Friends–
On Tuesday, the County Council approved landmark legislation to protect tenants and stabilize rents countywide. I am proud to not only have authored the original bill–my very first bill as a Councilmember–but I also offered the critical compromise amendments to secure passage with a vote of 7-4.
Going into this debate my guiding principle was that everyone should have a safe, stable place to call home regardless of how much money they make. I am so proud to live in a County that cares for families and our entire workforce, not only with words but with legislation that protects the most economically vulnerable to work and live in Montgomery County. While the debate on this legislation has been fierce, my approach was to bring people together to pass a meaningful and workable solution. We have done just that.
Some notable features of the compromise legislation are:
- Limits annual rental increases to local inflation (CPI-U) plus three percent, but no more than 6% total.
- Exempts new construction for 23 years
- Allows landlords to bank unused rental increases to up to 10%
- Exempts landlords who own two or fewer units
- Provides mechanisms for landlords to exceed the rental caps for capital improvements and to ensure fair returns
- Exempts for 23 years buildings that have undergone substantial rehabilitation (40% or more of the value of the building)
As you can see, we were able to strike a careful balance between protecting tenants from unconscionable rental increases while also ensuring that landlords and developers have the means to continue investing in our community. As noted in this Washington Business Journal article quoting the county’s Office of Legislative Oversight, “Research findings indicate that rent regulations do not negatively impact new housing construction, especially in jurisdictions where new buildings are exempt.”
A word on my votes on the rental increase caps. The initial legislation set the cap at 8% + CPI. While I had always intended this to be a starting point in the discussions, I learned over the course of the last six months many things about the state of our local rental market. Through careful analysis of the research on rental regulation policies across the country by the County’s Office of Legislative Oversight and the Planning Board, extended deliberations at Council committee, and countless discussions with stakeholders on all sides of the issue, I came to the conclusion that a lower cap would benefit renters more with minimal risk to the supply side of the rental market. Indeed, in absence of rental caps over most of the last 10 years, average rental increases have hovered around 2-3%.
I understand that there are differing views on the risk of this policy to the housing supply. I am committed to constantly evaluating the data not only on new construction and building maintenance, but also evictions, homelessness, rental increases, and many other factors to make sure the policy is achieving its goals without unintended consequences. We can always make adjustments.
The legislation will be effective in 91 days and becomes operational and enforceable once regulations to implement the bill are drafted by the County Executive, transmitted to the Council, and approved by the Council.
Finally, I want to thank Councilmember Katz for joining me as sponsor and all the tenants, advocates, and stakeholders for participating in this policy making process. While discussion was heated and difficult at times, I am confident that we ultimately landed at a good place, and that will become clearer and clearer over time.
Sincerely,
Natali Fani-González
Councilmember, District 6
Take a look some of the press coverage we have received:
- Washington Post: “Montgomery council torn over 6% rent cap compromise“
- Washington Business Journal: “Rent stabilization adopted in Montgomery County as some developers threaten to pull back“
- Washington Post: “Montgomery County Council passes 6 percent cap on rent increases“