The Montgomery County Council voted yesterday to end all rent controls in the county threatening thousands of tenants with unlimited rent increases for the first time in more than four years.
In a county which has the highest average rents in the metropolitan area - $279 - the law limited rent increases for certain tenants to 5 per cent. The law, which expires Dec. 31, would be replaced by voluntary guidelines for landlords if County Executive James Gleasor signs the bill enacted yesterday by a 5-to-2 Council vote.
Tenants would not feel the effect of the expiration until March because the new measure would require 60 days notice before a rent increase.
County authorities expect more landlords to be conservative in their initial increase. "There will probably be isolated incidents of 15 per cent increases," however, said Tom Hamilton, former director of the county Office of Landlord-Tenant Affairs.
"You'll probably see landlords taking a low profile" Hamilton said. "They'll be very concerned that the Council might reinstitute rent control."
District Mayor Walter E. Washington announced Thursday that he would allow a three-year extension of the District's controversial rent control system to go into effect.
Montgomery County's new voluntary guidelines suggest that rents be raised only in accordance with increases in the cost of living as reflected by the area's inflation index.
Tenant organizations and the two county council members, who voted keep the controls had worried that rents would skyrocket without rent control in Montgomery County. Tenants testified that their rents are already too high, some complaining of $300 rents for one-bedroom apartments.
They have also cited recent figures showing that Montgomery County already has highest average monthly to keep the controls had worried that rent in any Washington metropolitan area jurisdiction and the lowest vacancy rate, 2 per cent.
Council member John L. Menke, who wrote the newly passed bill, has said that it is rent control in Montgomery County that keeps builders from constructing new apartment complexes.
"There are several issues preventing continued building in the county," Menke said. "One is the sewer moratorium and another is the high interest rate. If you life rent control there will be no great spurt of building. But if you leave it on, it would be one more disincentive to building. People are scared their rents will go up to 50 per cent over night, but they're not going to do that."
Council members Elizabeth Scull and Jane Ann Moore cast the two votes in favor of retaining the controls. "There will be much hardship for our older people and others," said Scull. "And that will be the accomplishment, of the action taken yesterday.
Scull and Moore had proposed a bill that would extend rent control for another two years.
Moore said the voluntary guideline bill "will discourage low-to-moderate income tenants from coming to the county. It (the bill) has not provided against gouging, and it has not provided for emergency rollback to rent control."
Moore accused her colleagues of "selling out to those who make big contributions to election campaigns." It was a statement that several Council members angrily denied, calling it "a shoddy innuendo."
The County Council has spent the last three months listening to testimony from tenants and landlords with Council members debating among themselves whether rent control should be extended. Under the rent controls that expire Dec. 31, increases each year are permitted in conformity with the inflation index.
Landlords for about a third of the county's 180,000 renters were exempt from the controls because the tenants lived in new apartments or were moving into vacated apartments. The newly enacted voluntary guidelines would cover the renters.
Council members voting to end the controls and impose the voluntary system were Menke, Esther Gelman, Norman Christeller, Neal Potter, and Dickran Hovsepian.
The new bill would require the landlord to explain a rent increase in a written message to his tenants. If the rent increase exceeds the guidelines, a tenant could complain to the Landlord-Tenant Office. The landlord-tenant commission could write a report saying the increase is unjustified, but it would have no way of enforcing its decision.
According to Gene Sieminski, the director of the Office of Housing in Montgomery County, from July 1976 until September of this year decontrolled units have experienced increases of 10.1 per cent. In September, however, many units, rent went up 12 per cent, mostly in Silver Spring.
Caroline Lewis, a representative of the Apartment and Office Building Association, had argued that landlords in the county have been discouraged by utility rates that have risen 25 per cent in the last month.
Under rent conrol, "some people are getting less return on their money than if they had put it in the bank and gotten the interest. Lending institutions refuse to loan money for building repairs.
"Over 6,000 units have been converted into condominiums. It's a sophisticated way of abandoning your property," she said.