The City of Rockville and Montgomery County are addressing affordable housing with differing approaches. Both jurisdictions took action on rent control this summer, with plans for future legislation or applicable regulations on rent to follow later this year.
The City of Rockville has rejected mandatory rent caps following a lengthy community forum and Mayor & Council discussion, ultimately voting to direct City Planning staff to focus on renter protections without hard caps on rent renewal rates. This vote reflects the Mayor & Council’s concerns about potential unintended consequences on the housing market and local economy.
In contrast, Montgomery County has moved forward with nearly a year-long effort to stabilize rent prices, resulting in regulations capping annual rent increases at 6%. Exceptions include newly built properties and those with two or fewer units.
Rockville Rent Stabilization Proposal
On July 9, 2024, the Rockville Mayor & Council received public testimony on potential rent stabilization legislation during its Community Forum. Rockville residents, property owners, landlords, developers, and other interested parties provided nearly three hours of testimony on this issue – with the majority of speakers testifying in support of some form of rent stabilization in the City.
Testimony against future rent stabilization legislation largely focused on its potential negative impacts on housing production and supply, which many identified as the primary driver of rising housing costs. In contrast, supporters generally cited a need for a stronger regulatory framework to rein in annual rent increases.
Following the public testimony, the City’s Department of Housing & Community Development (DHCD) presented research and background information on rent stabilization, including a summary of relevant housing issues, the general pros and cons of future legislation, case study findings, and potential impacts on the City’s budget, property values, housing production, social justice initiatives, and other relevant subjects.
The Mayor & Council considered the following potential strategies for addressing housing affordability during its discussion:
- Hard Cap on Annual Rent Increases
The Mayor & Council considered capping annual rent increases at a percentage linked to the Consumer Price Index (CPI), to ensure that rent hikes remain in line with broader economic trends and do not disproportionately impact tenants.
- Enhanced Tenant Protections
The Mayor and Council also considered including provisions to safeguard tenants from unfair evictions and require landlords to provide just cause for terminating leases, in an effort to create a more stable living environment for renters.
- Incentives for Landlords
To balance the interests of landlords, the Mayor and Council considered including tax incentives and other benefits for property owners, in connection with potential new regulations. This approach seeks to maintain the quality of housing and encourage cooperation from landlords.
Next Steps in Rockville
The Mayor & Council’s discussion on rent stabilization concluded with a 5-2 vote to direct DHCD staff to prepare research and analysis for the City’s next affordable housing work session. The Mayor & Council specifically requested that staff prepare preliminary background information on new renter protections – including actions to better address improper rental conditions, enforce code violations, and initiatives to address housing affordability and transparency (such as disclosures on fees, disclosures on past rental increases, and programs to incentivize adherence to voluntary rent guidelines – but without mandatory hard rent caps on renewal rates). This vote effectively directed staff to prepare a preliminary “policy menu” for future Mayor & Council review.
The next Rockville Mayor & Council affordable housing work session will likely occur this fall, following the City’s August recess.
Montgomery County’s Approach
On July 18, 2023, the Montgomery County Council passed Bill 15-23, a comprehensive rent stabilization measure. The bill was approved by a vote of 7-4 and signed into law by County Executive Marc Elrich on July 25, 2023. While the law will officially take effect 91 days after signing, it won’t be operational or enforceable until the Montgomery County Department of Housing and Community Affairs (DHCA) drafts and approves the necessary regulations. This means full adoption of the law is still several months away.
Key Provisions of Bill 15-23
The centerpiece of Bill 15-23 is the cap on annual rent increases. Under the new law, landlords will be limited to increasing rent by the lesser of:
- -The local Consumer Price Index for All Urban Consumers (CPI-U) plus 3%, or
- A maximum of 6%.
Exemptions and Special Provisions
The law includes several notable exemptions:
- Multifamily housing constructed after January 1, 2000, is exempt from rent increase restrictions for 23 years.
- Individual landlords who rent two or fewer units are exempt.
- Units in religious facilities, licensed assisted living facilities, and nursing homes are also exempt from these restrictions.
Additionally, the law allows for certain rent increases to fund capital improvements and gives landlords the ability to “bank” some unused increases for future years.
Next Steps: Implementation and Regulation
While the bill’s passage marks a significant step in rent stabilization efforts, there is still some ambiguity around the extent and applicability of certain exemptions. DHCA is responsible for drafting the regulations that will clarify these details, and these regulations must be approved by the County Executive before the law can be fully enforced. As this process unfolds, both tenants and landlords should stay informed about the upcoming changes and potential impacts
The Road Ahead in Rockville & Montgomery County
While Rockville has opted for a more flexible approach focusing on renter protections without hard caps on rent increases, Montgomery County is enacting more firm rent stabilization measures.
