently used as a single-family property.

Design and unit mix

Site plans set building placement, unit sizes, parking layout, open space, and streetscape. These choices influence construction cost and marketability. Parking strategy, open space design, and step-backs can be the difference between a feasible plan and a stalled one.

Price and value

Entitlements shift the highest and best use. The impact shows up as higher residual land value for for-sale product or higher stabilized NOI for rentals. A previously underperforming parcel can become a multi-family or mixed-use site with materially higher land value per acre.

A helpful way to think about it:

• Post-entitlement land value is approximately the allowed units multiplied by expected price per unit minus hard costs, parking and infrastructure, entitlement and soft costs, developer profit, and carrying costs.
• Entitlement value uplift is the difference between post-entitlement land value and the pre-entitlement land value.

Key metrics to track in your model

• Floor Area Ratio to set total buildable gross square footage.
• Units per acre or unit yield to drive pro formas that are unit based.
• Height limits and step-backs to determine story counts and structural systems.
• Parking requirements and shared parking options to reduce land take and cost per unit.
• Setbacks, lot coverage, and open space requirements to define the core footprint.
• Impact fees, MPDU obligations, and off-site mitigation to quantify direct reductions to returns.
• Time to entitlement and carrying costs to capture taxes, interest, and discounting over months or years.

A simple framework to estimate uplift

1. Define your proposed program. Set target units or FAR, unit mix, and parking approach, and select the product type such as for-sale condo, townhome, or rental.
2. Confirm by-right zoning and master plan guidance. Decide if you need a rezoning or a plan amendment.
3. Establish baseline buildable area. Apply setbacks, buffers, and rights-of-way to find net developable area.
4. Model gross development value. For for-sale projects, multiply units by expected price per unit or price per square foot. For rentals, estimate stabilized NOI based on rents, vacancy, expenses, and a cap rate.
5. Estimate development costs. Include hard costs by product type, parking by space and type, soft costs such as entitlement and financing, and infrastructure or mitigation costs.
6. Apply developer profit and carrying costs. Treat time as a real expense.
7. Compute residual land value. Subtract total costs and profit from GDV, then compare to today’s land value to see potential uplift.
8. Run sensitivities. Adjust key assumptions by plus or minus 10 to 20 percent to see where feasibility breaks.

Montgomery County factors that move the needle

• MPDU requirements influence unit mix and revenue and can be met on site, off-site, or with fees where permitted.
• Parking near transit corridors may be reduced, which can lower costs materially.
• Forest conservation and stream buffers can shrink the buildable envelope or trigger off-site mitigation.
• School adequacy reviews can affect the timing of residential projects in certain areas.
• Regulatory conditions tied to rezonings and site plans may require land dedication, public realm improvements, or infrastructure upgrades.
• Approval probability and timeline reduce value when risk and carrying costs grow.

Typical workflows, timelines, and costs

Common workflow

• Initial feasibility and due diligence for zoning, constraints, utilities, and market demand.
• Pre-application meetings with Planning staff, MCDOT, and early community outreach.
• Rezoning, if needed, including staff review, Planning Board recommendation, and County Council action.
• Sketch or preliminary concepts for major projects, then formal site plan submission.
• Special exception or variance filings with the Board of Appeals when applicable.
• Subdivision and record plat if creating new lots.
• DPS reviews for grading, stormwater management, building permits, and inspections.
• Construction and certificate of occupancy.

Time ranges to plan for

• Pre-application and concept: 1 to 6 months.
• Rezoning: often 12 to 24 months for complex or contested cases, shorter if consistent with an adopted plan.
• Site plan review: commonly 6 to 12 months, longer for complex iterations.
• Special exception: several months to a year depending on hearings and appeals.
• Permitting: a few months to more than a year based on complexity and completeness.

Cost categories to budget

• Soft costs such as land-use attorneys, planners, civil and traffic engineers, and environmental consultants.
• Application fees for rezoning, site plan, subdivision, and Board of Appeals filings.
• Technical studies including traffic, geotechnical, environmental, stormwater, and tree surveys.
• Mitigation and public improvements including off-site infrastructure, utility upgrades, and MPDU obligations where applicable.
• Community negotiations for design upgrades or public benefits.
• Carrying costs including taxes, interest, insurance, and site security during entitlement.

Risks that add time or cost

• Public opposition and political risk that lead to redesigns or added benefits.
• Environmental constraints such as steep slopes, wetlands, forest patches, or contamination.
• Utility capacity limits that require off-site upgrades.
• Complex MPDU, school impact, or traffic mitigation conditions.
• Appeals to the Planning Board, Board of Appeals, or Circuit Court.

Quick screening checklist for your site

• What is the current zoning and the maximum FAR, units per acre, and height allowed?
• Is the site in a master or sector plan area with policies that support added density such as a transit corridor or town center?
• Are there environmental constraints including streams, floodplain, wetlands, or slopes greater than 25 percent?
• Do critical utilities exist on site, or are off-site hookups required?
• Is the parcel within a historic district or near protected resources?
• Is SHA review likely due to frontage on a state road?
• Are there active community groups that could oppose density increases?
• What MPDU requirements apply, and how will they affect unit counts and revenue?
• Are there recent local comps for entitled and unentitled land you can use to benchmark pricing?

Strategy, exits, and negotiation

Entitlement strategy should match your exit. Fully entitled sites with clear site plan approvals appeal to a wider buyer pool that includes builders, institutional developers, and partners. You can sell after approvals, joint venture, or proceed to build and market the finished product.

Partial entitlements, such as a site plan with conditions outstanding or a rezoning without full technical clearance, still reduce risk compared to raw land but may trade at a discount to fully entitled sites. In many cases, a modest and fast approval can beat a high-potential but slow and uncertain rezoning.

Expect public benefit concessions and mitigation to affect returns. MPDUs, open space, and infrastructure items should be included in your residual valuation. Choices like structured parking and building type can rescue a marginal deal by improving feasibility and buyer appeal.

What to assemble before you spend big

• Current deed and title, including easements and covenants.
• The county zoning map and text for the parcel.
• Recent tax assessment and current use summary.
• A Phase I environmental site assessment.
• A topographic survey and tree or forest survey, with wetlands delineation if suspected.
• Utility capacity letters from WSSC and relevant gas and electric providers.
• A preliminary market study or recent sale and lease comps.

When the path points to rezoning or a special exception, engage a zoning attorney or planner early. Civil, traffic, and forest consultants can help identify mitigation during the first site pass. A local broker with redevelopment experience can validate demand and exit pricing.

How Broad Branch Partners helps

You get the most value when approvals, design, and exit work together. Broad Branch Partners operates as a developer-led advisor and broker so you can pursue feasibility, secure entitlements, and sell through premium channels in one integrated process. We invest in the pre-development work that de-risks the deal, then package and market the result to the right buyer pool.

If you are considering a disposition, assemblage, or redevelopment in Montgomery County, we can help you model uplift, manage approvals, and structure exits that capture the premium. Ready to see what your site could be? Reach out to Shane Crowley to unlock your property’s highest and best use.

FAQs

What are entitlements in Montgomery County real estate?

• Entitlements are the approvals that set what can be built on your parcel, including rezoning, site plans, special exceptions, variances, subdivision, and permits.

How do entitlements increase land value for owners?

• By raising allowable density or improving design, entitlements increase gross development value and reduce risk, which lifts residual land value or stabilized NOI.

When do I need a rezoning instead of building by right?

• You need a rezoning when your intended use, height, or density exceeds what current zoning allows or when a master plan change is required.

What timelines should investors expect for approvals?

• Plan for months to years depending on scope, with rezoning often 12 to 24 months and site plans 6 to 12 months, plus permitting and possible appeals.

How do MPDUs affect project feasibility in Montgomery County?

• MPDU obligations influence unit mix, pricing, and costs and must be built into pro formas, whether units are provided on site, off-site, or via fees where permitted.

Which agencies review my project besides the Planning Board?

• DPS for permits and inspections, MCDOT and SHA for transportation, Environmental Protection, Parks, Historic Preservation, and WSSC for utilities depending on site conditions.