Renters Priced Out of Homes In Heavily Planned Montgomery County (MD)

The Washington Post reports on a new study by a tenant advocacy group in Montgomery County, Maryland arguing that renters are being priced out of homes. The problem is likely to get worse as the economy picks up, demand for housing increases, and the supply can’t keep up with demand.

“It is a sentiment that Montgomery County tenants’ advocates say is becoming more common in a costly housing market where rent increases often soar beyond growth in personal income, according to a report released Friday by the county’s first “tenants work group,” which held four public meetings and commissioned a survey of Montgomery renters conducted by Salisbury University. Montgomery Executive Isiah Leggett (D) appointed the group, made up of tenants and government officials, in 2008.

“The group’s report concludes that Montgomery residents living in about 95,000 apartments, townhouses and rental houses are often priced out of their homes, lose security deposits with little explanation and face eviction for no reason.”

the last comment, that tenants losing their housing “with little explanation and face eviction for no reason,” is a clue to the group’s recommendations. The county government created Tenant Work Group provides few inspired recommendations, even less understanding of how housing markets work, and relies on the conventional, ineffective, and economically disastrous policy proposals that have gutted affordable housing markets in cities for decades: rent controls, restrictions on evictions, and other tenant “rights” proposals.

The Montgomery group’s recommendations include instituting a rent-control law, requiring landlords to have “just cause” before ending a lease and informing tenants about county services that could help them.

This is no mention of the role planning has played in Montgomery County that has the effect of increasing the costs of building new housing to meet rising demand. A far more cost-effective and equitable approach to addressing the affordable housing needs of Montgomery County residents would be to back off the regulatory process and allow “as of right” development of housing in built-up areas without the need for rezoning or zoning approvals.

This is an ideal case of Houston-style development regulation would be more effective than hamstringing the housing market with further regulation. In the long run, the solution is increasing supply, not reducing it.