Thursday, December 17, 2020

two bills could bring rent control and “missing middle” homes to montgomery county

If you’ve tried to find a home in Montgomery County recently, you know things are rough. The county has a housing shortage, with 23,000 homes needed in the next 10 years. The median home price in the county is a half-million dollars, 14% more than last year. Rents are rising more slowly, but some tenants still received 33% rent increases this year. An estimated 20,000 households are behind on rent due to pandemic-related financial hardship, and could get evicted.

Montgomery County could legalize "missing middle" homes, like this triplex and duplex in Silver Spring, within one mile of Metro stations. All images by the author.

This year, county leaders have hustled to find solutions: capping rent increases during COVID-19, tax incentives to build homes at Metro stations, and getting rid of the housing moratorium, which blocked new homes near crowded schools. Last week, County Councilmember Will Jawando introduced two bills dubbed “More Housing for More People” that could go even further.

One bill would introduce rent control

The first bill would make Montgomery County’s “voluntary rent guideline” or suggested rent increase mandatory for rentals within a mile of stations on the Red and Purple lines, and within a half-mile of Bus Rapid Transit stations.

Montgomery County could institute rent control for apartments near transit, like these buildings in East Silver Spring.

Landlords in those areas wouldn’t be allowed to raise the rent above the guideline, which changes each year. The guideline is based on the Consumer Price Index (CPI), or how the cost of basic needs changes from year to year. This year, it’s 2.6% (or an increase of $52 for a $2000/month rental). For new rentals, the law would kick in after five years.

There are about 200 places in the US with rent control, including the city of Takoma Park and DC, which has about 80,000 rent-controlled apartments. Like Montgomery County, rent increases in both places are tied to CPI, though DC allows increases up to two percent higher, with a cap of five percent. DC’s law also applies only to buildings built before December 31, 1975.

Another bill would make it easier to build duplexes, townhomes, and apartments

The second bill, ZTA 20-07, would allow “missing middle” housing, or duplexes, townhomes, and small apartment buildings in areas where only single-family homes can be built, as long as it’s within one mile of the county’s 13 Metro stations. This bill applies to R-60 zoned lots, which must be at least 6,000 square feet and allow one home and an accessory apartment.

About 5% of Montgomery County's land is set aside for stuff other than single-family homes.

New buildings would have to fit the same standards for height, setbacks, and parking that currently apply to single-family homes, but could have two, three, or more homes instead of one. Within a half-mile of the Metro station, you could build a bigger building with less parking, though not a taller one. The bill would cover about 6% of the county, which doesn’t sound like a lot, but it would basically double the areas of Montgomery County that are zoned for anything other than single-family homes.

Most R-60 lots can be found in close-in places like Takoma Park, Chevy Chase, Wheaton, and Silver Spring and Bethesda (outside their downtowns). Very few homes are being built here, except for large, million-dollar homes that replace older, more affordable ones, because that’s all the zoning will allow. In this fact sheet about his bills, Jawando notes that these regulations were designed to keep neighborhoods segregated and exclusive.

Between 2012 and 2019, nearly all of the homes on this Bethesda street were torn down and replaced with newer, larger ones.

This isn’t the first time somebody’s tried to do this. The bill’s goals are similar to the draft Thrive 2050 plan, which talks about allowing “missing middle” housing in single-family neighborhoods near transit, as well as the new plan for downtown Silver Spring. In March, state delegate Vaughn Stewart’s Modest Home Choices Act would have legalized “missing middle” homes throughout Maryland in affluent neighborhoods near transit with lots of jobs.

If the bill passed, Montgomery County would join a bunch of other places that have opened up single-family zones, including Minneapolis, Portland, Austin, Durham, and Grand Rapids, Michigan, while other places like Arlington and Atlanta are looking into it..

People are mad

It’s likely the rent control bill will upset folks in the business and development community. At least here in Silver Spring, some residents are upset about the “missing middle” bill because it could bring more affordable homes to affluent communities that have long fought them. As with the Silver Spring Downtown Plan, some residents have said inflammatory things about townhomes and apartments (mostly on neighborhood listservs so far), like that they would "destroy" the community. We'll likely hear more from them in the future.

But the bigger question for now is:

Would rent control make homes more affordable?

There are generally two schools of thought in Montgomery County (and other places) about how to make homes more affordable: build more homes, because the shortage of available homes is pushing prices up; or rent control, because the market can’t make homes affordable enough.

Jawando’s two bills say: why not both? “My message with introducing both of these now at a critical time, when people are struggling to stay in their homes, is that we need more housing and we need more affordability for more people,” he told Bethesda Beat.

There’s a lot of debate about whether rent control works. Stanford University found that it can reduce displacement, while several studies argue that rent control doesn’t stop new housing construction. The Brookings Institution found that rent control works in the short term but decreases affordability in the long term, and Brigham Young University notes that it caused developers to convert rentals to condominiums. Takoma Park might be a cautionary tale: it may have lost rentals since rent control began, and apartments haven’t been built in the city since the 1970s.

What about “missing middle” zoning?

Studies generally show that building more homes can lower prices. The Upjohn Institute found that new homes can “open up” affordable homes by luring more affluent people away from them, and NYU notes that new apartments can lower rents in buildings nearby. We’ve seen that in Silver Spring, building thousands of apartments has caused rents to go down with some exceptions.

“Missing middle” homes can be cheaper to build because they use wood-frame construction as opposed to high-rise buildings, which require concrete or steel. In places with high land values like Montgomery County, more flexible zoning means affordable housing builders can actually work there. (Like Habitat for Humanity, who builds really nice townhomes like these in Carroll County or outside Charlottesville or in Denver.)

That said, few homes have been built in Minneapolis since it legalized triplexes in 2019, because banks are reluctant to finance them and city regulations still make them difficult to build. Researcher and GGWash contributor Emily Hamilton says communities need to tweak other regulations in addition to zoning. One good example is Portland, who used height and density rules to encourage building deeply affordable homes that otherwise might not make financial sense.

We have a housing crisis. Let’s talk about how to fix it!

Most officials in Montgomery County seem to agree: the rent is too damn high, and we need to do something about it. In a county that’s becoming more diverse and less affluent, we need to rethink policies that prioritize one type of housing for one type of household. Over the next several weeks, we’ll get to have a conversation about how to do it.

There will be a public hearing for both bills sometime in February. You can sign up to testify for either bill here. After that, the council will have work sessions to discuss and edit each bill, before having a vote sometime in the winter or spring.

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