Back Door Rent Control Bill Introduced at Last Minute

By Adam Pagnucco.

In preparation for months but dropped at the last minute, a local bill now under consideration by the Montgomery County delegation may just bring rent control to the county.  The bill has received scant notice… until now.

MC 15-18 would establish standards of just cause for the eviction of tenants in Montgomery County.  The bill defines just cause as tenant behaviors including not paying rent, breaching the terms of the lease, committing illegal acts on the premises, causing substantial damage, engaging in disorderly conduct, refusing to grant access to the landlord for repairs and inspections and refusing to provide information to satisfy affordable housing agreements.  Just cause would also exist if the landlord is removing the unit from the rental market, recovering it for use by family members or performing work that requires evacuation.  There is also this definition of just cause:

A tenant refuses, after receiving notice, to execute an extension or a renewal of an expired residential lease for a term of like duration and on terms substantially similar to the terms of the prior residential lease.

In other words, a tenant may not be evicted if a lease renewal does not have terms “substantially similar” to the prior lease.  What does that mean?  If a lease contains a rental rate that increases above the prior rate by more than the rate of inflation, is it “substantially similar” or not?  The bill does not say.  It’s possible that if the bill is passed in its current form, a tenant could challenge a new lease with an above-inflation rent hike on the grounds that it is not “substantially similar” to the prior lease.  If the courts agree, MoCo would be effectively subject to rent control.

The circumstances of the bill’s introduction are troubling.  The bill was drafted on October 17.  There was plenty of time for it to be introduced before the delegation’s local bill hearing in Rockville on December 6, which was live streamed and is available for viewing on the county’s video archive.  Instead, the bill was introduced as a late file on February 2 – more than three months after it was drafted.  The hearing in Annapolis seven days later, which was not televised or recorded, had just eight witnesses because there was not enough time to hear everyone who wanted to speak.  (That’s a sharp contrast with the Rockville hearings, which frequently stretch into the wee hours.)

The upper right corner of the bill clearly shows its drafting date as October 17.

We have no position on just cause eviction, but a huge body of research shows that rent control has been a massive policy failure.  Its usage in Takoma Park has coincided with an 18% drop in the number of rental units in the city between 2000 and 2015.  Even a Vietnamese Communist Foreign Minister admitted that rent control there was a mistake, saying, “The Americans couldn’t destroy Hanoi, but we have destroyed our city by very low rents. We realized it was stupid and that we must change policy.”

Bills like this are why we have a legislative process, as lengthy and frustrating as it might be.  It’s entirely possible that this bill’s sponsors do not intend for it to enact rent control.  One of the reasons why we have public input and press scrutiny is to identify unintended consequences in legislation so that they can be remedied and not cause problems later.  When bills are withheld for months and dropped at the last minute, that process is hindered.  Moreover, the delegation needs to consider this: is it fair to ask colleagues to cast a tough vote on something as politically volatile as rent control just months before the election?  And especially under circumstances of introduction such as these?

This bill needs to be withdrawn, reworked and reconsidered next year.  Whatever is done, let’s make sure to get it right.