Rent Stabilization (a policy modeled on Montgomery County’s Bill 16-23)

for a Fairer Housing Future in Frederick, Maryland

Currently, building affordable homes in Frederick City/County is a slow and challenging process.

• Between 2018 and 2023, rents in Frederick County rose 33%, while median incomes grew only 23%. 
• Nearly 47% of renters now spend more than 30% of their income on housing, qualifying as cost-burdened, and 23% spend over 50%, a level that threatens financial survival.
• Over 20,000 households, especially those working in food service, sales, janitorial, and administrative support, can't afford Frederick's median rent of $2,750 per month (for all rental units) on their current wages. This median rent is 24% above the national average.

Benefits of Rent Stabilization for Frederick

• For places like Frederick County, where rents are rising faster than income and over 20,000 households are rent-burdened, a balanced policy with development incentives and strong tenant protections can stabilize Frederick's communities without stifling growth. 
• Rent stabilization is not just a housing policy; it's an investment in economic equity and neighborhood resilience.
• It would prevent the displacement of working families, seniors, and young adults while ensuring a fair and livable return for landlords. 
• It's a controlled system designed to slow runaway costs, preserve community integrity, and buy time for longer-term affordable housing development, such as zoning reform and public-private partnerships.
• A rent stabilization bill modeled after the one in Montgomery County, described below, is necessary because nearly half of renters are already overburdened, and essential workers are being priced out, having to move in with relatives or leave the county.

Montgomery County's Rent Stabilization Policy (Bill 16-23) 

• This landmark legislation, Maryland's first permanent rent stabilization law, passed in 2023, offers a compelling model for Frederick City and County, where the unchecked rent increases push thousands into housing insecurity. 
• It caps annual rent increases at the lower of 6% or the Consumer Price Index plus 3% (currently 5.7%). 
• It is a balanced approach that supports housing stability and security without stifling the housing market.
• It offers a multitude of benefits for both tenants and landlords and is a more effective solution than traditional rent control.

For tenants, it provides:

• A fair, flexible, balanced, and practical approach that facilitates rent predictability and affordability.
• The protection of tenants' rights, including the prevention of excessive tenant fees, limits on excessive fees, eviction safeguards, and protection from unjustified rent hikes in "Troubled" properties.
• The ability of families, seniors, and workers to stay in their homes and communities helps to reduce displacement.

For landlords, it provides:

• The ability to apply for temporary surcharges to cover capital improvements and petition for additional increases if their return on investment is too low. 
• A critical element in increasing long-term supply is exempting properties under 23 years old, which preserves incentives for new development and encourages continued housing construction.
• Allowance for modest rent surcharges to fund capital improvements.
• Fair return petitions if landlords aren't meeting basic profitability.
• Development encouragement by exempting new construction (under 23 years).
• Exclusion for small landlords with two or fewer units.

For both tenants and landlords, it provides:

• Community engagement is a vital component that educates both renters and landlords about their rights, the reporting processes, and compliance expectations, helping to build trust and accountability.  
• Transparent oversight to ensure tenants and property owners understand the rules and participate fairly.

Potential Challenges and Obstacles

While critical for housing affordability and beneficial for tenants and landlords alike, to implement successful rent stabilization, Frederick's policymakers will need to carefully anticipate and manage potential challenges and obstacles, including:  

Legal and Political Pushback/Property Owner Opposition

• Landlords and real estate interest groups argue that rent caps infringe on their ability to earn fair returns or maintain their properties.

Reduced Housing Supply Incentives 

• Developers may be less willing to build rental housing in jurisdictions with rent caps, particularly if they fear future profit may be limited.
• Property owners may convert rentals to condominiums or withdraw units from the rental market, thereby shrinking the supply.

Maintenance and Quality Concerns 

• Landlords might defer maintenance or avoid making improvements if they feel capped rents won't cover rising operating costs.
• Even with "capital improvement surcharges," landlords may be reluctant to invest in long-term upgrades.

Administrative Complexity

• Rent Stabilization requires robust enforcement and oversight infrastructure, including:
• Rent increase registration
• Fair return petition reviews
• Tenant education and legal assistance
• Without proper funding and staffing, the program could fail to deliver protections or create bottlenecks in the appeals process.

Disparate Impacts and Unintended Consequences

• New tenants may face inflated base rents if landlords compensate for limited increases later.
• Higher-income tenants may benefit from rent caps without means-testing, while more vulnerable renters remain unserved.
• Stabilization could protect longer-term tenants while newer renters bear market-rate costs.

Public Perception and Misinformation

• Opponents may misrepresent rent stabilization as "rent control" or a rent freeze, which can cause confusion and erode public support.
• Tenants and landlords alike may misunderstand their rights or responsibilities under the law.

Conclusion

A fairer housing future in Frederick, Maryland, that is resilient, inclusive, and economically thriving in the long term will require a rent stabilization initiative that is fair, balanced, and effective. The Montgomery County Bill (16-23) can serve as a roadmap for Frederick, benefiting both tenants and landlords alike and supporting a healthy rental market in the area.