Maryland man faced a 59 percent rent hike. Caps will soon help others.

July 11, 2024

When Nick Lyon learned that his rent would go up by 59 percent, he fought his landlord and won.

Then, the letters started arriving.

For nearly a year, the Montgomery County resident has heard from neighbors who have faced steep increases in their lease renewal offers.

“I had the wherewithal to fight it, but I don’t know that most people in this building do,” Lyon said, noting that many of his neighbors are immigrants and seniors, who may not be in a position to negotiate or leave their apartments.

Montgomery County is poised to finally implement a rent stabilization policy that will make double-digit rent increases illegal in many cases. The Montgomery County Council plans to hold a committee meeting later this week to consider regulations that would empower county officials to enforce a cap of 3 percent plus inflation or 6 percent, whichever is lower.

That move aims to offer relief to renters who have experienced rapidly rising housing costs after the pandemic, with the average rent rising by 11.2 percent in Montgomery County between 2019 and 2023.

That move also comes nearly a year after the county first passed laws that put an upper limit on lease renewal increases — and then left renters waiting for regulations to enforce the new rules.

Neighboring Prince George’s County has signaled that it will also adopt a permanent rent-hike cap after testing the policy with a temporary 3 percent cap that would have expired later this year. Council members in Prince George’s last week unanimously agreed in the first of two votes to support a rent stabilization measure that would mirror the caps in Montgomery County. The council is set to take a final vote next month.

To see why rent-hike caps and enforcement measures are needed in Maryland’s suburbs, renters advocates and county leaders say, takes just looking at what residents have experienced in the past year. Some have seen their rents go up by 10, 15, even 25 percent or more, they say. And the landlords who have ratcheted up rents by double-digit percentages have not run afoul of Montgomery County’s law because of the long delay in approving regulations to enforce the new rules.

“It’s perfectly legal,” Lyon said. “There’s literally nothing you can do.”

Matt Losak, executive director of the Montgomery County Renters Alliance, said the group has received complaints from dozens of tenants facing striking jumps in monthly rent bills since the council passed its rent stabilization measure in July.

Particularly concerning to Losak and other advocates have been those hefty increases that have affected seniors who often live on fixed incomes and tend to struggle more than younger renters to move because of health or mobility issues. Without the regulations to enforce the county’s caps, there has not been not much help the group could offer renters.

Landlords and developers have pushed back on the proposed guardrails on their lease renewal offers. Many have claimed only bad actors raise rents far above the caps, except in circumstances when buildings are facing substantial costs to do things like replace roofs and upgrade infrastructure. Industry groups like the Apartment and Office Building Association of Metropolitan Washington opposed the rent stabilization laws that have passed in the region over the past year, arguing that they would backfire, reduce the county’s already too-sparse housing stock and eventually make rents more expensive.

In comments on Montgomery County’s draft regulations the group urged officials to make changes that would ensure “maximum flexibility to mitigate the negative impacts the [rent stabilization legislation] will have on the county.” Landlords, developers and industry groups pressed county officials to make exceptions for older buildings with steep maintenance costs, allow troubled and at-risk buildings to raise rents, and urged a number of other technical revisions to the regulations. They also said restrictions on things such as pet rent and lockout fees would put the burden of ballooning maintenance costs on all tenants and eventually make housing more expensive.

Lyon, 40, who works for a social media company, said he hopes the caps on rent increases will kick in before he has to renew his lease again next year.

He said other tenants living in Willard Towers — which is managed by AIR Communities, a Denver-based real estate company — have recounted receiving similar rent increases between 15 and 30 percent. Although he successfully negotiated his rent down to an 11 percent increase with the help of the county’s Office of Landlord-Tenant Affairs, Lyon said he thinks many people just accept the increases or decide to leave.

“It’s affecting where people live,” he said. “These big companies — they can’t be trusted to just do the right thing.”

Stephanie Joslin, a spokeswoman for AIR Communities, acknowledged that some tenants have received large rent increases, including the 59 percent increase the company offered Lyon last year. She said in an emailed statement that AIR Communities has made substantial investments in the property over the past two years. The average rent increase offered to Willard Towers residents in their lease renewals was 5.5 percent this year, and 75 percent of the building’s residents have chosen to renew, she said.

Some tenants may face larger increases in part because the building offers 24-month leases — a requirement under Montgomery County law — and that longer lease term allows tenants to lock in a lower price for up to two years but can lead to larger increases when it is time to renew.

County officials said writing the regulations, which are needed to allow the county to enforce its anti-rent gouging policy, was slowed by the need to hire new people to lead the effort, set up a new rent stabilization office, and contend with a massive amount of public comments on the regulations.

County Executive Marc Elrich said that flood of feedback in February, largely from landlords and developers who oppose the rent stabilization law, gummed up the process.

“Some of them proposed things that would basically undo what we’re trying to do,” Elrich said.

He said the Department of Housing and Community Affairs took the time to respond to most, if not all, of those comments in an attempt to make sure every stakeholder understood why their suggestions were or were not incorporated into the final regulations. That meant responding to more than 350 pages of recommendations, which took months.

“A lot of landlords, they don’t want this,” Elrich said. “And they’ve used this as a very effective delay tactic.”

Still, Elrich said he is optimistic that the slow, detailed approach taken by DHCA produced bulletproof regulations that he hopes the council will swiftly approve. His administration sent those draft regulations to the council on June 14. The regulations must be reviewed twice by the council’s Planning and Housing committee, which will start with a hearing in July. After a second hearing, the regulations will go to the full council for a final vote.

“We don’t want anybody on the council saying you didn’t listen to people or you didn’t consider what they had to say,” Elrich said.

The delay in getting the regulations passed has frustrated many, including council members who have been eagerly awaiting the final step to implement their legislation. Council member Natali Fani-González (D-District 6), who co-sponsored the legislation that passed last July, said she has received calls from community members trying to understand why they are still facing unreasonable rent hikes.

“Now,” she said, “I can tell families contacting my office that the regulations are finally in my hands to be reviewed with colleagues, expecting approval this summer.”

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