Walk through a new building in downtown Bethesda or North Bethesda and you might notice something odd on the price sheet. Most two-bedroom units cluster around one number. A handful sit tens of thousands of dollars lower, sometimes far lower. The county's own MPDU orientation materials use a version of this exact gap as a teaching example: a unit that would sell for around $300,000 on the open market going for about $175,000 instead. Same building, same finishes, wildly different price.
If you ask the leasing agent why, the answer is not "negotiate harder" or "that unit has a flaw." The answer is that you are not eligible to buy it, no matter what you can afford. That unit belongs to Montgomery County's Moderately Priced Dwelling Unit program, and it runs on a completely different set of rules than everything else in the building.
For anyone comparing Montgomery County to Fairfax County or Prince George's County using median price alone, this matters more than it looks. Part of what you are pricing when you shop in Montgomery County is a housing system with a second, government-priced market running underneath the visible one. It shapes what gets built, who can buy it, and how long a discounted price stays discounted. None of that shows up in a median.
The trade that built the program
Montgomery County adopted the MPDU requirement in the early 1970s, and it is widely credited as the first mandatory inclusionary zoning law in the country. The mechanics are simple to state and less simple to live inside. Any private development of 20 or more units must set aside at least 12.5 percent of those units as MPDUs. In planning areas the county designates as high-income, that share rises to 15 percent.
In exchange, the county lets developers build more than base zoning would otherwise allow, up to a 22 percent density bonus. The program's own planning documentation describes the intent plainly: the arrangement is supposed to be revenue neutral for the developer. Extra units, not a discount out of the builder's pocket, are what pay for the affordable units.
That framing is worth sitting with, because it answers a question a lot of buyers never think to ask. If the below-market units aren't a loss for the builder, where does the cost actually land? It gets absorbed into density, land economics, and the pricing of every other unit in that same project. A buyer paying market rate next door isn't getting a discount denied to their MPDU neighbor. In a real sense, the building's overall pricing already accounts for carrying those units. The visible price tag on the market-rate unit is doing more work than it appears to.
Who actually qualifies, and why the lottery matters
Even if you could afford the MPDU price outright, cash isn't the gate. To buy one, you must be a first-time homebuyer, meaning no ownership interest in a home anywhere in the past five years, for every adult in the household. Household income has to fall inside a band the county sets and updates annually, typically each April, with a current income floor of $40,000. You also have to complete three required trainings, an orientation, a first-time buyer class, and an application tutorial, before you can even apply for a Certificate of Eligibility.
From there, buying an MPDU is closer to a lottery than a listing. Eligible households enter a Random Selection Drawing for a specific development, and priority points determine who gets contacted first: one point for living in the county, one for working in the county, up to three more for consecutive years as an approved applicant, for a maximum of five points. If a household passes, the agent moves to the next name on the list. Only after every certificate holder has been offered the unit, and none of them wants it, can the property be marketed to the general public, and even then the buyer restrictions still apply.
The units on the ground right now
The scale of this shows up clearly in projects moving through Montgomery County's pipeline in 2026.
| Development | Location | Total units | MPDU share |
|---|---|---|---|
| Montgomery Pearl | Downtown Bethesda, Pearl Street District | up to 590 | up to 89 units (15%), sketch plan reviewed by the Planning Board in April 2026 |
| NoBE II | North Bethesda, near the Metro station | 268 rental units | 41 MPDUs, with affordability terms running up to 99 years on the rental side; groundbreaking held March 2026 |
| Elms at PSTA | Rockville | not yet finalized | 30% of units designated MPDU, discussed at the March 2026 Planning Board meeting |
| King Farm | Rockville | multi-phase build-out | 350 MPDUs at full build-out |
| Falls Grove | Rockville | multi-phase build-out | more than 200 MPDUs |
The older projects, King Farm and Falls Grove, show what decades of the program add up to inside a single community. The newer ones, Montgomery Pearl and NoBE II, show the requirement is still actively shaping what gets built today, not a relic of a 1970s ordinance nobody enforces anymore.
Why the discount doesn't stay a discount for the buyer who wins it
Winning the lottery doesn't hand a buyer a market-rate asset at a below-market price. It hands them a home wrapped in a covenant, called a control period, that runs 30 years for units first sold after April 2005. During that window, the resale price is capped by a formula: the original price, plus an adjustment for the Consumer Price Index, plus an allowance for approved capital improvements, minus nothing for luxury upgrades or routine maintenance, which the county explicitly disallows from the calculation. Owners also cannot rent the unit out during the control period without written approval, and refinancing requires clearing it with the MPDU office first, because refinancing above the unit's formula value can leave an owner owing more than the home is worth if they later need to sell.
Even after the control period ends, the story isn't over. The first resale at a true market price triggers a shared profit requirement: half of the difference between the market sale price and the formula-adjusted value goes to the county's Housing Initiative Fund, which recycles the money into producing more affordable housing.
None of this makes the MPDU a bad deal. For an income-qualified, first-time buyer, it can be a real and rare path into a county where market-rate ownership has moved out of reach for a lot of household budgets. But it means an MPDU is not a discounted version of the market-rate unit down the hall. It's a different financial instrument that happens to share an address.
Where the program is showing strain in 2026
The county revisits its list of high-income planning areas, the ones facing the steeper 15 percent requirement, every year. For 2026, Dickerson was added to that list, a single census tract with a reported median household income of $213,000. Kemp Mill/Four Corners and Poolesville dropped off.
At the March 2026 Planning Board meeting where these changes were approved, at least one commissioner raised a pointed concern: several of the designated high-income areas see little to no new housing development at all, which means the 15 percent requirement attached to those areas rarely gets triggered in practice. Montgomery Planning staff indicated a follow-up letter to the County Council outlining observations and possible changes to the program was still under review as of that meeting.
That detail matters for anyone using this program as a lens on where affordability is actually landing. The requirement exists on paper across a wide swath of the county, but production concentrates where building is already happening, largely Bethesda/Chevy Chase, North Bethesda, and the Gaithersburg corridor, not necessarily where the income data says it's needed most.
What this means when you're comparing counties
A median price tells you where the middle of the market sits. It says nothing about the fact that a slice of every large new development in Montgomery County is walled off into a separate pricing and eligibility system, one that most buyers touring the building will never be able to access regardless of income or down payment size, because the gate is first-time-buyer status and a lottery, not just money. Montgomery's version of inclusionary zoning is the oldest of its kind in the country and the largest by unit count, with more than 17,000 MPDUs produced as of 2024, and it is the one most likely to show up as a visible price anomaly inside a listing you're already looking at.
If you're weighing Montgomery County against a neighboring market, that anomaly is worth understanding rather than ignoring. It changes how you read a per-square-foot comparison, and it's one more reason the sale price on a listing sheet is a starting point for a conversation, not the whole answer.
A few straight answers
Can I buy an MPDU if I'm not income-qualified but I love the price? No. The unit stays restricted to eligible first-time buyers through the certificate and lottery process regardless of who else is interested or what they can afford.
If I already own a market-rate home in Montgomery County, does the MPDU next to it affect my resale value? Not directly. Your unit is priced and resold under ordinary market conditions. The MPDU's formula-based resale price is a separate track entirely.
Does the City of Rockville run the same rules as the county? Mostly, but not identically. Rockville administers its own MPDU rental program separately from the county's Department of Housing and Community Affairs, and it has made its own adjustments, including a change effective July 1, 2026 that lets existing MPDU renters stay in their unit even if their household income climbs as high as 80 percent of area median income, above the standard 60 percent ceiling.
Montgomery County's pricing story has more moving parts than a portal search will ever show you. If you're comparing this market against Bowie, Upper Marlboro, or anywhere else in the DMV and want someone to walk through what a specific listing's price actually reflects, Brandon Foy is a straightforward place to start that conversation. Let's Get You Started.
