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Caps on rent hikes test Montgomery’s appetite for tenant protections

Members of CASA de Maryland wear shirts that read “Stop Rent Hikes” at the county executive and council inauguration at the Music Center at Strathmore in Bethesda in December. (Ricky Carioti/The Washington Post)
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Two competing proposals to cap rent hikes in Montgomery have split the all-Democratic County Council in an early test of the county’s political appetite for tenant protections amid a growing housing crisis.

An anti-rent-gouging bill that is part of the Tenant Assistance and Protection Package, backed by a majority of the County Council, would limit annual rent increases to 8 percent plus inflation. The competing Housing Opportunity Mobility and Equity Act would limit yearly rent increases to 3 percent or the county’s voluntary rent guidelines, whichever is lower.

The proposals position Montgomery County to join the ranks of a growing number of jurisdictions around the nation that have opted to put guardrails on rent increases as the country faces a housing shortage and nearly two years of massive rises in rent. Landlords in California, Maine, Maryland, Minnesota, New Jersey, New York, Oregon and the District have some limit on rent increases in place, either at the state or local level. Those restrictions vary, with some cities such as St. Paul, Minn., setting a cap as low as 3 percent and some states such as Oregon and California opting for a variable cap linked to inflation. Many more cities and counties are now considering measures to cap rent hikes, including in neighboring Prince George’s County, where the council voted this week to temporarily limit rent increases to 3 percent.

Montgomery County needs developers to build about 60,000 new units of housing to accommodate new residents set to move to the region by 2040, according to a 2020 assessment of the county’s housing needs. At the same time, the Department of Housing and Community Affairs estimates that Montgomery could lose between 7,000 and 11,000 units of naturally occurring affordable housing by 2030 because of rent increases if those increases go unchecked.

The council’s dueling proposals pit tenants’ rights advocates against pro-growth Democrats who fear a cap that is too low could stunt the development of new housing stock and ultimately make the county’s housing affordability crisis worse.

As the politicians debate where to put a cap, many renters say they are struggling.

This year, Agbegnigan Amouzou’s landlord raised his rent by nearly $160 a month, an 8 percent increase that sent the assistant teacher and soccer coach looking for a smaller home or a second job to make ends meet.

“Here in the east county, people are in immigrant communities,” said Amouzou, who came to Montgomery County over 20 years ago and lives in Fairland off Route 29. “It’s very hard for people to join one and one together to make two.”

This year’s rent hike is just the most recent since Amouzou has lived in the building, he said. When he moved in, rent was about $1,800. Now his rent is $2,158 — a nearly 20 percent increase over five years.

Amouzou also said his landlord has been slow to repair the apartment, taking seven months to fix a broken dryer and only replacing peeling paint in a bathroom after repeated requests.

“It looks like you’re not even living in America,” he said. “I had to fight, fight, fight for them to come fix it.”

In the eyes of a minority of council members, the Democratic county executive, residents facing increasingly steep rents, and many activists, the higher cap does nothing to stabilize the cost of housing for vulnerable renters and runs counter to Montgomery County’s reputation as a leader on liberal policymaking.

“It will be a step backwards,” said council member Will Jawando (D-At Large), who co-wrote the HOME Act, which would permanently cap rent increases at 3 percent. Jawando noted that capping increases at 8 percent plus inflation would do nothing for renters like Amouzou who are struggling even with yearly increases that some consider to be small. Implementing a higher cap would put Montgomery County at odds with neighboring jurisdictions, Jawando said, noting Prince George’s County’s vote to curb rent hikes.

But the higher cap — which would not sunset — already has the backing of six council members who signed on as lead authors, indicating that it has the support to prevail.

Council member Natali Fani-González (D-District 6) penned the anti-rent-gouging proposal after a January presentation to the council’s Planning, Housing and Parks Committee on the county’s increasingly dire housing shortage. Advocates and government agencies that handle housing issues listed their worries about rising housing costs and a housing stock lagging behind demand. Nonprofit and for-profit developers shared fears that excessive regulation could impair funding for future projects, but even some of those developers agreed that the county should act to stop extreme examples of landlords excessively raising rents.

“I believe we need to pass anti-rent-gouging,” Fani-González said. “Right now, because we don’t have anything, people can raise their rent however they want.”

But she said the county cannot risk putting a damper on new construction while facing a housing shortage.

Many of her colleagues on the council agree. Council members Andrew Friedson (D-District 1), Marilyn Balcombe (D-District 2), Sidney Katz (D-District 3), Dawn Luedtke (D-District 7) and Gabe Albornoz (D-At Large) have thrown their support behind Fani-González’s proposal to cap increases at 8 percent plus inflation. That bill comes packaged with an additional $18 million investment in rental assistance that could support up to 2,800 households and $4.5 million to support first-time home buyers and low-income homeowners at risk of losing their homes.

“We have struck a balance, I believe, that ensures we are not going to create the very problems we’re trying to solve,” said Friedson, who has been skeptical of rent stabilization in the past.

Friedson and Fani-González point to data presented by the Montgomery County Planning Department that shows the county’s 10-year rent growth average was 2.1 percent and most landlords in Montgomery County keep rent increases near levels set in the county’s voluntary rent guidelines even without a cap in place. They also highlighted a report created for the Apartment and Office Building Association of Metropolitan Washington, which opposes rent restrictions, that suggested rent control in the county could lead to losses in tax revenue and jobs.

“Yes, there have been extreme cases of people getting 15 to 20 percent rent increases, and those are crazy,” Fani-González said. “I want to focus on that and helping people in need.”

But advocates for renters are skeptical that developers will abandon the county if rent is stabilized, especially if the cap comes with an exception for new construction that allows landlords to raise rents freely, which both proposals include. Many jurisdictions with rent control have seen ongoing development, while some places without any tenant protections have seen housing blight and a lack of investment, said Matthew Losak, executive director of the Montgomery County Renters Alliance.

“The places with renter protections have the most valuable housing stock,” Losak added.

Council member Kristin Mink (D-District 5), who also co-wrote the HOME Act, said the development of new housing stock cannot be the county’s only concern if low-income renters are being forced to leave the county because of unmitigated rent increases.

“It also matters who we’re housing,” she said. “It’s not an acceptable solution to allow existing renters to be displaced and say this will make it easier to build a bunch of new, mostly luxury housing.”

Mink and Jawando face an uphill battle in the council, where a majority of their colleagues signed on to the competing bill — but they do have support from County Executive Marc Elrich (D), who will sign or veto whatever legislation the council ultimately passes.

Elrich said he supports the lower cap on rent increases. He emphasized the need to preserve the county’s existing affordable housing stock by tying rent increases to the costs of maintaining a property so that landlords cannot increase prices to bolster profits at the expense of low-income renters. Elrich said the majority-backed bill “licenses rent gouging,” and he may consider using his veto if an analysis shows that the proposal would make rent increases worse than under current conditions where there is no cap in place. The council would need seven votes to override his veto.

“It’s really disappointing to see six people sign on to a bill that they know damn well is going to lead to rent increases that are unaffordable,” Elrich said.