A Montgomery County Council member, who introduced voluntary rent controls set by the county in January, said last week he will consider seekign the revival of mandatory controls if area landlords do not follow more closely the voluntary guidelines. "It's not a threat, it' not an ultimatum," said John Menke, who drated the voluntary of guidelines tha ended five year of mandatory, and contervial, rent contrals incounty "I'm serving warning that I'm not going to going to let rents go all over the place."
Mende outlined his warning in a letter sent last week to Carlone Lewis, the legislative liason for the Aparment adn Office Building Association (AOBA). The AOBA represenJan 1 when the bill took effect, Menke write,'there is a strong minority (of landlords) whose incresed are evidently out of . . . some 32 percent of the increases to be received are above the guideline, and even worse, 6.7 percetn representing 750 units, are more thntwice the guideline.
Menke wrote that he wanted the Association, tenant groups and the county executive to seek improved complaince with the guide in the next 30 to 60 days. If not, he said, "I see little alternative to reinsutuio of some form of rent control."
Menke said he intended to letter to be strong.
What I'm saying is that I want of see, in the next few months, strong efforts to comply with the spirit of the law."
The guidelines are determined by a formula based on the percentage change in the Consumer Price Index and changes in fuel and utility costs. Since CPI changes are issued quarterly, rent guidelines are expected to change accordingly. For instance, the CPI change for the current quarter was issued April 1,and, therefore, the rent guideline has been changed. Before April 1 the guideline was 6.1 percent, but now is 4.6 percent. That means that landlords in this quarter should raise rents no more than 4.6 of the current rent being charged!
Menke said that according to data he received from the county Office of Landlord-Tenant Affairs, a third of the new notices for rent increases that have been issued since January exceed the 6.1 percent guideline. He noted that 68 percent of the rental units eligible for rent increase are at or below the guidelines. Another 20 to 30 percent of eligible units have not increased rens at all, he said.
In some cases, he said, increases may vary from unit to unit within one building, but the average increase for the entire building ends up the guidelines.
According to Menke, such procedures are not prohibited by the guidelines. However, the county Office of Landlord Tenant Affairs believes averaging is not a legitimate way for landlords to meet the voluntary guidelines. The County Council currently is considering a bill to clarify the guidelines.
Menke said he expected some increases to exceed the guideline limits, but did not know at what point any excess should be considered too high.
"If there were, I would have put it in the letter. If we had one (increase) to 10 percent over the guideline, I'd say that's great. If we had two-thirds over, I'd say the law has failed. You can't have a price control for seven years without having difficulty getting out of it. If landlords increase their attention and redouble their efforts, I think the situaltion will improve."
He noted in an interview this week that he expected it to be even more difficult for landlords to meet the new guideline of 4.6 percent.
Menke said he felt his letter would prompt AOBA to "lobby and persuade their members (to comply with the guidelines)."
"I'm not sure we can do anything other than what we've been doing." said Caroline Lewis, who added that AOBA had sent letters to their member landlords explaining the law and "encouraging" them to follow it. "I think the majority, if not all, are complying."
The AOBA acts as a lobbying group for its members, informing them of legislative action and other matters that affect the operation of rental units. Membership in the association is voluntary.
Lewis said the landlords in AOBA take the voluntary guidelines as seriously as they took mandatory rent controls and dislike the new set just as much as the old. "They'd rather see the free market take its own form and shape," she said.
Lewis said she believed some of the hihger rents increases were justified, for reasons "like high operating expenses." She also noted that the county's Landlord Tenant Commission, which has the power to question (but not change) rents, has not yet ruled that any rent increase has been out of line.
According to county officials, the commission has only asked for a public hearing on one proposed increase so far this year. The commission can urge a landlord to adjust the increase, but does not have the power to force him ot do so.
Ruth Lederer, head of the Montgomery County Tenants Association, said some of her members had received extremely high rent increases - one as high as 46 percent - since the law went inot effect. She said she did not knwo how many had received high increases, but at her organization's last meeting"there were a lot of very upset tenants."