Reply to MoCo Rent Control Bills

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]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.

[b]Landlords only owning 2 units or less are exempt.[/b]

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

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

As long as you own it directly. If you own it through an LLC you have to obey the rent law. [/quote]
*as long as you expose yourself to personal liability[/quote]

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

Taking rental units off the market will cause regional rent rates to increase.[/quote]

Adding rental units to the sales market will cause regional purchase prices to decrease. [/quote]

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.[/quote]

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. [/quote]

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/

[/quote]

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. [/quote]

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.[/quote]

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