March 2025 Multifamily Alert, Including Important Legislative and Administrative Developments

With very active legislative sessions in the DMV region, we're providing these updates on proposed legislation and several ongoing efforts impacting the multifamily industry.

Maryland General Assembly Proposals. Among the bills being considered by the 2025 session of the Maryland General Assembly that target the multifamily sector are the following:

• Good Cause Eviction (SB0651) – SB0651 would allow Maryland counties to enact Good Cause Eviction laws that would prevent landlords from declining to renew a lease or terminating a holdover tenancy without showing “good cause.” There has been speculation that Good Cause laws may provide an impetus for removing vacancy controls in jurisdictions with rent control laws, but pursuing Good Cause evictions are often fraught with their own set of problems (D.C. currently has a similar law).
• Prohibition of Algorithmic Pricing (SB0609) – SB0609 would prohibit the use of algorithmic pricing methods (e.g., RealPage), and would make the violation of the act an unfair, abusive, or deceptive trade practice under the Maryland Consumer Protection Act. SB0609 joins other attacks on algorithmic pricing, as we have previously reported. For more information about algorithmic pricing, the new frontier of antitrust law, click here.
• Better Buildings Act of 2025 (SB0804) – SB0804 would add additional requirements to the Maryland Building Energy Performance Standards (BEPS), including energy conservation requirements, electric and solar ready standards for certain buildings, and a requirement that new buildings meet all of the buildings laundry, water, and space heating demands without the use of fossil fuels. Buildings that have undergone significant improvements (improvements costing 50 percent or more of the buildings replacement cost before the improvements) would also have to meet the same laundry, water, and space heating requirements as new buildings.
• Other pending legislation includes: Prohibition of the use of certain criminal history records for prospective tenants (SB0514); condo assessment increase limitations (SB0464); tenant possessions recovery notice requirements (SB0442); the End Hedge Fund Control of Maryland Homes Act of 2025 (SB0582).

We reported on another BEPS bill in our prior Alert. This BEPS bill remains under consideration by committees in both chambers of the Maryland General Assembly, and we will continue to provide updates in future Alerts on the BEPS bill and other bills affecting the multifamily industry.

Proposed D.C. Tenant Opportunity to Purchase Act (TOPA) Amendments. In our most recent Alert, we discussed potential good news for multifamily property owners, investors, and developers in D.C. in the form of proposed amendments to the Tenant Opportunity to Purchase Act (TOPA), as well as the Emergency Rental Assistance Program (ERAP). Details on these proposals can be found here: TOPA Alert. The bill, known as the RENTAL Act of 2025 (linked here), was introduced to the D.C. Council on March 3, 2025, and has been referred to the Committee on Housing for their session March 18, 2025. We have been working with the D.C. Policy Center on informing public officials of the many material adverse consequences TOPA has on housing investment and availability, including affordable housing. Here is a copy of the D.C. Policy Center report and summary: D.C. Policy Center-TOPA's Promises and Pitfalls. We have also been working with the CBRE Research Team on a survey that has been send to over 100 TOPA stakeholders. The results of this survey will be used as part of the TOPA reform efforts.

Montgomery County Troubled Properties Regulations. On February 1, 2025, the Department of Housing and Community Affairs (DHCA) published proposed amendments to the Troubled and At-Risk Properties regulations. DHCA is required to inspect rental properties at least once every three years for housing code violations to determine whether to designate a property as compliant, at-risk, or troubled. Currently, DHCA assigns severity scores for violations (i.e., safety, high, medium, and lower priority), and then uses the scores to calculate a final property score. If a property score is too high, it is designated as at-risk or troubled. For properties subject to rent control, a property designation of at-risk or troubled generally precludes the landlord from raising the rent until the property is subsequently designated by DHCA as compliant. Currently, the process to become compliant is uncertain and may take a long time. Until the property is compliant, the property owner cannot increase rents.

The current proposed amendments relieve DHCA of the requirement to publish a list of violations with an assigned severity score, and allows DHCA to rely solely on the descriptions of the violations that are already in the regulations for assigning severity scores. The proposed amendments still calculate a property’s designation as troubled, at-risk, or compliant based on the Severity of Violations (SV) and Total Number of Violations (TV), but DHCA would set an annual threshold TV and SV score. If a property exceeds either the SV or TV thresholds but not both, DHCA would designate the property as at-risk. If a property exceeds both the TV and SV thresholds, DHCA would designate the property as troubled. The proposed amendments include a 30-day deadline for DHCA to provide property owners with a designation following an inspection. Property owners have the right to request an inspection after their property receives a troubled or at-risk designation; however, the proposed amendments do not include a response or scheduling deadline for DHCA in connection with a requested inspection. Additionally, property owner requested inspections do not change designation of a property, only the DHCA-scheduled “original inspection for the fiscal year” can change a property’s designation. Due to the significant and costly consequences of a troubled or at-risk designation, we recently convened a stakeholders group to express our concerns and seek to have them addressed in a prompt and reasonable manner.

Troubled Properties Stakeholder Efforts. When we recently met with about 25 stakeholders who have been significantly impacted by the troubled/at-risk properties list, we discussed the multitude of issues associated with the County’s use of this list, as well as many options to alleviate some of these issues. We have reviewed the proposed regulations and will be submitting many suggested changes to these proposed regulations this month. If you would like to join existing stakeholders in this effort, please let us know.

Local Maryland Leaders to the Maryland General Assembly. On March 11, 2025, several members of the Montgomery County Council and the County Executive, along with members of the Prince George’s County Council and elected officials of other counties, sent a letter (the “letter”) to the Senate Judiciary Committee of the Maryland General Assembly. The letter was sent in response to the Senate Judiciary Committee considering an amendment to the Good Cause Eviction bill (SB0651), discussed above, that would preempt counties from implementing good cause evictions if rent control laws were already in place and vice versa (i.e., counties could not have both good cause evictions and rent control). The Senate Judiciary Committee expressed concerns that having both good cause evictions and rent control would hurt housing development while Maryland is already experience a housing shortage. The letter claims that rent control laws, “including ones with vacancy control, do not stymie development.” The letter further expressed that having both good cause evictions and rent control would not hurt development either. We have previously shared a Wall Street Journal article (paywall) that has detailed the adverse consequences of rent control. Recently, Adam Pagnucco, a local real estate journalist, writing for the Montgomery Perspective, detailed the consequences of rent control in Maryland, including a financial boycott by many equity investors (article linked here). The letter can be found in Adam’s article linked here.

March 26 Lunch with Montgomery County Council Member Andrew Friedson. In light of the many critically important ongoing issues in Montgomery County, we are hosting in our D.C. office, another ULI Washington Executive Conversation with Andrew Friedson on Wednesday, March 26. Last year’s gathering with Andrew Friedson sold out quickly so you are encouraged to register early. Click this link if you would like to register (if you are not a ULI full member and have difficulty registering, please let us know): ULI Lunch with Andrew Friedson. 

Montgomery County More Housing N.O.W.. On February 4, 2025, Montgomery County Council Members Andrew Friedson and Natali Fani-Gonzalez introduced a legislative package intended to encourage more housing production in the County. The package consists of zoning text amendments 25-02 and 25-03, subdivision regulation 25-01, and expedited bill 2-25. The package would allow more housing types along corridors by allowing duplexes, triplexes, town homes and apartments on properties in specified zoning areas and with frontage along certain road types. The proposed package would allow these additional property types when 15 percent of the units are reserved for workforce housing. The proposed package would also create a new fund for workforce housing incentives, expedite approvals for “high-vacancy” commercial to residential conversions, create a payment in lieu of taxes program (PILOT) for “high-vacancy” commercial to residential conversions, and increase the county’s annual investment in the Homeowner Assistance Program from $4 million to $8 million. The County Council held a hearing on March 11, 2025, to consider the More Housing N.O.W. legislative package.

Prince George’s Senior Housing Rent Cap. Under Prince George’s County’s rent control law, rents for age-restricted senior housing properties are capped at the lessor of the Consumer Price Index for All Urban Consumers for the Washington-Arlington-Alexandria Area (CPI-U) or 4.5 percent. Currently, senior housing properties built on or after January 1, 2000, are exempt from this rent cap. On January 28, 2025, legislation was introduced (CB-006-2025), which would remove this exemption for senior housing, thereby subjecting all age-restricted senior housing to a rent cap regardless of when the property was built. On February 20, 2025, the County Council put CB-006-2025 on hold, but it is unclear if the County Council will bring back CB-006-2025 for consideration in the future. On a national level, the Wall Street Journal recently reported that the senior housing market is likely moving from “glut to shortage” as the U.S. population increases from four million people age 80 years and older to 18.8 million people ages 80 and older by 2030 (article linked here). Laws that serve as a disincentive to investments in senior housing exacerbate the senior housing shortage.

Prince George’s County Permanent Rent Control. The Prince George's Department of Permitting, Inspections, and Enforcement (DPIE) and Department of Housing and Community Development (DHCD) are seeking feedback on permanent rent control in Prince George's County, including the regulations that will become effective on February 1, 2026. DPIE and DHCD held virtual listening sessions on January 30 and February 4, 2025, and presentation slides and recordings from these sessions are here. The County website also includes frequently asked questions related to permanent rent control that are updated regularly. Although no updates were provided as to the timing for publication of draft regulations, DPIE and DHCD have engaged in candid discussions with industry members relating to lessons learned from the recent implementation of rent control regulations in neighboring Montgomery County. If you wish to provide comments, you can email them to PRSAInfo@co.pg.md.us.

Virginia General Assembly. The Virginia General Assembly recently wrapped up its legislative session and sent two bills affecting the housing industry to the Governor to sign into law. As of this writing, the Governor has yet to veto or sign either bill into law, but if the Governor does nothing by March 25, 2025, both bills will be deemed approved and become law.

• Senate Bill 812 (linked) would increase the mandatory waiting period before a landlord can serve a tenant with written notice for nonpayment of rent. This bill would effectively extend the grace period for nonpayment of rent from five days to 14 days. After 14 days, a landlord would be able to serve tenants with a written notice for rent. If Senate Bill 812 becomes law, it will have an effective date of July 1, 2025.
• Senate Bill 1313 (linked) would authorize localities in the Commonwealth to provide for an affordable housing dwelling unit program. All localities would be able to amend their zoning ordinances for affordable housing dwelling unit programs, whereas, only certain localities are currently permitted to do so. If Senate Bill 1313 becomes law, it will have a delayed effective date of July 1, 2026.

We will continue to monitor the legislation and other activities noted above. If you have any questions or comments, please contact us at CondoMultifamilyTeam@ballardspahr.com.