MoCo Rent Control Bills

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Well, Council passed permanent rent control today, with a 7-4 vote. Lots of amendments, explained here.

Rent increases capped at 9%
When a rental vacates, landlords can only raise rent 10% for new tenants.

Rent control won't apply to construction within the past 23 years.

There is an exception if there is substantial renovation that costs the owner 40% of the property's total value.

Landlords only owning 2 units or less are exempt.




https://montgomeryperspective.com/2023/07/18/rent-control-votes/

So I only have 1 condo- this means I can theoretically raise rent 15% a year?

As long as you own it directly. If you own it through an LLC you have to obey the rent law.

*as long as you expose yourself to personal liability

If you don’t like it sell your rental to someone who wants to live in it.

Taking rental units off the market will cause regional rent rates to increase.

Adding rental units to the sales market will cause regional purchase prices to decrease.

People renting starter homes are not usually able to buy an equivalent house even at a discount. A house that costs $1.25mil in Bethesda would rent for $4-5k tops. Some older rentals would be even less than that. That’s almost half of what that same house would cost each month with a mortgage and expenses.

Who said anything about a SFH? PP said condo. And who said anything about current tenants? The unit that becomes available for purchase could be bought by anyone who would otherwise be renting for lack of availability of homes for purchase. There’s no loss of housing stock when something converts from a rental to an owner occupant. It’s still a house.

For many reasons too long to explain here rental housing is not economically equivalent to owner occupied housing. Read the following article to start with if you want a few reasons why this is the case.

https://www.brookings.edu/articles/how-does-the-consumer-price-index-account-for-the-cost-of-housing/

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Well, Council passed permanent rent control today, with a 7-4 vote. Lots of amendments, explained here.

Rent increases capped at 9%
When a rental vacates, landlords can only raise rent 10% for new tenants.

Rent control won't apply to construction within the past 23 years.

There is an exception if there is substantial renovation that costs the owner 40% of the property's total value.

Landlords only owning 2 units or less are exempt.




https://montgomeryperspective.com/2023/07/18/rent-control-votes/

So I only have 1 condo- this means I can theoretically raise rent 15% a year?

As long as you own it directly. If you own it through an LLC you have to obey the rent law.

*as long as you expose yourself to personal liability

If you don’t like it sell your rental to someone who wants to live in it.

Taking rental units off the market will cause regional rent rates to increase.

Adding rental units to the sales market will cause regional purchase prices to decrease.

People renting starter homes are not usually able to buy an equivalent house even at a discount. A house that costs $1.25mil in Bethesda would rent for $4-5k tops. Some older rentals would be even less than that. That’s almost half of what that same house would cost each month with a mortgage and expenses.

Who said anything about a SFH? PP said condo. And who said anything about current tenants? The unit that becomes available for purchase could be bought by anyone who would otherwise be renting for lack of availability of homes for purchase. There’s no loss of housing stock when something converts from a rental to an owner occupant. It’s still a house.

For many reasons too long to explain here rental housing is not economically equivalent to owner occupied housing. Read the following article to start with if you want a few reasons why this is the case.

https://www.brookings.edu/articles/how-does-the-consumer-price-index-account-for-the-cost-of-housing/

That article about the housing component of the CPI basket has nothing to do with market segmentation. There’s a complex interaction between the sales and rental markets but in simple terms removing customers from the rental market decreases demand for rentals, and increasing supply of homes for purchases drives down prices for purchase.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Well, Council passed permanent rent control today, with a 7-4 vote. Lots of amendments, explained here.

Rent increases capped at 9%
When a rental vacates, landlords can only raise rent 10% for new tenants.

Rent control won't apply to construction within the past 23 years.

There is an exception if there is substantial renovation that costs the owner 40% of the property's total value.

Landlords only owning 2 units or less are exempt.




https://montgomeryperspective.com/2023/07/18/rent-control-votes/

So I only have 1 condo- this means I can theoretically raise rent 15% a year?

As long as you own it directly. If you own it through an LLC you have to obey the rent law.

*as long as you expose yourself to personal liability

If you don’t like it sell your rental to someone who wants to live in it.

Taking rental units off the market will cause regional rent rates to increase.

Adding rental units to the sales market will cause regional purchase prices to decrease.

People renting starter homes are not usually able to buy an equivalent house even at a discount. A house that costs $1.25mil in Bethesda would rent for $4-5k tops. Some older rentals would be even less than that. That’s almost half of what that same house would cost each month with a mortgage and expenses.

Who said anything about a SFH? PP said condo. And who said anything about current tenants? The unit that becomes available for purchase could be bought by anyone who would otherwise be renting for lack of availability of homes for purchase. There’s no loss of housing stock when something converts from a rental to an owner occupant. It’s still a house.

For many reasons too long to explain here rental housing is not economically equivalent to owner occupied housing. Read the following article to start with if you want a few reasons why this is the case.

https://www.brookings.edu/articles/how-does-the-consumer-price-index-account-for-the-cost-of-housing/

That article about the housing component of the CPI basket has nothing to do with market segmentation. There’s a complex interaction between the sales and rental markets but in simple terms removing customers from the rental market decreases demand for rentals, and increasing supply of homes for purchases drives down prices for purchase.

I think that is the crux of our disagreement. I don’t agree that if a given renter leaves the rental market by force (evicted because the owner decides to sell) rather than choice that they necessarily will become homeowners in the same regional market. If a tenant is evicted from a $2500/month home located close to DC in Silver Spring they will probably end up having to move to Germantown or Frederick to find another comparable rental home at that price. I’m not sure there are even townhomes for that price in MoCo once you include HOA and other costs.

The local housing market is not a self contained ecosystem. When people are evicted they often have to migrate to another neighborhood or county just to maintain their standard of living.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Well, Council passed permanent rent control today, with a 7-4 vote. Lots of amendments, explained here.

Rent increases capped at 9%
When a rental vacates, landlords can only raise rent 10% for new tenants.

Rent control won't apply to construction within the past 23 years.

There is an exception if there is substantial renovation that costs the owner 40% of the property's total value.

Landlords only owning 2 units or less are exempt.




https://montgomeryperspective.com/2023/07/18/rent-control-votes/

So I only have 1 condo- this means I can theoretically raise rent 15% a year?

As long as you own it directly. If you own it through an LLC you have to obey the rent law.

*as long as you expose yourself to personal liability

If you don’t like it sell your rental to someone who wants to live in it.

Taking rental units off the market will cause regional rent rates to increase.

Adding rental units to the sales market will cause regional purchase prices to decrease.

People renting starter homes are not usually able to buy an equivalent house even at a discount. A house that costs $1.25mil in Bethesda would rent for $4-5k tops. Some older rentals would be even less than that. That’s almost half of what that same house would cost each month with a mortgage and expenses.

Who said anything about a SFH? PP said condo. And who said anything about current tenants? The unit that becomes available for purchase could be bought by anyone who would otherwise be renting for lack of availability of homes for purchase. There’s no loss of housing stock when something converts from a rental to an owner occupant. It’s still a house.

For many reasons too long to explain here rental housing is not economically equivalent to owner occupied housing. Read the following article to start with if you want a few reasons why this is the case.

https://www.brookings.edu/articles/how-does-the-consumer-price-index-account-for-the-cost-of-housing/

That article about the housing component of the CPI basket has nothing to do with market segmentation. There’s a complex interaction between the sales and rental markets but in simple terms removing customers from the rental market decreases demand for rentals, and increasing supply of homes for purchases drives down prices for purchase.

I think that is the crux of our disagreement. I don’t agree that if a given renter leaves the rental market by force (evicted because the owner decides to sell) rather than choice that they necessarily will become homeowners in the same regional market. If a tenant is evicted from a $2500/month home located close to DC in Silver Spring they will probably end up having to move to Germantown or Frederick to find another comparable rental home at that price. I’m not sure there are even townhomes for that price in MoCo once you include HOA and other costs.

The local housing market is not a self contained ecosystem. When people are evicted they often have to migrate to another neighborhood or county just to maintain their standard of living.

Agree that some individual tenants could have bad outcomes but overall the effect is likely to be positive. I’m more concerned about having a healthier market overall, and chasing out rent seekers looking to exploit tenants in old buildings is a positive step. If more units become available for purchase, even better.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Well, Council passed permanent rent control today, with a 7-4 vote. Lots of amendments, explained here.

Rent increases capped at 9%
When a rental vacates, landlords can only raise rent 10% for new tenants.

Rent control won't apply to construction within the past 23 years.

There is an exception if there is substantial renovation that costs the owner 40% of the property's total value.

Landlords only owning 2 units or less are exempt.




https://montgomeryperspective.com/2023/07/18/rent-control-votes/

So I only have 1 condo- this means I can theoretically raise rent 15% a year?

As long as you own it directly. If you own it through an LLC you have to obey the rent law.

*as long as you expose yourself to personal liability

If you don’t like it sell your rental to someone who wants to live in it.

Taking rental units off the market will cause regional rent rates to increase.

Adding rental units to the sales market will cause regional purchase prices to decrease.

People renting starter homes are not usually able to buy an equivalent house even at a discount. A house that costs $1.25mil in Bethesda would rent for $4-5k tops. Some older rentals would be even less than that. That’s almost half of what that same house would cost each month with a mortgage and expenses.

"Home" and "house" are not synonyms.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Well, Council passed permanent rent control today, with a 7-4 vote. Lots of amendments, explained here.

Rent increases capped at 9%
When a rental vacates, landlords can only raise rent 10% for new tenants.

Rent control won't apply to construction within the past 23 years.

There is an exception if there is substantial renovation that costs the owner 40% of the property's total value.

Landlords only owning 2 units or less are exempt.




https://montgomeryperspective.com/2023/07/18/rent-control-votes/

So I only have 1 condo- this means I can theoretically raise rent 15% a year?

As long as you own it directly. If you own it through an LLC you have to obey the rent law.

*as long as you expose yourself to personal liability

If you don’t like it sell your rental to someone who wants to live in it.

Taking rental units off the market will cause regional rent rates to increase.

Adding rental units to the sales market will cause regional purchase prices to decrease.

People renting starter homes are not usually able to buy an equivalent house even at a discount. A house that costs $1.25mil in Bethesda would rent for $4-5k tops. Some older rentals would be even less than that. That’s almost half of what that same house would cost each month with a mortgage and expenses.

Who said anything about a SFH? PP said condo. And who said anything about current tenants? The unit that becomes available for purchase could be bought by anyone who would otherwise be renting for lack of availability of homes for purchase. There’s no loss of housing stock when something converts from a rental to an owner occupant. It’s still a house.

For many reasons too long to explain here rental housing is not economically equivalent to owner occupied housing. Read the following article to start with if you want a few reasons why this is the case.

https://www.brookings.edu/articles/how-does-the-consumer-price-index-account-for-the-cost-of-housing/

That article about the housing component of the CPI basket has nothing to do with market segmentation. There’s a complex interaction between the sales and rental markets but in simple terms removing customers from the rental market decreases demand for rentals, and increasing supply of homes for purchases drives down prices for purchase.

I think that is the crux of our disagreement. I don’t agree that if a given renter leaves the rental market by force (evicted because the owner decides to sell) rather than choice that they necessarily will become homeowners in the same regional market. If a tenant is evicted from a $2500/month home located close to DC in Silver Spring they will probably end up having to move to Germantown or Frederick to find another comparable rental home at that price. I’m not sure there are even townhomes for that price in MoCo once you include HOA and other costs.

The local housing market is not a self contained ecosystem. When people are evicted they often have to migrate to another neighborhood or county just to maintain their standard of living.

Agree that some individual tenants could have bad outcomes but overall the effect is likely to be positive. I’m more concerned about having a healthier market overall, and chasing out rent seekers looking to exploit tenants in old buildings is a positive step. If more units become available for purchase, even better.

The only rent seekers here in this situation are the current renters seeking to keep their rents below market

[Anonymous]

The winners and the losers according to Pagnucco

https://montgomeryperspective.com/2023/07/20/winners-and-losers-of-the-rent-control-battle/

[Anonymous]

Anonymous wrote:The winners and the losers according to Pagnucco

https://montgomeryperspective.com/2023/07/20/winners-and-losers-of-the-rent-control-battle/

pffft

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Well, Council passed permanent rent control today, with a 7-4 vote. Lots of amendments, explained here.

Rent increases capped at 9%
When a rental vacates, landlords can only raise rent 10% for new tenants.

Rent control won't apply to construction within the past 23 years.

There is an exception if there is substantial renovation that costs the owner 40% of the property's total value.

Landlords only owning 2 units or less are exempt.

https://montgomeryperspective.com/2023/07/18/rent-control-votes/

So I only have 1 condo- this means I can theoretically raise rent 15% a year?

As long as you own it directly. If you own it through an LLC you have to obey the rent law.

*as long as you expose yourself to personal liability

If you don’t like it sell your rental to someone who wants to live in it.

Taking rental units off the market will cause regional rent rates to increase.

Adding rental units to the sales market will cause regional purchase prices to decrease.

People renting starter homes are not usually able to buy an equivalent house even at a discount. A house that costs $1.25mil in Bethesda would rent for $4-5k tops. Some older rentals would be even less than that. That’s almost half of what that same house would cost each month with a mortgage and expenses.

Who said anything about a SFH? PP said condo. And who said anything about current tenants? The unit that becomes available for purchase could be bought by anyone who would otherwise be renting for lack of availability of homes for purchase. There’s no loss of housing stock when something converts from a rental to an owner occupant. It’s still a house.

For many reasons too long to explain here rental housing is not economically equivalent to owner occupied housing. Read the following article to start with if you want a few reasons why this is the case.

https://www.brookings.edu/articles/how-does-the-consumer-price-index-account-for-the-cost-of-housing/

That article about the housing component of the CPI basket has nothing to do with market segmentation. There’s a complex interaction between the sales and rental markets but in simple terms removing customers from the rental market decreases demand for rentals, and increasing supply of homes for purchases drives down prices for purchase.

I think that is the crux of our disagreement. I don’t agree that if a given renter leaves the rental market by force (evicted because the owner decides to sell) rather than choice that they necessarily will become homeowners in the same regional market. If a tenant is evicted from a $2500/month home located close to DC in Silver Spring they will probably end up having to move to Germantown or Frederick to find another comparable rental home at that price. I’m not sure there are even townhomes for that price in MoCo once you include HOA and other costs.

The local housing market is not a self contained ecosystem. When people are evicted they often have to migrate to another neighborhood or county just to maintain their standard of living.

Agree that some individual tenants could have bad outcomes but overall the effect is likely to be positive. I’m more concerned about having a healthier market overall, and chasing out rent seekers looking to exploit tenants in old buildings is a positive step. If more units become available for purchase, even better.

The only rent seekers here in this situation are the current renters seeking to keep their rents below market

"The market" is not some abstract thing that exists in isolation. It was a regulated market before this bill, and it will continue to be a regulated market with this bill.

[Anonymous]

It’s strange that they wouldn’t pass the amendment to sunset in 5 years so that the future council could evaluate the efficacy.

I tell you, between this and the difficulties in evicting tenants, as a landlord I’d take care to protect my margins by making sure that my prospective renters are credit worthy. It would be worth paying for full background checks before signing that contract…but I’m not enough of a masochist to be a landlord.

[Anonymous]

Anonymous wrote:It’s strange that they wouldn’t pass the amendment to sunset in 5 years so that the future council could evaluate the efficacy.

I tell you, between this and the difficulties in evicting tenants, as a landlord I’d take care to protect my margins by making sure that my prospective renters are credit worthy. It would be worth paying for full background checks before signing that contract…but I’m not enough of a masochist to be a landlord.

It's not strange at all. Why go to all of that trouble for a bill with an automatic expiration date? There is nothing to stop any future council from evaluating the efficacy without a sunset date.

And since you're not a landlord, it doesn't really matter what you believe you would do if you were a landlord, which you aren't. I am a landlord. Credit/background checks are currently routine. The county even helps small landlords with it. If you don't have good credit/background, you are stuck with slummy landlords who charge you more rent for worse housing.

[Anonymous]

Can county cap the increase of property tax to 6%? With increased assessment value and tax rate in the county, it will help property owners to keep the rent down. By the way, please also keep the increases on the labor cost and prices for everything at homedepots at 6%. We will al live happily afterwards, including the renter, the property owners, the politicians, and the advocates.

[Anonymous]

Anonymous wrote:Can county cap the increase of property tax to 6%? With increased assessment value and tax rate in the county, it will help property owners to keep the rent down. By the way, please also keep the increases on the labor cost and prices for everything at homedepots at 6%. We will al live happily afterwards, including the renter, the property owners, the politicians, and the advocates.

If Home Depot raises their prices by 50%, you can drive 10 minutes to Lowes. If your landlord raises the rent by 50%, it takes a lot more than 10 minutes to find another place to live, move, change your children's school, possibly find another job, apply for public assistance when you lose your job due to the move/commuting distance, etc. Also property taxes are a fraction of a property owner's monthly costs. A 6% tax increase does not equal a 6% increase in their total costs.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Can county cap the increase of property tax to 6%? With increased assessment value and tax rate in the county, it will help property owners to keep the rent down. By the way, please also keep the increases on the labor cost and prices for everything at homedepots at 6%. We will al live happily afterwards, including the renter, the property owners, the politicians, and the advocates.

If Home Depot raises their prices by 50%, you can drive 10 minutes to Lowes. If your landlord raises the rent by 50%, it takes a lot more than 10 minutes to find another place to live, move, change your children's school, possibly find another job, apply for public assistance when you lose your job due to the move/commuting distance, etc. Also property taxes are a fraction of a property owner's monthly costs. A 6% tax increase does not equal a 6% increase in their total costs.

Have you been a home depot or lowes recently? Please tell me if you can find any items that are priced significantly. By the way, homeowner insurance premiums have increased 20-60% during the past years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Can county cap the increase of property tax to 6%? With increased assessment value and tax rate in the county, it will help property owners to keep the rent down. By the way, please also keep the increases on the labor cost and prices for everything at homedepots at 6%. We will al live happily afterwards, including the renter, the property owners, the politicians, and the advocates.

If Home Depot raises their prices by 50%, you can drive 10 minutes to Lowes. If your landlord raises the rent by 50%, it takes a lot more than 10 minutes to find another place to live, move, change your children's school, possibly find another job, apply for public assistance when you lose your job due to the move/commuting distance, etc. Also property taxes are a fraction of a property owner's monthly costs. A 6% tax increase does not equal a 6% increase in their total costs.

Have you been a home depot or lowes recently? Please tell me if you can find any items that are priced significantly. By the way, homeowner insurance premiums have increased 20-60% during the past years.

This is about rent. By definition, NOT "homeowner".