Tag Archives: rent control

Jawando Ignored Public Information Act, Had Scant Evidence Before Filing Rent Control Bill

One may be the loneliest number, but apparently one documented claim of a rent increase was enough for Councilmember Will Jawando (D-At Large) to introduce rent control legislation that governs the entire county.

When he introduced his emergency rent control bill in response to the pandemic, I made repeated requests to Councilmember Jawando’s office for any evidence he had of rising rents that inspired him to file the bill.

I eventually received a public comment but not a scintilla of hard evidence, so I submitted a formal Maryland Public Information Act (MPIA) request on April 19 via his official email account: “Please consider this a request for any and all documents covered by the Public Information Act you have received related to rent increases during the pandemic. Thank you.”

Cecily Thorne, Jawando’s Chief of Staff, contacted me on April 21 after I wrote my initial post about the lack of evidence or logic “even from an amoral greed perspective” behind the rent control bill. She stated that “Councilmember Jawando asked me to forward some of the information we have been receiving from tenants related to rent increases” and included four redacted pieces of information.

Only one of these documents made a claim of a rent increase that was made both prior to the bill’s introduction and during the pandemic. (Another was notification given prior to the pandemic, while one involved late fees, not rent, and the last one was a somewhat complex situation sent after the bill’s introduction in any case.)

I spoke with Ms. Thorne shortly after receiving the information and told her directly of my MPIA request in the course of our discussion. Nonetheless, my request went completely ignored in violation of the law.

When I followed up on May 30 – after the mandatory 30-day disclosure deadline in state law had passed – Ms. Thorne remembered being made aware of a request (“You mentioned you made a request”), but also texted that “I have not seen one until now in writing” and “I did not receive a request formal from you” despite my having sent it to Councilmember Jawando’s official email and having mentioned it during our call.

The lack of response suggests that either (1) Councilmember Will Jawando’s office is highly disorganized, or (2) unaware of its legal responsibilities under the Public Information Act, or (3) willfully ignored the request in violation of the law. It could also be a combo platter.

Thanks to the efforts of Legislative Attorney Amanda Mihill, I received most, though not all, of the documents late last week. However, Jawando’s office excluded the unredacted copy of a previous document until I made mention that it was missing. Their response still excludes many documents attached to emails in violation of the law.

What’s Not in the Documents?

Despite Councilmember Jawando’s media claims, he had virtually no documentation that this was occurring before he decided to file the bill. Although Cecily Thorne stated that the emails she sent were only “some of the information,” the documents sent show otherwise. There was literally only the one claim mentioned above.

There are no copies of phone records listing people who called with complaints. Nor is there any evidence that the Councilmember’s staff contacted the landlord.

The only other evidence within the documents involves a few back and forth strategy emails with the Renters Alliance in which Councilmember Jawando says “as many examples as you can send will be helpful ahead of bill introduction.” The reply references only increases being seen in the same building as the sole complaint from a renter.

One case.

No wonder Councilmember Jawando was unresponsive to queries on this topic from not just myself but others despite the claims he made in the media.

Glass Bill Provides Meaningful Help

Fortunately, the Council took other action to address the larger problem, which is that many people who have lost their jobs, if only temporarily, cannot pay regardless of the level of rent.

The Council passed legislation introduced by Councilmember Evan Glass (D-At Large) that, among other provisions, appropriated an additional $2 million in rental assistance. This money helps people facing eviction directly. The county has also loosened the requirements to receive rental assistance in light of the ongoing crisis.

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Time to Bag Jawando’s Rent Control Bill?

Montgomery County Councilmember Will Jawando (D-At Large) introduced legislation to temporarily suspend the county bag tax and enact rent control to respond to the COVID-19 crisis. The first has already bit the dust and it looks increasingly like the second should too.

Bag Bill Bagged

Councilmember Jawando introduced a bill to suspend the county bag tax during the health crisis. Though cosponsored by all of his colleagues, except Councilmembers Evan Glass (D-At Large) and Tom Hucker (D-District 5), the bill received a lot of pushback.

Much like Councilmember Hans Riemer’s (D-At-Large) bill to allow businesses to suspend payments for alcohol to the county monopoly, it faced the problem that bonds are tied to the revenues. Additionally, the environmentally-focused Sierra Club was not happy.

In a rare story for a bill sponsored by seven of nine members, it was on the fast track to defeat instead of passage. Most would have let the bill die quietly at this point. Mystifyingly, Jawando chose instead to announce a full retreat by declaring victory:

Councilmember Will Jawando plans to withdraw Expedited Bill 17-20, Carryout Bag Tax Suspension after working collaboratively with members of the community. . .

County Health Officer Dr. Travis Gayles recommends “a number of strategies for using reusable bags including washing them between use, customers packing their own reusable bags at check out and frequently cleaning surfaces in baggage areas.”

In addition, the Department of Environmental Protection has agreed to work on a campaign and resources to remind consumers to wash their reusable bags that can be posted at grocery stores and retail establishments.

Jawando can trumpet his success in finding an “alternative solution” but it sure sounds suspiciously like the status quo.

Rent Control: A Solution in Search of a Problem?

Now, Councilmember Jawando is pressing ahead with a rent control bill that is scheduled to have a hearing on April 21 (tomorrow) and a full council vote on April 23 (Thursday).

Jawando has explained to the media that his office has received “multiple reports” of rent going up 20, 30, 40 percent. He also expressed concern that at the end of the crisis that “You’re going to see people try to raise rents to get out people who can’t pay. And then you’re going to see a spike in evictions and then you’re going to try to bring people in at higher rents to recoup the loss.”

As Adam Pagnucco previously reported, the chambers of commerce have pushed back very hard on these claims:

We were deeply disappointed by the reckless statements you made. . . claim[ing] that landlords were instituting 20 – 40 percent rent increases during COVID-19.

The most offensive premise of the interview was the impression that rent gouging was a rampant and widespread issue. We were taken aback by these allegations and reached out to our landlord members to determine if any of them had implemented of that magnitude. To the contrary, we learned that none of our members reported any rent increase, let alone a 20 – 40 percent increase.

The claim that widespread rent hikes are now happening makes no sense.

No landlord wants to lose a regularly paying tenant now even if they have to make some adjustments and take some losses. There is no guarantee you can fill the vacancy and you certainly won’t be able to do so until this crisis ends.

If anything, rents may fall as demand declines due to mass unemployment. So much for recouping losses by jacking up rents, which is just not how rental markets work. Landlords can only charge what the market will pay.

If a landlord tries to raise rents now, tenants can just not pay due to the moratorium. Such a mean and stupid landlord may well be out even more rent as well as all of the time and expense of evicting someone once that is again legal. The landlord then also loses yet more rent due to the time it takes to fix the place up again, if needed, and to find a new tenant.

Jawando’s specific claim that landlords will raise rents in order to evict non-paying tenants makes even less sense as that will not allow a landlord to evict their tenant any more quickly. If anything, the tenant will appear even more sympathetic to landlord-tenant court judges who will be very disinclined to evict anyone during the immediate aftermath of this crisis anyway. Remember that evictions are a lengthy legal process.

In short, if it doesn’t make any sense even from an amoral greed perspective, is this really happening on a widespread basis? It might be better to explore specific situations and address any bad actors on an individual basis. I wouldn’t think landlords would want to be publicly exposed as raising rents right now.

In an email response to my request for specific information, Jawando stated that his bill “supports” landlords and tenants alike:

Some landlords have thankfully already decided not to impose the burden of a rent increase on their tenants during this time . . . The intention of Bill 18-20 supports the action of these landlords while protecting other tenants whose landlords have not made a similar decision.

The idea that his bill “supports” the vast majority of landlords who have not increased rent is bizarre in light of the response of the chambers of commerce pushing back on this bill as a broad smear of how landlords have responded to the crisis.

Despite repeated requests, Jawando has not produced an iota of concrete evidence that this has occurred let alone a widespread problem that requires fast-track legislation:

Some of the tenants who have contacted our office are nervous about coming forward to the media as you might imagine, however when I introduced the bill, I did share several cases with increases ranging from 9% – 60%.  

Except big claims and major legislation require hard evidence that should be made public. At the very least, Jawando could have by now produced redacted letters if such notices of rent increases are being distributed widely in some buildings. Regardless, any documents he has are public as he received them in his capacity as a councilmember.

Jawando’s bill has already been through several iterations, first excluding then including then excluding again commercial properties from the bill. These changes further suggest that the facts regarding the problem it is intended to solve are not known. At the very least, they aren’t being made public. Right now, all we have are unsupported anecdotes from the bill sponsor.

If this is a widespread problem, Jawando’s bill may be an appropriate response. If not, the Council should move along to address may of the other pressing problems that the county will face during and after this crisis.

The Council’s unanimous effort to fund the production of cloth masks to make sure all county residents have access to them is a much better example of good use of their time. My applause to all councilmembers for supporting this effort. More please.

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Commercial Property Removed from Rent Control Bill

By Adam Pagnucco.

In another twist to MoCo’s rent control saga, commercial property has been removed from Council Member Will Jawando’s rent control bill.

The original draft of the bill posted on the council’s website did not distinguish between property types, but because it added language to a section of law covering housing, it did not cover commercial property.

Yesterday, a new draft of the bill showed up online explicitly including commercial property. I took a screenshot of that version proving commercial property’s inclusion.

Today, a third version of the bill now excludes commercial property. It also narrows the definition of public emergency to just a “catastrophic health emergency,” a change sought by Council Member Nancy Navarro and made in the second version of the bill. The third version language below has removed all mentions of commercial property. In his verbal comments on introduction, Jawando confirmed that it now applies only to residential property.

So what happened? After the second version showed explicit coverage of commercial property, the business community erupted in outrage. The chambers of commerce representing the county, Silver Spring and Bethesda sent the letter below regarding statements made by Jawando about the bill.

Bruce Lee, President and CEO of commercial property owner Lee Development Group, made the statement on Facebook below. Lee is a member of the boards of the county and Silver Spring chambers.

What has the chambers, Lee and others in the business community upset are Jawando’s claims made in this video that he has received multiple reports of rent increases of 20%, 30% and 40%. In his remarks at the bill’s introduction, Jawando alleged that tenants in the following properties had been notified of the following increases.

The Gallery in Bethesda: 35% rent increase
Quebec Terrace in Long Branch: 9% rent increase plus late fees
The Grand in North Bethesda: 14-60% rent increases

Jawando will no doubt be called on to prove the existence of these increases.

Jawando said the Department of Housing and Community Affairs is hearing about this “every day.” He also offered praise for other landlords such as Southern Management and Wilco for working with tenants rather than imposing large rent increases.

It’s typical for bills to go through multiple drafts before introduction. That’s the result of feedback and the gathering of co-sponsors and is a normal part of the legislative process. But that usually goes on before a bill is published on the council’s website. In this case, because the bill addresses an issue that the lead sponsor believes is urgent, the bill has been changed in real-time online. I have been writing about county politics off and on for 14 years and I don’t remember the last time I saw the same hyperlink leading to three different versions of the same bill over three days prior to formal introduction. That means that, depending on when one viewed the council’s website, a person could have seen one of three versions of the bill and drawn very different conclusions about it. That confusion has stirred even more controversy than this bill might normally generate.

With four council members listed as sponsors (Jawando, Navarro, Craig Rice and Sidney Katz), only one more vote will be required for passage. Expect amendments to be considered.

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New Version of Jawando Rent Control Bill Covers Commercial Properties

By Adam Pagnucco.

A few days ago, I reported on a bill to be introduced by Council Member Will Jawando that would prohibit rent increases during public emergencies. There has been some discussion about whether Jawando’s bill covers commercial properties. The short answer is: it may not have originally, but it does now.

In my original post on April 9, I described the bill’s provisions. It prohibits rent increases during public emergencies and also prohibits notices of rent increases extending to 30 days after the end of emergencies. I also said, “The bill does not distinguish between residential and commercial properties.”

On April 11, it was brought to my attention that while the bill does not mention property types, it adds language to a section of county law that regulates housing. I updated the original post with this statement:

Update: The bill adds language to Section 29 of the county code, which regulates landlords and tenants in the context of housing. Sec. 29-3(b)(1) states that the purpose of Section 29 is “to simplify and clarify the law governing the rental of dwelling units.”

Just an hour ago, I heard that a new version of the bill was online explicitly extending its provisions to commercial properties. That is apparent from the language in its transmission memo, which now states, “Expedited Bill 18-20 would prohibit the increase of residential and commercial rents during and after the current catastrophic health emergency declared by the Governor, prohibit certain notices of rent increases, and require certain notices to tenants.”

The change is also apparent from the language in the new draft of the bill which is now online. The bill now expands its definition of covered landlords and tenants to include “an individual or legal entity that leases a building, or portion of a building, for use or occupancy as a for-profit or non-profit business, including a sole proprietorship.” The relevant language is reprinted below.

Another change is that Council Member Nancy Navarro has been added as a co-sponsor, joining lead sponsor Jawando and original co-sponsors Sidney Katz and Craig Rice.

The bill refers to itself as a “rent stabilization” bill but by conventional definitions that is inaccurate. Rent stabilization ordinances typically allow rent increases but limit them to set percentages. This bill prohibits rent increases, at least during public emergencies. That is typical of rent control, which provides for hard limits on rent. Accordingly, from this point forward, I will be describing this as a rent control bill.

Expect a fight over this legislation.

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Jawando to Introduce Emergency Rent Stabilization Bill (Updated)

By Adam Pagnucco.

Council Member Will Jawando plans to introduce a bill on Tuesday providing for rent stabilization during states of emergency. The bill would take effect during a state of emergency or a catastrophic health emergency declared by the governor or a state of emergency declared by the county executive. Once the relevant emergency is active, landlords would be prohibited from enacting rent increases. Further, landlords are prohibited from notifying tenants of rent increases during the emergency and within 30 days of the expiration of the emergency. The bill does not distinguish between residential and commercial properties.

Council President Sidney Katz and Council Member Craig Rice are listed as co-sponsors.

It’s worth noting that evictions are temporarily suspended in both Montgomery County and the State of Maryland. But those suspensions say nothing about rent.

The text of Jawando’s bill can be found here.

Update: The bill adds language to Section 29 of the county code, which regulates landlords and tenants in the context of housing. Sec. 29-3(b)(1) states that the purpose of Section 29 is “to simplify and clarify the law governing the rental of dwelling units.”

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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.

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Should There Be Rent Control Near the Purple Line?

By Adam Pagnucco.

Council Member Marc Elrich, who recently equated potential gentrification near the Purple Line with “ethnic cleansing,” is taking flak for his remarks and is not backing down.  We will leave it to others to judge his choice of words.  But what interests us is the policy proposal he has made: specifically, Elrich would like to see rent control imposed near Purple Line stations.  That’s worth discussing.

Economists tend to disagree on many issues but a huge majority of them oppose rent control.  Liberal New York Times columnist Paul Krugman has written, “Almost every freshman-level textbook contains a case study on rent control, using its known adverse side effects to illustrate the principles of supply and demand.”  A massive review of economic research on rent control found evidence that it encourages conversions of rental units into condos and leads to higher rents in non-controlled units.  Rent control repeal in Cambridge, Massachusetts led to a surge in property values in both controlled and non-controlled units and a 20% increase in housing investment.  Even Communists denounce rent control.  In 1989, Vietnamese Foreign Minister Nguyen Co Thach told a news conference that rent control did more damage to his capital city than American bombs.  “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.”

One need not go to a Communist nation to observe the effects of rent control.  MoCo has a good example of that policy right here at home: the City of Takoma Park, which passed a rent control law in 1981.  We examined U.S. Census data to analyze how the city’s housing stock compares to the county’s.  Below we show that just 10% of the city’s housing was built in 1980 or later, much lower than the county’s percentage of 47%.  That’s not a fair comparison since the city is much older than the vast majority of areas in the county.  However, other older areas inside the Beltway like Downtown Bethesda (27%), Chevy Chase (20%) and Downtown Silver Spring (26%) have much higher percentages of their housing built in 1980 or later than Takoma Park.

It gets worse.  Takoma Park has been losing rental housing units for years.  Below we show the city’s total, owner-occupied and renter-occupied housing units in 2000, 2010 and the five year period of 2011-2015.  During that time, the city’s total housing units fell by 4% and its renter-occupied units fell by 18%.  Owner-occupied units increased by 10% and vacancies rose by 30%.  No housing policy that produces double-digit losses in rental units can be described as good for renters.

Takoma Park’s housing decline is not going to turn around soon.  According to the site plans, preliminary plans and sketch plans listed on the MoCo Planning Department’s development tracking map, only two housing projects with a combined seven units are pending in Takoma Park.  Those units are all single family, which are exempt from the city’s rent control law.

This extract from the Planning Department’s site plan map shows the huge contrast in development plans between Takoma Park and Downtown Silver Spring.

The implication of all this is clear: housing developers are steering clear of Takoma Park’s rent control law.  These folks are not going to be any more enthusiastic about rent control near Purple Line stations.  Why does that matter?  When it comes to building new housing, there are basically three options.  First, you can build it near transit.  Second, you can build it away from transit, thereby incurring the associated congestion and environmental costs.  Or third, you can try to block it from being built, and that’s one probable effect of rent control.  But that won’t stop population growth – instead, it will result in overcrowded housing, unsafe living conditions and code violations.  (Such phenomena are not unknown in some areas of the county.)  Rent control near the Purple Line just encourages options two and three.

Finally, the Purple Line is a huge investment, costing at least $2.65 billion to construct.  Only an insane society would pour billions of dollars into a transit project and then stop new housing from being built next to it.  Even Vietnamese Communists would agree.

Disclosure: Your author is a long-time supporter of the Purple Line and is a publicly listed supporter of Council Member Roger Berliner for Executive.

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Elrich: Without Rent Control, Purple Line Will Cause “Ethnic Cleansing”

By Adam Pagnucco.

In response to a question about just cause eviction and rent control at the Progressive Neighbors County Executive forum, Council Member Marc Elrich stated that the Purple Line would cause “ethnic cleansing” without a rent control law.  Elrich said:

I support rent stabilization and I think we need to be honest with ourselves about this.  If we throw up our hands about this and say the market will determine the price of housing and the market alone will determine that, then we are going to wipe out neighborhood after neighborhood in Montgomery County.  If you did that, then if you did not put rent stabilization around the Purple Line stops, for example, then the neighborhoods around the Purple Line will not continue to exist.  They will be bought, they will be repurposed and they will go to other people.

When we did the Long Branch plan, and Park and Planning came in and said we want to rezone all the existing housing in Long Branch, I accused the Planning Board of ethnic cleansing.  And I said some people do it with the gun, you guys are doing it with the pen but the truth is those folks would be gone and they would be gone forever…

Elrich’s remarks begin at the 2:29 mark of this video taken by Ryan Miner.

Disclosure: Your author is a long-time supporter of the Purple Line and is a publicly listed supporter of Council Member Roger Berliner for Executive.

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