DC/Maryland Multifamily Alert

Happy Holidays to all. We are still hopeful that Santa brings everyone some relief from rent control and other multifamily restrictions (we heard that the new BEPS Regulations preclude Santa from leaving coal for legislators who have been naughty!) As a follow-up to our most recent alert, here are some updates on rent control and other activities in the region impacting multifamily properties:

Rent Control Coalition

Over 30 Rent Control Coalition members had a robust discussion on December 14, 2023 relating to Ballard Spahr’s legal analysis of the new Montgomery County rent control law and our continued monitoring of pending rent control cases before SCOTUS. We also discussed advancing efforts aimed at making the Montgomery County rent control law and other multifamily laws and regulations, less problematic. If joining this effort is of interest to you, please let us know.

Urban Land Institute Washington (ULIW) Executive Conversation on Rent Control

Rent control continues to be a significant concern for the multifamily industry, as existing laws are implemented and additional jurisdictions ponder new rent control measures. As part of its Executive Conversations series for Full Members of ULI, Ballard Spahr will host a program at our DC office (1909 K Street NW) on February 7, 2024. Breakfast will be served at 8:00 AM followed by conversation and Q&A until 9:30 AM. Our featured guest for this program will be Montgomery County Council President, Andrew Friedson. This program provides an opportunity to discuss the prospect of better informed legislation. Full Members of ULI (and their guests) may register using this link.

Howard County Housing Multifamily Bills

The Howard County Council heard testimony on Bill 43-2023 on November 20, 2023, a proposal that would allow the County to assign its statutory right of first refusal (ROFR) to qualified entities. The Council did not discuss Bill 44-2023, which proposes to limit rent increases to the lesser of 5% plus inflation, or 10%. During a subsequent County Council meeting on December 4, 2023, discussions on both Bill 43-2023 and Bill 44-2023 were tabled until the next legislative session scheduled for January 2, 2024.

Hyattsville Rent Control

On December 4, 2023, the Hyattsville City Council authorized the City Attorney to draft a rent control ordinance. The Council stated that the ordinance should meet the following rent stabilization goals:

• Require the City Administrator to set a maximum allowable annual rent increase (MAARI) equal to the annual percentage increase in the Washington-Arlington-Alexandria, DC-VA-MD-WV Consumer Price Index for All Urban Consumers (CPI-U).
• Regulate the MAARI and other fees associated with rental properties, including but not limited to utilities, parking, amenities, and pets.
• Exemptions to include properties less than 15 years old, buildings with 4 or fewer units, and subsidized units.

Further details are included in this September 2023 Hyattsville Rent Stabilization Study.

Do Right by DC Tenants Amendment Act of 2023

Councilmember Janeese Lewis George introduced B25-0574, the Do Right by DC Tenants Amendment Act of 2023 (Do Right Bill), on November 15, 2023, which aims to prevent landlords with multiple outstanding Class 1 or Class 2 infractions from obtaining or renewing business licenses or obtaining building permits until twelve months after the infractions have been resolved. The Do Right Bill was referred to the Committee on Public Works and Operation, and the Committee of the Whole on November 21, 2023, and is currently under Council Review.

DC Fairness in Renting Clarification Amendment Act of 2023

On November 28, 2023, D.C. Law 25-65, Fairness in Renting Clarification Amendment Act of 2023 (the Rent Clarification Act) was enacted. The Rent Clarification Act amends the Rental Housing Act of 1985 to limit the amount of fees and housing deposits that a housing provider can collect, clarify when the housing provider may issue the notice of eviction, and increase the notice period for rent increases from 30 days to 60 days.

Maryland Building Energy Performance Standards (BEPS) Regulations

The Maryland Department of Energy (MDE) proposed BEPS regulations under the Maryland Climate Now Solutions Act of 2022 on December 15, 2023.  The proposed regulations mandate a reduction in state-wide greenhouse gas (GHG) emissions (i) by 60% from 2006 levels by 2031, and (ii) to attain net-zero statewide GHG emissions by 2045. If enacted, the BEPS regulations would impose GHG emissions standards for commercial and multifamily residential buildings of 35,000 square feet or more served by the same electric or gas meter. The proposed BEPS regulations would also require owners to disclose to prospective buyers if the property is subject to BEPS regulations and to provide related benchmarking records and documentation. There will be a virtual public hearing on the proposed BEPS regulations on January 18, 2024 at 10 am, and public comments will be accepted throughout the day. Copies of the proposed action and supporting documents are available for review on the MDE website.

Federal Trade Commission (FTC) New Proposed Rule on Junk Fees

On November 28, 2023, Ballard colleagues Alan Kaplinsky, Roger Winston, and others presented a webinar titled, “The Biden Administration’s ‘Junk Fees’ Initiative Continues: What the Latest Actions Mean for the Consumer Financial Services and Multifamily Industries”. Launched in January 2022, the Biden Administration’s initiative, directed at combatting so-called “junk fees”, shows no signs of abating. During this this webinar, we discussed the Administration’s latest salvo of actions, including “junk fees” imposed on rental housing tenants. Because the existing deadline for public comment falls immediately after the holiday season, the Commission has now extended the public comment period for 30 days, until February 7, 2024.

Should you have any questions or wish to provide any input on any of these matters, please contact us at CondoMultifamilyTeam@ballardspahr.com.

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