Summary
The Prince George’s County Council recently approved the Rent Stabilization Act of 2023 (Act), which limits residential rent increases to 3 percent for the next year. Separately, the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) issued a Request for Information (RFI) to determine how algorithms used in tenant screening may result in discriminatory outcomes.
The Upshot
- Prince George’s County Executive Angela Alsobrooks is expected to sign the Act into law.
- While the Act has an effective period of one year, the County Council plans to develop a more comprehensive and long-term approach to affordable housing.
- The RFI encourages the submission of comments and information by tenants, prospective tenants, tenants’ rights and housing advocacy groups, and industry participants (including property managers, commercial landlords, and individual landlords) by May 30, 2023.
The Bottom Line
Landlords should be aware of the requirements under this Act as well as monitor the results of the CFPB/FTC inquiry.
Yesterday, the Prince George’s County Council approved the Rent Stabilization Act of 2023 (Act) which limits residential rent increases to 3 percent. The vote was held following a lengthy public hearing with vocal input on both sides. It is expected that Prince George’s County Executive Angela Alsobrooks will sign the bill. The Act will take effect 45 days after it is signed.
By its terms, the Act is a temporary measure, limiting rent increases to 3 percent for a one-year period beginning on the effective date of the Act. The Act includes two exemptions: (1) properties constructed in the last five years, and (2) affordable housing subject to a federal, state, or local support program. Landlords must notify tenants to disregard any rent increase notice provided prior to approval of the Act that would otherwise take effect after the effective date of the Act, and this requirement is not limited to increases in excess of 3 percent. The Department of Permitting, Inspections and Enforcement may impose fines in the amount of $500 for a first violation, and $1,000 for any subsequent violation of the Act.
While the Act has an effective period of one year, the County Council has indicated that it will use this temporary period to develop a more comprehensive and long-term approach to the County’s affordable housing issues. Landlords should be aware of the requirements under this Act as well as additional requirements that may be forthcoming in Prince George’s County and other jurisdictions in the region.
Separately, the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) issued a Request for Information (RFI) yesterday, seeking comment on “background screening issues affecting individuals who seek rental housing in the United States, including how the use of criminal and eviction records and algorithms affect tenant screening decisions and may be driving discriminatory outcomes”. Comments in response to the RFI must be received by May 30, 2023.
The RFI follows the White House’s release last month of a “Blueprint for a Renters Bill of Rights” (Blueprint), which set forth principles intended to “create a shared baseline for fairness for renters in the housing market” and directed various federal agencies, including the CFPB and FTC, to take various actions to further those principles. Among those actions was the issuance of RFIs “seek[ing] information on a broad range of practices that affect the rental market.
The RFI encourages the submission of comments and information by “tenants, prospective tenants, tenants’ rights and housing advocacy groups, industry participants (including property managers, commercial landlords, individual landlords, and consumer reporting agencies that develop credit and tenant screening reports used by landlords and property managers to screen prospective tenants), other members of the public, and government agencies.” The RFI is divided into the following four sections that each contain a series of wide-ranging questions:
- tenant screening generally;
- criminal records in tenant screening;
- eviction records in tenant screening; and
- using algorithms in tenant screening.
We will continue to monitor both of these new actions and provide updates when available.
Related Insights
Subscribe to Ballard Spahr Mailing Lists
Get the latest significant legal alerts, news, webinars, and insights that affect your industry.
Subscribe Copyright © 2024 by Ballard Spahr LLP.
www.ballardspahr.com
(No claim to original U.S. government material.)
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.
This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.