Tuesday, July 18, 2023 / by Claudia Vieytes
Amid a surge of Maryland jurisdictions passing laws to limit rent increases, Montgomery County councilmembers are jumping into the fray with their proposals. With two separate rent stabilization bills set to hit the Council floor, the county is about to witness a heated debate that has raged for decades. This article examines the competing ideologies behind the bills and their potential impact on the region's housing policy.
The Current Situation: The expiration of a temporary measure that capped rent increases in Montgomery County at 0.4% last May has prompted the introduction of two rent stabilization bills. At-Large Councilmember Will Jawando's bill proposes a permanent cap on most rent increases at 3%, aligning with the average hike in the area. District 6 Councilmember Natali Fani-Gonzalez, on the other hand, presents a more moderate approach with a bill that limits new hikes to inflation plus 8%.
Competing Ideologies: Jawando's bill aims to provide consistent housing stability by ensuring county residents' affordability. His proposal includes regulations governing rent increases during apartment turnovers, extended vacancies, and poor property conditions. Additionally, the bill seeks to apply rent stabilization measures to many newer buildings, with exemptions only for ten or newer apartments.
Fani-Gonzalez's bill, modeled after Oregon's policy, focuses on preventing price gouging by property owners. By limiting rent increases to inflation plus 8%, her proposal aims to balance protecting tenants and maintaining a favorable environment for developers. Fani-Gonzalez emphasizes the need to consider industry leaders' entire range of views and not deter new construction with overly restrictive measures.
The Impact on Development: The debate over whether to subject new developments to rent stabilization laws is critical to implementing these policies. Property owners and developers argue that profit limitations during a building's initial years discourage the creation of new housing. However, tenants contend with skyrocketing rent prices, leading to housing insecurity. Finding the right balance between encouraging development and protecting tenants' interests remains challenging.
Financial Assistance for Renters and Homeowners: Alongside the rent stabilization bills, two additional measures aim to provide financial support to renters and prospective homeowners in Montgomery County. One proposal seeks to increase the Rental Assistance Program to $30 million. In comparison, the other allocates $4.5 million from the American Rescue Plan Act to assist first-time homebuyers and homeowners at risk of foreclosure. These initiatives complement the rent stabilization efforts, addressing the broader housing affordability and assistance issues.
The Political Landscape: While Fani-Gonzalez's slate of bills, named the Tenant Assistance and Protection Package, has garnered support from five other council members, County Executive Marc Elrich has endorsed Jawando's bill. Elrich believes that even increases of 10% are unaffordable and that a 3% cap is necessary. These diverging positions highlight the complexity of finding a solution that satisfies all stakeholders.
The upcoming rent stabilization debate in Montgomery County, Maryland, signifies a significant turning point in the region's housing policy. With rent increases impacting a substantial portion of the county's population, it is essential to balance protecting tenants and incentivizing housing development. The competing ideologies of Councilmembers Jawando and Fani-Gonzalez reflect different perspectives on how much leeway property owners should have in increasing rents. Ultimately, finding a solution that addresses the concerns of low-income and moderate-income renters while also considering the needs of property owners and developers will be crucial for creating a stable and affordable housing market in Montgomery County.