Prince George’s County Enacts Rent Stabilization Act, Montgomery County Introduces Two Rent Control Bills

As a follow-up to our most recent alert, below is an update on rent control activities in the region.

Prince George’s County

On March 2, 2023, the Prince George’s County Executive Angela Alsobrooks signed the temporary Rent Stabilization Act of 2023 (the County Act), restricting County landlords from increasing tenants’ rent above 3 percent over a 12-month period – except for properties (i) subject to certain affordable covenants, or (ii) with use and occupancy permits issued within the last 5 years. The County Act will becomes effective April 17, 2023, and will automatically expire one year from this date. During this 12-month period, the County plans to establish a working group to study rent control and seek to identify permanent solutions for addressing the rising cost of housing in the County – but the scope of any such permanent solution is unknown. Separately, the City of Mount Rainier, Maryland, an incorporated city within Prince George’s County, enacted its own Rent Stabilization Ordinance (No. 10-2022) (the Ordinance) on February 21, 2023. The Ordinance restricts City landlords from increasing rent by more than 60 percent of the Consumer Price Index (CPI) for the calendar year preceding the increase (Rent Stabilization Allowance). The Ordinance does not apply to rental properties that are less than 15 years old, buildings with 2 or fewer units, owner-occupied buildings, rental units that have never been leased, and short-term leasing agreements (i.e., less than 30 days). If not otherwise exempt, properties located within the Mount Rainier city limits may be subject to both the Ordinance and the County Act, with any conflicts decided in favor of the more restrictive law. Unlike the County Act, the Ordinance contemplates an exemption process that may allow landlords to implement additional rent increases necessary to achieve a return on investment. There are no sunset provisions in the Ordinance.

There are a number of questions that have arisen from the enactment of these new rent control laws. We are in contact with representatives from Prince George’s County Department of Housing and Community Development (DHCD) and Department of Permitting, Inspections and Enforcement (DPIE), as well as representatives from Mount Rainier’s City Manager seeking answers and interpretations. We will provide updates as they become available.

Montgomery County

This week, the Montgomery County Council introduced two separate rent control bills, one significantly more restrictive than the other. Introduced by Councilmembers Will Jawando and Kristin Mink as the Housing Opportunity, Mobility, and Equity (HOME) Act, Bill 16-23 limits rent increases to the lesser of 3 percent or the Voluntary Rent Guidelines (VRG) limit. The VRG is updated annually to represent the prior year’s increase in the rental component of the CPI for the Washington Metropolitan Area. Last month the County Executive announced a 2023 VRG limit of 5.8 percent. (The VRG for 2022 was 0.4 percent). Separately, , Councilmembers Natali Fani-González, Andrew Friedson, Gabe Albornoz, Marilyn Balcombe, Sidney Katz, and Dawn Luedtke introduced Anti Rent Gouging Protections as Bill 15-23, which caps rent increases at CPI plus 8 percent. Both bills include exemptions for units subject to affordable agreement and new construction, however, the Home Act would only exempt newly constructed units for a period of 10 years after they are offered for rent, as compared to 15 years under the Anti Rent Gouging Protections. A public hearing on these bills is scheduled for March 28, 2023, and there are many ways to provide testimony. Now more than ever, it is important for landlords, investors, employees, and others impacted by rent control to reach out to their elected officials to provide input and make their voices heard.

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