The City of Rockville and Montgomery County are taking different approaches to affordable housing. Both jurisdictions enacted rent control measures this summer, and plans for future legislation or applicable rent regulations are expected to follow later this year.
The City of Rockville, after a lengthy community forum and discussion between the mayor and city council, rejected a mandatory rent cap and ultimately voted to direct city planning staff to focus on tenant protections. without hardcaps on rent increase rates. This vote reflects the Mayor and Council’s concerns about potential unintended consequences for the housing market and the local economy.
In contrast, Montgomery County began stabilizing rents nearly a year ago. The result is regulations that limit annual rent increases to 6%, with exceptions for new buildings and those with two or fewer units.
Proposal for rent stabilization in Rockville
On July 9, 2024, the Mayor and City Council of Rockville received public testimony on potential rent stabilization legislation during its Community Forum. Rockville residents, property owners, landlords, developers, and other interested parties testified for nearly three hours on the topic – with the majority of speakers supporting some form of rent stabilization in the city.
Arguments against future rent stabilization laws largely focused on the potential negative impact on housing creation and supply, which many saw as a major cause of rising housing costs. Proponents, on the other hand, generally argued for a stronger regulatory framework to curb annual rent increases.
Following the public testimony, the city’s Department of Housing & Community Development (DHCD) presented research and background information on rent control, 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, social equity initiatives, and other relevant topics.
During their discussion, the Mayor and City Council considered the following possible strategies to improve housing affordability:
- Fixed upper limit for annual rent increases
The Mayor and City Council have considered capping annual rent increases at a percentage based on the Consumer Price Index (CPI) to ensure that rent increases remain consistent with general economic trends and do not place a disproportionate burden on tenants.
- Improved tenant protection
The Mayor and City Council also considered including provisions to protect tenants from unjustified evictions and to require landlords to provide valid reasons for terminating leases in order to create a more stable living environment for tenants.
- Incentives for landlords
To balance the interests of landlords, the mayor and city council considered tax incentives and other benefits for property owners in connection with possible new regulations. This approach aims to maintain the quality of housing and encourage cooperation among landlords.
Next steps in Rockville
The Mayor and City Council’s discussion of rent stabilization ended with a 5-2 vote directing DHCD staff to prepare research and analysis for the City’s next work session on affordable housing. The Mayor and City Council specifically requested that staff prepare preliminary background on the new tenant protections — including measures to better address unreasonable rental terms, penalize building code violations, and initiatives to improve housing affordability and transparency (such as fee disclosures, disclosures of past rent increases, and programs to encourage compliance with voluntary rent policies — but without mandatory caps on renewal rates). This vote effectively directed staff to prepare a preliminary “policy menu” for future review by the Mayor and City Council.
The next work session of the Rockville Mayor and City Council on affordable housing is expected to take place this fall after the city’s August recess.
Montgomery County’s approach
On July 18, 2023, the Montgomery County Council passed Assembly Bill 15-23, a comprehensive rent stabilization measure. The bill passed on a 7-4 vote and was signed by County Executive Marc Elrich on July 25, 2023. Although the bill officially takes effect 91 days after signing, it will not be effective or enforceable until the Montgomery County Department of Housing and Community Affairs (DHCA) drafts and approves the necessary regulations. This means that full passage of the bill 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 are only allowed to increase rent by the lower of:
- -The local consumer price index for all urban consumers (CPI-U) plus 3% or
- Maximum 6%.
Exceptions and special provisions
The law provides for several important exceptions:
- For apartment buildings built after January 1, 2000, there is a 23-year rent increase limit.
- Individual landlords who rent two or fewer units are exempt.
- Units in religious institutions, state-approved assisted living facilities and nursing homes are also exempt from these restrictions.
In addition, the law allows certain rent increases to finance major improvements and gives landlords the opportunity to save some unused increases for future years.
Next steps: implementation and regulation
Although the passage of the law represents a significant step in rent stabilization efforts, there is still some ambiguity regarding the scope and applicability of certain exemptions. The DHCA is responsible for drafting the regulations that will clarify these details, and those regulations must be approved by the County Executive before the law can fully take effect. As this process moves forward, both tenants and landlords should stay informed of the upcoming changes and potential impacts.
The way forward in Rockville and Montgomery County
While Rockville has taken a more flexible approach that focuses on tenant protections without hard caps on rent increases, Montgomery County enacts stricter rent stabilization measures.
