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Rent Control Is Coming To Maryland

February 18th, 2013 · 7 Comments

Update

The rent control bills Below did not pass.

Rent Control in Maryland/Rent Control In Baltimore

I occasionally get asked f there is rent control in Maryland or in Baltimore.   Currently neither Maryland nor Baltimore have rent control.   Often I talk to people who believe there is rent control in Maryland.  In some ways I am a little surprised,  as Maryland and even more so Baltimore, is very liberal.  Fortunately for both landlord and tenants there is no rent control.  Studies prove rent control reduces both quality and quantity of housing.  More importantly the benefits of rent control often do not go to the very people it is intended to help.

Rent Control is Introduced in Maryland  Annapolis State House

The Maryland House of representatives has introduced House Bill 315   proposing rent controls and Just cause evictions. This is a serious encroachment on our property rights.  The bill limits rent increases to 5% and requires there to be a “Just Cause” to remove a tenant from a property.  Simply choosing not to renew a lease is not an option.

On the surface, today a 5% increase may seem reasonable.  It would be easy to say this is not a real problem for landlords.  Yet it is a serious problem.  What happens when inflation is 10% but you can only raise rents 5%.  What happens if you rents are well below market and you finally realize you need to catch up to market rates?  What happens when you buy a property with a tenant that has low rent?  You will not be able to bring the rent up to market rates.  This will hold down property values on tenant occupied properties.  That’s just what we need now, more government interference to hold down property values.

Just Cause Evictions

One issue that comes up regularly, primarily from delegates from Montgomery county, is  “Just Cause Evictions”.  These  Morons Delegates  want a law that says there needs to be a “Just Cause” to remove a tenant from a property.  Obviously the landlord needs to follow the lease and there already needs to be a just cause to remove a tenant.  However the new law limits the reasons you can remove a tenant to 11 specific reasons.  It would appear that the landlord choosing not to renew a lease is NOT one of the reasons allowed.

Gee is it possible they left out some legitimate reasons.  Anyone who has been a landlord for a while knows it is perfectly legitimate to get rid a of a tenant that is an Asshole. But that would not be allowed.  By law you would have to renew your lease with bad tenants.  How about a breach of lease?  Can you remove a tenant if they breach the lease?  Well the new law says only if it is “substantial”.   Although Rent Control is more likely to get the attention of landlords,  “Just Cause” is probably a greater infringement of our property rights.   The problem is the term just cause is used to push through a policy that is anything but just.

 

Blame the Politicians

This bill is proposed and or sponsored by delegates; Hixson, Cullison, Gutierrez, Hucker, Kaiser, Luedtke, and A. Miller.  It is interesting to note that every one of these morons is from Montgomery County.  It is sad that we don’t require that you need to be able to pass an economics test to be elected.  Obviously the group above can’t.

You Can Help

There are three things you can do to help

  1.  Write, email or call, The delegates above or those on the Environmental Matters Committee which is hearing the bill.
  2. Come to the hearing for the bill to testify.
  3. Join the Property Owners Association.  This helps fund a lobbyist to fight for real estate investors and address all the anti-landlord bills that come up regularly.

A hearing on this bill is scheduled for Thursday 2/28/13 at 1:00.  If you have never testified before the legislature it is easy.  It is important to have a good turnout, whichever side you are on.  If all you do is show up and take ten seconds to say I am against the bill, it will help.   If you get  good feeling that you have done your civic duty when you vote, you will get the feeling ten fold by testifying.

Update On rent control hearing location

House Office Building

House Office Building
6 Bladen St.
Annapolis, MD 21401

Downtown Annapolis Map

Find your Legislators here

Find Maryland legislators by Name.

Find Your Legislators by Your Address

 Why rent control does not work

I wanted to add more to this post about how counter productive rent control is.  However in the interest of time I will simply refer you to a great and well researched blog post by Morgan Politan.   Why rent control l doesn’t work.

What do you think of rent control?  Leave a comment.  – Thanks, Ned

Tags: Landlording · Law and Regulations · real estate

7 responses so far ↓

  • 1 Yury // Feb 19, 2013 at 10:59 am

    Ned, thanks for bringing this up. This is really REALLY scary. Do you know if any of the local groups (REIA’s and LL associations) are doing anything about it?

  • 2 Ned // Feb 19, 2013 at 2:15 pm

    Yuri, I heard of this via e-mails send out by MARIEA and the Baltimore REIA. So at least they are aware of it and sending out e-mails to get people to testify at the house hearing. I have a call in to the President of the Property Owners Association to see if he thinks the bill is going anywhere.

  • 3 Yury // Feb 21, 2013 at 11:34 am

    Thanks Ned. Thanks for the update.

  • 4 Phil M // Feb 28, 2013 at 3:50 am

    I am a new investor in real estate and was looking at inner Baltimore to buy, rehab and rent out. While obviously I do this for commercial reasons, there is great social benefit in having many of these homes fixed up and having reliable tenants occupy them. The community is built up and thus a virtuous circle is created. Rent control puts a major brake on that virtuous circle being created.

    While I would prefer to invest in my own state, if rent control is going to be introduced in Maryland, I will take my investment dollars and put this to work in other states thank you very much!

  • 5 Ned // Mar 1, 2013 at 9:35 am

    Phil,

    Thanks for replying. I will send your reply along with my notes to the committee considering this bill. Fortunately I don’t think this bill has much chance of passing. If you are serious about investing i Baltimore city, keep reading. I will pass an update about the status. – Ned

  • 6 jeff // Jun 18, 2013 at 1:05 pm

    When wil we know if this passes

  • 7 Mark @ mortgagesbymark.com(new comment) // Jan 13, 2014 at 1:30 am

    Can’t believe people still believe price controls work. Look at what’s happening down in Venezuela. Because inflation is skyrocketing (a result of gov’t policies) the gov’t imposed price controls on a variety of things. Once product hits the shelves, it gone – and much of it is being shipped over the border to neighboring countries and sold for a profit. Price controls just lead to scarcity, whether it’s food or rentals. Stupid, stupid policies. It seems like there’s enough historical examples of these kinds of policies not working, but brain dead legislators still continue to enact them.
    Mark @ mortgagesbymark.com´s last blog post ..A Mortgage Pro’s Tips On How to Shop for Mortgage Rates And Get a Really Great Deal

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