‘Historic’ rent stabilization measures signed into law

by Judith Hruz

Editor

Janet Anderson moved to Montgomery County to be close to her aging parents.

She was looking forward to living near her mother and father, always liked the county from her many trips here to visit her parents and heard a lot of good things about the Olney area. She found a job – easily — and expected to find a place to live just as fast.

That did not happen.

“Although I make a somewhat decent salary — not a tremendous amount, but very livable where I came from — I’m having trouble affording a place to live,” Anderson said. “If I sign a lease, I will have very little left over for other expenses. And if I did find a place, if I got one increase in my rent, it would be impossible for me to make it.”

“The excitement of my move is gone.”

Montgomery County officials are hoping new regulations signed into law by County Executive Marc Elrich on July 24 will help residents like Anderson.

The Montgomery County Council on July 28 voted 7-4 to enact Bill 15-23, Rent Stabilization, which establishes maximum allowable rent increases to the lesser of the local annual Consumer Price Index for All Urban Consumers (CPI-U) plus 3 percent, or 6 percent of the base rent.

The legislation, sponsored by Councilmembers Natali Fani-González (D-Dist. 6) and Sidney Katz (D-Dist. 3), takes a balanced approach by stabilizing rents in Montgomery County, according to a council press release, while also ensuring landlords can earn a fair return on their investment.

The legislation exempts newly built units for 23 years. The county needs to build 31,000 housing units by 2030.

“Everyone should have a safe, stable place to call home regardless of how much money they make,” said Fani-González. “I’m proud to live in a county that cares for families and our entire workforce, not only with words, but with legislation that protects the most economically vulnerable to work and live in Montgomery County.”

She called the debate on the legislation “fierce,” but said her approach “was to bring people together to pass a meaningful and workable solution. We have done just that.”

Katz added, “Rent stabilization is a complex and emotionally charged issue, balancing the needs of our tenants in providing stable housing protection while allowing landlords the flexibility to invest and enhance in their properties within the county,” he said. “I am pleased the council found the right compromise and path forward to enact this bill.”

Elrich, who calls the legislation “historic,” had said he would sign the bill into law as soon as it reached his desk, and he did.

“This is a win for the over 35 percent of Montgomery County residents who are renters and for stable communities,” he said. “For tenants and their landlords, there is much needed certainty and clarity, while still ensuring landlords earn a fair return and make necessary repairs.”

During a weekly press briefing the day after the council passed the bill, Elrich expressed his excitement over the bill.

He said higher increases in rent would displace many residents, most of whom make salaries that are too low for the housing market, but too high to qualify for Moderately Priced Housing Units (MPDU’s), a decades-old program that requires developers of new housing to set aside a certain percentage of units for residents with lower incomes.

He added that the new legislation is now just about housing, but about stability, as well.

Moving from place to place to find lower rent is not good for children, who lose connections with schools, teachers and friends.

Elrich explained that if someone found a one-bedroom apartment for $2,500 per month, that would result in $30,000 per year for rent.

Using recommendations from financial advisors, who often suggest spending one-third of an annual salary on housing costs, a person would have to make $100,000.

And that is difficult to do for many people.

In a statement released after the council passed the bill, Elrich said the legislation ensures that “landlords earn a fair return and make necessary repairs” on the apartment buildings.

He added, “I want to thank the advocates, activists and renters of Montgomery County for pushing for this legislation to be passed. I worked to support rent stabilization more than 35 years ago in Takoma Park, and I saw how it made a difference in people’s lives.

“Having that stability in the cost of their housing makes families more secure and removes the threat that an unreasonable rent increase will force them out of their home. I appreciate the work of the County Council and their staff for their collaborative work on this bill.”

Councilman Will Jawando (D-At large) said he appreciates his council colleagues’ “dedication to working on a compromise bill that is responsive to the needs of our communities. We now have a rental framework that creates stability and predictability for renters and landlords.”

Councilwoman Kristin Mink (D-Dist. 5) also applauded he fellow councilmembers and housing advocates.

“It is an honor to stand with my colleagues on this historic day, as we pass rent stabilization in Montgomery County, Maryland, that will provide tenants with housing stability,” she said. “This couldn’t have happened without the voices of tenants and advocates who stood up for their families and neighbors.”

Councilwoman Laurie-Anne Sayles (D-At large) added: “I’m glad we could compromise on Bill 15-23 after a tough, deliberative process with lots of stakeholder input. While this bill is not perfect, it balances the needs of renters and landlords by limiting rent increases and increasing our supply of affordable housing. I will continue to engage with renters and landlords to ensure that the implementation of Bill 15-23 goes smoothly and will be ready to adapt, should there be significant changes or unintended consequences of this legislation.”

Councilmembers Gabe Albornoz (D-At large), Marilyn Balcombe (D-Dist. 2), Dawn Luedtke (D-Dist. 7) and Vice President Andrew Friedson (D-Dist. 1) voted against the bill as amended.

Albornoz called the action part of “a very complicated path of ensuring much needed stability for our renters at the very likely expense of much needed future housing.

“While the public narrative unfortunately framed this as tenant versus landlord, that is simply not the case. This did not have to be a zero-sum game. We need to protect our renters from rent gouging by unscrupulous landlords. The original language introduced in Bill 15-23 was a very measured, true compromise that would have achieved that.”

Luedtke said the bill approved by the council is “the strictest of any major jurisdiction in the region.”

She added that it “will not make rents more affordable and will likely only exacerbate our housing issues by disincentivizing new housing supply. Further, our county now faces real risks of existing rental housing coming off the market and decreased property tax revenue given this bill’s uniquely stringent approach to regulating a critical part of our economy.

“I supported the original Bill 15-23 as a needed consumer protection measure to protect tenants from double-digit rent increases combined with additional county investment to preserve and build new affordable housing units,” Luedtke added. “Unfortunately, I’m afraid the final version of the bill severely misses the mark when it comes to balancing tenant protections and housing providers’ ability to create new units and adequately maintain existing units.”

The new legislation provides exemptions from rental increase restrictions for certain units, including newly constructed units that have been offered for rent for less than 23 years, religious facilities, licensed assisted living facilities or nursing homes, among other exemptions.

The legislation permits certain rental increases to fund capital improvements, requires landlords to comply with existing requirements for annual reports regarding rents and generally amends county law concerning rents and landlord-tenant relations.

Elrich said county government will continue to “produce, preserve and protect” the housing stock in the county.

Anderson is hoping that the new legislation will help her find a place to live in Montgomery County that will not face exorbitant rent increases every year.

“I really want to live here, and now I have a little more hope,” she said