Rental Housing Reality Check
Part VI of a six-part series analyzing the state of rental housing in Suburban Maryland.
The state of Suburban Maryland’s rental housing market post-pandemic is decidedly negative. Over the last five years, rental housing providers have been faced with:
- Extreme inflation and sharp increases in operating expenses
- Market and policy constraints on revenues
- Heightened delinquency and reduced access to legal remedies through elongated court timelines
- A string of hostile state and local policies resulting in a layering of new administrative costs and regulatory compliance burdens on housing providers
All of this has combined to create an inhospitable environment for the operators of our existing rental housing stock – many of whom are now struggling to merely maintain operations – and has driven away new investment.
In stark contradiction to our acknowledged housing supply shortage and stated housing production targets, policy decisions have rendered Suburban Maryland uncompetitive with surrounding jurisdictions like Northern Virginia, resulting in Maryland being redlined by the very investors we seek to attract.
In spite of high interest rates and increases in construction costs, other jurisdictions have seen relatively level investment in new rental housing development. Montgomery and Prince George’s County, on the other hand, have seen a sharp drop-off in new apartment construction.
The bottom line: The regulatory environment directly impacts our capacity to expand our housing supply. If we truly wish to meet our housing production goals and foster long-term housing affordability for our community, policymakers must address the foundational regulatory and policy factors that contribute to the struggles of housing providers and drive investors away.