Montgomery County, weary of defending its rental apartments from waves of condominium conversions, is taking its troubles to Annapolis.
Montgomery County Executive Charles W. Gilchrist, who has spent much of his first year in office grappling with tenant protests, law suits, task froce studies and the political dilemmas of condo conversion, hopes to solve his problems with a set of state laws to reinforce county laws.
Gilchrist's main proposal calls for taxing a developer 4 percent of the selling price of each newly converted condominium unit. The funds would be used by the county to help developers finance new apartment construction, ideally to replace rental apartments lost to condominiums.
Other Gilchrist proposals would ensure that tenant associations have the "right of first refusal," that is, a chance to purchase their buildings before they are sold to an outside converter, as county law now provides.
Under county law, tenants have 120 days to organize and buy their building before the landlord can sign a contract with an outside developer. Although the law was upheld in court, county officials fear that without the backing of state law, the county measure could be over-ruled by other state condominium legislation.
"We think we have a positive approach that will not stop condo conversions but relieve the hardships that often accompany them," Gilchrist said.
But first, Gilchrist, a former state senator, and his staff will have to convince key legislators -- even within the Montgomery County delegation -- to support the bills.
So far the proposals have failed to win support from several prominent county lawmakers, including Sen. Laurence Levitan (D-15) and Del. Joseph E. Owens (D-17). But Del. David L. Scull (D-18), chairman of the Montgomery house delegation and a strong tenant advocate, believes the measures will have general support in the delegation. A delegation hearing will be held later this month.
In the past decade, more than 20 percent of the county's rental apartments have been converted to condominiums -- about 10,000 of the county's 50,000 apartments.
Alarmed by the displacement of tenants, particularly those on fixed incomes who cannot afford to buy their units at combo market prices, Gilchrist ordered a moratorium on condominium conversions last summer. Area real estate interests sued, seeking to overturn the order.
The Circuit Court upheld the moratorium and county laws to give tenants the first crack at buying their buildings. But county officials fear a once-vetoed statewide bill up for reconsideration in Annapolis this year could undo those rulings.
The statewide bill, sponsored by Levitan and passed last session, would permit a developer to sell a unit as soon as it is vacant, instead of waiting 180 days as current law mandates.
Gov. Harry Hughes vetoed the bill at the request of the Montgomery County government. It will be reconsidered in this session. Opponents fear it may gain the two-thirds majority needed to override the governor's veto.
Rick Ferrara, a housing specialist on Gilchrist's staff said, "The way we're looking at it, if the veto is overridden, theoretically it is possible that our local right-of-first-refusal legislation would not be legal. Just to make sure, we want to introduce state legislation to give Montgomery tenants right of first refusal."
Although condominium developers usually offer tenants a chance to buy their individual units at a discount, housing officials maintain the price is much higher than it would be if the entire building were purchased by tenants.
"The price of units, generally speaking, is higher than the price developers paid. Tenant associations don't inflate prices although there are instances where this has been abused," Ferrara said. p
Levitan, a Rockville attorney who chairs the important senate budget and taxation committee and serves on the governor's condominium commission, maintains tenant associations become speculators when they buy their buildings. m
"I don't favor this first right of refusal. I think it's a mistake. Tenant associations should negotiate just like anyone else. The question is how much interference can government have on private property," Levitan said.
But Sen. Victor L. Crawford (D-20), who chairs the county senators said, "I'll probably side with the tenants. The rest of the state doesn't care. It's a unique Montgomery County problem."
Local bills that receive a majority of votes from a county's delegates and senators usually sail through the General Assembly as a courtesy to the county.
Gilchrist's condo package includes a 4 percent tax on the sale of newly converted condominiums by developers. An accompanying proposal would empower the county's Housing Opportunities Commission to use the funds to grant low interest loans to developers interested in building rental apartments.
"The 4 percent tax is going to be a tough fight," Ferrara said. "It will cut into condominium profits but we think those profits are pretty substantial to start with."
Although most of the 26 members of the Montgomery delegation agree that Metro funding is their top priority, they don't agree on much else.
Montgomery's crew of liberal, reform-minded legislators also tend to focus much of their interest on bills to remedy statewide problems.
This year for example, Montgomery delegates have filed state-wide bills to ban the sale of drug paraphernalia, prevent dumping of hazardous wastes, bring back deposit bottles, permit tax credits on solar and wind-powered heating and cooling units and revamp title search procedures.
But some Montgomery legislators are doffing their white hats over the issure of state aid to education.
Out of a proposed $60 million increase to schools, Montgomery County would receive $104,387, a paltry sum in the eyes of most Montgomery County delegates compared to the $9 million Prince George's would receive and the $12 million possibly headed to Baltimore City.
The proposed additional money would be distributed throughout the state by a formula that simply gives to the poor what it takes from the rich, principally Montgomery County.
"We have always gone along with state programs where the wealthy help the less wealthy. We have provided votes for progressive programs but everything has its limits and that's going to be an issue with this proposal," said Scull.
Montgomery County and Howard County residents occupy several key leadership positions in Annapolis this year. But their colleagues do not expect Montgomery County to reap many benefits from this.
"No one is in a position in our delegation to promise anyone anything," said Del. Judith C. Toth (D-15B).
Senate President James Clark Jr. (D-14) is a senator Montgomery County shares with Howard County. Clark lives in Howard County and tends to take the broad view on issues, observers said.
House Majority Leader Donald B. Robertson (D-18), said, "My responsibilites call on me to take a statewide perspective. I'm not as involved as I was (in local issues) as when I was delegation chairman."
Levitan, meanwhile, is not only opposed to Gilchrist's condominium legislation but also to a controversial county bill to increase tax assessments on Montgomery County country clubs.
"It's very shortsighted," said Levitan, a member of Woodmont Country Club. He maintains that several clubs would go under immediately if their taxes were raised. Others, he says, would eventually sell their golf greens for housing development if taxes became too high.
"The county would suffer and people would suffer."
The bill as first introduced by Del. Luiz Simmons (R-17) would have ended immediately the tax break for country clubs. Simmons claims they cost the county $1.2 million in lost revenue this year alone.
As amended by Scull, the bill would gradually increase country club property tax assessments over a six-year period. After 1966, country clubs would pay property taxes on the same basis as homeowners. Taxes on homes are paid on 45 percent of a home's market value.
Simmons is confident the bill will gain delegate approval with Scull's amendments but is uncertain how it will fare on the senate side.
At this point no one forsees any legislative surprises in store for Montgomery County but as Sen. Howard A. Denis (R-16) said, "Predictions are invariably wrong. A legislative session becomes a being in itself with dynamics you couldn't anticipate."