Montgomery County Considers Suspending Residential AND Commercial Rent Increases

Posted By: Nicola Y. Whiteman, Esq. Headlines ,

Councilmembers Will Jawando, Sidney Katz and Craig Rice will introduce Expedited Bill 18-20, Landlord-Tennant Relations – Rent Stabilization During Emergencies. The measure proposes to suspend residential and commercial rent increases during the emergency declared by Governor Hogan on March 5, 2020. The original draft of the  bill did not include commercial properties.
COMMERCIAL MEMBERS:  Councilmember Jawando added commercial properties to the bill. It is critical for commercial members to share information with AOBA on: (1) what actions  are being taken to work with tenants in need of relief; and (2) concerns with applying this language to commercial properties.

RESIDENTIAL MEMBERS: In order to address member concerns with the legislation, AOBA has prepared amendments to address member priorities such as: (1) deleting any reference to “rent stabilization;” (2) revising the definition of emergency under the bill; and (3) adding a May 1 effective date. The changes are summarized below. Please note that we are working on language clarifying when housing providers can notice and take rent increases following the emergency. AOBA will circulate draft amendments. Members should note that this bill is being considered on an expedited schedule. 

COUNCIL ACTION/FAST TRACK: Following the April 14 introduction, the bill is tentatively scheduled for a public hearing and Council action on April 21.

MEMBER ACTION: Please contact Nicola Whiteman with any questions or comments on the proposed legislation. Members should also continue updating AOBA on measures to assist tenants including providing information on any Federal, State or County resources. AOBA continues to inform the County about your ongoing efforts as community partners.

OVERVIEW AOBA DRAFT AMENDMENTS (“The following is based on residential rent increases. AOBA will follow up once we review the commercial provisions.*)

  • Delete the reference to “rent stabilization.” As with recently adopted DC emergency law, refer to the measure as the COVID-19 public health emergency. Any reference to “rent stabilization” will be viewed as an opening to rent control.
  • Rent increases/notices:
    • Effective date/Rent increases: The measure will apply to rent increases that would take effect on May 1 and during the emergency (as now narrowly defined). The goal is for this to apply prospectively.
    • Notices of rent increases: Revised, consistent with the language above to reference the May 1 date. AOBA will further amend to address when housing providers can begin increasing rents.
  • Notice of expiration of emergency: The AOBA amendment would direct DHCA, upon expiration of the Governor’s State of Emergency, to provide notice of the expiration of the emergency and the date that 30 days following that emergency.
  • Small housing provider assistance: The AOBA amendment would direct DHCA to conduct a public outreach campaign to this community which might be source of any reports of rent increases.
  • Rental Assistance Program: Consistent with prior AOBA communications, directs the County Executive to report to the Council on funding of the County’s Rental Assistance Program and other financial assistance available to tenants affected by the COVID-19 emergency
  • Transition Date: In an abundance of caution, added language reinforcing that the rent increase/notice of rent increase provisions take effect on May 1.
    • COMMENT: Note that Councilmember Jawando has accepted Councilmember Navarro’s recommendation to add an amendment which is a sun set provision that the suspension ends when the current health emergency if lifted.   
      In communications on March 20 and April 1, AOBA informed local officials, including the Montgomery County Council and County Executive, of the specific relief needed by renters and housing providers and concerns with any rent freeze as that idea gained momentum in this area and across the country. AOBA also informed the Council and the County Executive that the majority of the County’s rental housing stock are NOT experiencing rent increases. AOBA member companies, which collectively represent approximately 60,000 of the County’s estimated 83,769 rental units, have already proactively and voluntarily committed to their residents that they are:

      • Suspending rent increases;
      • Creating payment plans for residents who are unable to pay their rent because of the outbreak and waiving late fees for those residents;
      • Suspending initiating eviction proceedings:  While we understand the state and courts have suspended evictions, housing providers are mindful of how filing an action could cause additional stress for the many residents and families who reside in our communities; and
      • Encouraging residents to contact their property manager if they are unable to pay rent or need of a payment plan