During the lunch hour on Tuesday, County Councilmembers Will Jawando (D-At-large) and Kristen Mink (D-Dist. 5) were joined by County Executive Marc Elrich, dozens of county renters and other rent stabilization supporters in front of the County Council building in support of a bill they introduced on Tuesday.
But despite the multiple rounds of applause and lively energy during that news briefing—which lasted roughly an hour—Jawando and Mink do not currently have the votes to pass that legislation.
Councilmember Natali Fani-González (D-Dist. 6), Council Vice-President Andrew Friedson (D-Dist. 1), and Councilmembers Gabe Albornoz (D-At-large), Marilyn Balcombe (D-Dist. 2), Sidney Katz (D-Dist. 3), and Dawn Luedtke (D-Dist. 7) are cosponsoring a competing bill—which, according to the annual allowable rental increase, is less aggressive at helping tenants than Jawando and Mink’s proposal.
Elrich has said he would veto the latter bill if it remains unchanged—and given a veto override requires seven votes, Tuesday marked the formal start of what will be an extensive legislative debate, which will last for multiple months.
It was the first time that multiple Councilmembers publicly weighed in on why they sponsored either proposal—or why they didn’t pick one at all. Council President Evan Glass (D-At-large) and Councilmembers Laurie-Anne Sayles (D-At-large) and Kate Stewart (D-Dist. 4) are the three members who didn’t co-sponsor either bill.
Sayles said during Tuesday’s meeting that she opposed double-digit precent annual rent increases for tenants. That indicates she opposes the six-member led proposal, which caps annual increases at the regional’s consumer price index (CPI) plus 8%, with certain exemptions (one is for rental units offered for less than 15 years). Given the current CPI is 4.4%, that would currently make the cap 12.4%.
Jawando and Mink’s proposal, backed by Elrich, allows for 3% increases or the CPI, whichever is lower, and with certain exemptions. That includes new rental units that have been available for 10 years or less.
In an interview, Sayles would not specify an annual rent increase number that she thought was acceptable, as she was waiting for the legislative process to take place. Public hearings for both rent stabilization bills are scheduled for two public hearings on March 28 at 1:30 p.m. and 7 p.m. Friedson said during Tuesday’s meeting that both bills would be deliberated on in the council’s Planning, Housing, and Parks committee in June, after the council works through its annual budget process.
“I think it’s important for us to hear from the public, to hear from our landlords who will be impacted by this legislation, and then move forward with a rate that is amenable to all stakeholders,” Sayles said after the meeting.
One of those landlords is Dan Spahr, who owns seven single-family rental properties in the Silver Spring area. Spahr was present at Jawando and Mink’s presser on Tuesday.
He said he’s been below the 3% annual rental increase on his properties in recent years. He acknowledged that there’s a housing crisis in Montgomery County, but said that there is likely a “magic number” for annual rent increases between the competing proposals—he just didn’t know what that was.
Spahr agreed with what several tenants and supporters of Jawando and Mink’s bill said at the Tuesday news briefing—that rent increases of 10%, 15%, 20%, or more were too large. He suspects many of those are occurring at larger multifamily rental properties, as opposed to smaller mom-and-pop landlords.
“I think [with] the large, corporate landlords that don’t have a personal relationship with their tenants, I absolutely think there needs to be controls in place so you can’t rent gouge,” Spahr said.
What provisions are in both bills?
Outside of the difference in percentages for allowable annual rental increases between both packages, and the length of time for exemptions for new construction, there are other differences.
According to Jawando and Mink’s bill, the exemptions to rent stabilization includes, but is not limited to:
- A licensed facility that diagnoses, cures, mitigates, and treats illnesses
- Owner-occupied group home
- Religious facilities
- Group-living facilities as defined in the county’s zoning laws
- Dwelling units governed by county or state agreements that limits rent charged, given the agreement remains in place
- Moderately priced dwelling units (MPDUs) in a building constructed after 2005 that are governed by a 99-year agreement with the county and that are affordable to families at 120% of area median income or lower
- Transient lodging facilities (hotels, short-term rentals, bed and breakfasts)
- School dorms
- Licensed assisted living facilities and nursing homes
- Accessory dwelling units (ADUs)
- Owner-occupied single-family homes
- Buildings originally constructed to contain only two dwelling units, one of which the owner resides in permanently
The other bill, led by Councilmembers Fani-González, Friedson, Albornoz, Balcombe, Katz, and Luedtke, contains many of those same exemptions. But their legislation exempts all single-family homes, and condos owned by individuals.
One other major difference between the bills is the options that landlords can take if they feel they need a rental increase higher than the annual cap. In Jawando and Mink’s bill, there is a process called a fair return petition, which allows for rental increases of up to 15% during a 12-month period.
Those petitions would be reviewed by the county’s Department of Housing and Community Affairs. Landlords that have properties that are deemed “troubled” or “at risk”—which broadly means they aren’t safe or inhabitable by county code—cannot use the petition process. They also must have passed a rental housing inspection within one year of the application date, per the bill.
Those landlords must provide information on operating expenses, net operating income, gross income, property taxes, and several other data points related to their revenues and expenses. Elrich said in an interview Monday that the county doesn’t currently have a fair petition process.
The other bill provides for an exemption process, but is less exhaustively described in its text, saying they can be granted if “in [county] accordance with Method (2) regulations, the Director [of the Department of Housing and Community Affairs] determines that the requirements would cause undue financial hardship to the landlord.”