Maryland's Montgomery County Passes 6% Cap on Rent Increases

It took them several months to reach a decision, but the Montgomery County Council in Maryland finally adopted a rent stabilization bill by a 7-4 vote this week. The bill caps increases at 6%.

During the heated debate on the measure, the council was deciding between a bill that set a maximum cap at 3% and an “anti-rent-gouging” proposal that would have allowed increases as high as 8% plus inflation.

The competing proposals were introduced in March. The bill that passed this week represents the compromise: a cap of 3% plus inflation or 6%, whichever is lower, the Washington Post reported.

The average annual rent increase over the past decade in Montgomery County has been 2.1% and rarely exceeded 3%. However, in 2021 rents rose by an average of 9%.

Supporters of the cap, which goes into effect in 90 days, say it is aimed at protecting the most economically vulnerable renters in the DC suburbs from sudden jumps in housing costs, An estimated 8.5% of the residents in Montgomery County live in poverty.

Council members who supported the measure said Montgomery County is facing a housing shortage that could cause rents to surge in coming years as demand outpaces supply.

Developers and landlords strongly opposed the bill, which they said would inhibit new construction—and eventually lead to higher housing costs, the Post reported.

More than a dozen amendments were proposed during the nine-hour debate on the rent-stabilization measure. The council voted to give an exemption to landlords who rent out two units or less and newer buildings that have been on the market for fewer than 23 years and properties undergoing extensive renovations.

The council also passed an amendment they’re calling a “banking provision”—it allows landlords who do not implement a permitted rent increase to bank that amount in a future year, but the total is capped at 10%.

Council member Gabe Albornoz, who wanted to set the rent cap at 9%, also proposed to sunset the bill after five years. After his proposals were shot down, Albornoz warned the council that the rent cap that was adopted will impinge future growth in the county.

“We’d be naïve to think this isn’t going to have a substantial impact on potential future growth in the county. We are playing with fire,” Albornoz said, the Post reported.

Tenant advocates were pleased to get a bill passed on Tuesday. About 50 of them began the day standing on the steps of the council building with protest signs reading “Protect all renters in all types of housing” and “This Barbie supports vacancy control.”