2022 | Politics

Elrich announces plan for 3% cap for rental increases in coming months

Plan detailed at county executive candidate forum at Affordable Housing Conference of Montgomery County

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County Executive Marc Elrich said Friday that his administration would introduce a proposal to the County Council to set a 3% rent cap for landlords for at least another six months.

Elrich announced the proposal — which would likely be in the form of a legislative bill or something similar — at a county executive candidate forum, the last event at the county’s annual Affordable Housing Conference at the Marriott Hotel and Conference Center in North Bethesda. On Sunday, the county’s rental cap for landlords, set at 0.4%, had expired.

That policy had been extended through legislation spearheaded by Council Member Will Jawando late last year, which was supported by the rest of his colleagues. The voluntary rental guidelines are updated each year, based on Federal Bureau of Labor Statistics data and other market factors. 

The rate of 0.4% was a historic low, due to the nature of the data and overall history of the rate, dating back to the 1980s. No other candidates for executive at the forum Friday responded directly to Elrich’s proposal of a 3% cap for at least 6 months. 

During Friday’s forum, Elrich debated with other county executive candidates on numerous affordable housing topics, ranging from proposals for the Chevy Chase Library site and current investments in affordable housing to how Thrive Montgomery 2050 (the county’s proposed update to its general master plan) addresses the issue and other topics.

Democratic candidates who participated along with Elrich were businessman and former health company CEO David Blair, Council Member Hans Riemer, and Peter James, CEO of a technology company. 

Reardon Sullivan, chairman of the county’s Republican Central Committee and a candidate, also participated. Another candidate, Shelly Skolnick — a perennial Republican candidate for local offices in past election cycles, and an attorney who specializes in elder law and adult guardianship cases — was invited but could not attend.

During the forum, candidates sparred with each other on the issues. That included Elrich and Riemer, who have publicly disagreed multiple times previously over the future of affordable housing — and, more generally, future growth in Montgomery County.

Broadly speaking, Riemer and Blair were most supportive of Thrive Montgomery 2050 while Elrich, James and Sullivan were most concerned about the plan’s future impacts on the county.

Riemer said that the plan has been misunderstood and it’s simply meant as a broad vision for how future growth should occur in the county, and would not directly change any zoning countywide. He added that the national Democratic Party, led by President Joe Biden’s administration, is looking to adopt reforms to the country’s housing policy, many of which are in Thrive.

Some of Biden’s initiatives include rewarding more grant money to local jurisdictions that reform land use and zoning, especially when it comes to changing exclusionary land use and zoning policies. The reforms also aim to improve market conditions for “2-4-unit properties, ADU construction, manufactured and modular housing delivery, and smaller multifamily properties.”

Blair agreed that Thrive Montgomery 2050 has plenty of good ideas to address affordable housing. One of his main focuses, he said, is the Shady Grove bus depot — 35 acres of land near Rockville, which is a prime location for affordable housing and a site that should be considered.

Elrich, however, said Thrive could open up areas for development that would not be smart growth, and actually work against efforts to provide affordable housing. Prior master plans tried to create areas available for workforce housing, which Thrive would jeopardize in areas like downtown Bethesda, he said.

“They knew 40 years ago that that housing was needed for [the] workforce population,” Elrich said of previous county planners. “Your rezoning of Bethesda would obliterate that housing … . Just like is happening right now, where affordable units have been replaced by unaffordable units.”

Riemer, in response, said the county executive was painting development with a “negative brush” — and that only 14 housing units have been demolished in Bethesda since the downtown master plan was established in 2017, and more than 1,800 units have been built, 270 of which are affordable.

Other candidates expressed concerns about Thrive. Sullivan said that there hasn’t been enough community outreach to explain the plan, which could have unintended consequences such as costing the county billions of dollars to implement. He added that it could lead to gentrification and upzoning in certain urban areas, like Wheaton.

James agreed with Sullivan that he’s heard from residents that there hasn’t been enough outreach on Thrive. He’s proposed that the county employ a type of online simulator that would allow residents to see how future development proposals would impact their neighborhoods.

“The simulator will compute traffic, parking, impervious surface, stormwater drainage, [impact] on schools, and all those impacts,” James said. “Which, in this county for the last 20 years, we’ve sort of looked at all those infrastructure impacts after the fact.”

Elrich and Riemer also sparred on Elrich’s overall record on affordable housing. Elrich said it’s been difficult for county officials to make progress because of budget constraints — recalling that he had to cut $90 million from his budget proposal during his first year as county executive because of a drop in revenue. The coronavirus pandemic impacted budget decisions during the next two years, he said.

Ultimately, the county needs to ask more of developers when it comes to affordable housing projects countywide, Elrich said. The current moderately priced dwelling unit law requires developers to build just 12.5% to 15% of affordable units with each project, Elrich added.

“We need to broaden the affordability so that we provide — deeper at the low end [of incomes], [and] we need to go higher at the upper end [of incomes],” Elrich said. “We need to require more from the developers,” Elrich said.

He added that at the current rate, if the county built another 40,000 units — which has been recommended by regional planning officials — it would only yield 6,000 affordable units. 

“That’s not enough to handle the 30,000 [affordable units we need] and it doesn’t include the [affordable] units we’re losing today,” Elrich said. 

Riemer, however, rattled off various initiatives passed by the council that Elrich has opposed, either by voting “no” as a council member or by using his veto power as a county executive on bills. One of them, he said, was a bill offering tax incentives to developers who want to build near Metro stations.

Elrich called that legislation a giveaway to developers, saying some of the tax money that could be collected could be used to fund school construction in the county. Blair also said he didn’t support the bill, saying that major companies and developers are looking at job growth, good schools and transit when considering where to locate.

But Riemer defended the bill’s success. It passed 7-2 in 2020, and Elrich’s veto was overridden by a 7-2 vote. 

“It has already gotten results: There is a development across the street at the White Flint metro station that converted from mid-rise to high-rise thanks to our tax incentive, and it’s not the only project that’s moving forward as a result,” Riemer said.

The Chevy Chase Library site also has been a hot button issue for housing advocates in recent weeks. Elrich said his administration initiated a request for proposals that included affordable housing at the site — and that he likely wouldn’t be interested unless a proposal included more than 15% of units that were considered affordable. 

The county executive also noted the library project isn’t in the capital budget until fiscal years 2026 or 2027. But Riemer charged that Elrich would not have moved forward with the project in his budget without housing advocates pushing earlier this year for a proposal at the site.

Sullivan appeared to be supportive of housing at the site, saying it’s a good example of transit-oriented development. It’s important, however, that infrastructure needs are considered when looking at any proposal, he added.

Blair agreed, but said he wanted to make sure the library remained in good condition because libraries serve as a valuable community resource, providing access to the Internet and other social services. But development of the site presents a significant opportunity, he added.

“The Chevy Chase Library is something that we own, and so we need to be aggressive about looking at all of those land parcels that we own, about converting them into affordable housing,” Blair said. “When you own the land, you also can dictate the terms to developers, which is a wonderful thing.”

James was the only one to disagree, saying the county needed to look more at outside-the-box solutions like a personal rapid transit system for people to get around. That system often uses podcars — small personal-use electric vehicles, or guided/railed taxis on separated tracks.

Steve Bohnel can be reached at steve.bohnel@bethesdamagazine.com