Rent stabilization shaped Takoma Park. Housing conditions are forcing a rethink.

The apartment Omar Myers found in the tidy Washington suburb checked almost every box: big enough for a growing family, near relatives and listed at a price the architect could afford as his wife took a break from work.

The Myers family would live in the three-bedroom unit in Takoma Park for the next 25 years. Rent has increased only modestly each year, from roughly $790 then to about $1,450 now. Utilities included.

Takoma Park’s rent stabilization ordinance, which controls how much property owners and landlords can raise the rent each year, kept monthly bills predictable as Myers’ children grew up and went to college. In the famously liberal city, permissible rent hikes are tied to the consumer price index, which typically rises around 4% annually in the Washington area.

Now those signature tenant protections — the first of their kind in Maryland, one of a few states where rent stabilization exists — are under review by the mayor and City Council. The housing debate is pitting neighbor against neighbor.

“A lot of people who live in rent-controlled buildings would not be able to live in Takoma Park,” Myers said. “Where else are they going to move? Further and further out.”

Consultants hired by the city late last year have concluded Takoma Park’s low-rent program succeeds in keeping the city diverse with respect to race, ethnicity and income. But their report found it might worsen housing availability and the quality of rentals. Some political leaders have voiced an appetite for changing the stabilization ordinance.

The Takoma Park City Council, all Democrats, voted last month to move ahead with a review of the tenant protection in the coming months.

Mayor Talisha Searcy, also a Democrat, has promised rent stabilization will not end on her watch but said her administration may modify the ordinance to better accommodate landlords and owners. In an interview, Devin McNally, the city’s housing director, said it hopes to strike the right balance.

To chip away at rent stabilization, said Randy Gibson, a former City Council member, is to chip away at the premise of what Takoma Park proclaims to be.

“It’s the single most important law that both created and sustains our diverse community,” said Gibson, now a member of the Community Vision for Takoma advocacy group that wants to preserve the ordinance.

‘Berkeley of the East’

Takoma Park, population 17,542, adopted its rent stabilization ordinance in the early 1980s. It remains one of two municipalities in Maryland to have one. Some counties, including its parent, Montgomery County, and Prince George’s County, have adopted similar, though less generous, tenant protections.

Known affectionately by its nicknames, “Granola Park” and “Berkeley of the East,” Takoma Park notably declared itself a “nuclear-free” zone in 1983, and in 1985 it became one of the nation’s first sanctuary cities for immigrants.

Around the country, rent stabilization exists only in a handful of states, including California, New York, New Jersey and Oregon. But the measures have become popular among tenants’ rights activists and some housing wonks who argue that, as costs soar, rent stabilization can shield renters from price gouging, inflation and homelessness.

Without stabilization, rents can rise rapidly and unpredictably, to amounts landlords or pricing algorithms think the market will bear. That makes it hard to plan and save. And periods of high inflation can force people out of their homes or cause them to cut back on essentials.

In Takoma Park, annual rent increases for stabilized properties are tied to the consumer price index for the Washington area, In other words, a 1% index increase equals a permissible 1% increase in rent starting every July. There are few exemptions for buildings.

‘Abject failure’

It’s a divisive concept. Maryland Gov. Wes Moore’s administration, which has advocated for other tenant supports, has been largely dismissive of statewide rent caps, for fear of how they affect homebuilders and landlords in a state that struggles with housing deficits. Opponents say restricting rents hinders production and limits revenues needed for maintenance.

“It’s been tried and tried, and everywhere it’s been an abject failure,” said Brian Gordon, senior vice president at the Apartment & Office Building Association of Metropolitan Washington, which represents housing providers. “It has undoubtedly and massively contributed to the dearth of new housing in the city.”

There have been no new multifamily buildings in Takoma Park since the late 1970s, city officials believe, and Gordon and others said that’s because builders tend to opt out of areas they perceive as hostile to development. Instead, homebuilders have descended upon Northern Virginia, Gordon said, especially over the last decade.

In 2019, as part of Takoma Park’s 10-year housing and economic strategic plan, the council agreed to assess rent stabilization.

To some, the study came at the right time. Americans increasingly face housing insecurity, pay more for food and utilities and can’t afford to buy homes, in large part due to supply shortfalls. Maryland is on track to record its worst year of new home construction since the Great Recession.

“We have such a shortage that it’s incumbent on us to increase the supply of housing,” said Carter Dougherty, a 15-year Takoma Park resident who owns his home.

The self-described housing advocate supports a review of the ordinance. “Without greater supply, there’s no way we’ll wrap our arms around affordability,” he said,

Destabilizing stabilization

Takoma Park’s commissioned rent stabilization study, by RSG Inc., found mixed evidence that the ordinance is directly stifling more housing.

Although new construction in Takoma Park has declined significantly since 1980, other factors, such as land availability, have played a role, the consultants wrote.

The analysis found slower rent growth, lower unit turnover, longer occupancy rates and more predictable rental costs than the broader market. A majority of Takoma Park renters are people of color, the research showed, and generally earn lower incomes than homeowners.

What especially alarmed the mayor and others was rent stabilization’s possible negative impact on housing quality. Data showed a disproportionate number of code violations and tenant complaints in rent-stabilized buildings, compared with other Montgomery County rentals.

A majority of Takoma Park tenants had low or no confidence they could find comparably priced housing in the city, an indication that there aren’t enough of these units, the review found. Property owners, meanwhile, told researchers they wanted more flexibility to increase rents to pay for maintenance and upgrades.

David Illes, president of Longford Management, who testified on behalf of a rental property called the Paragon, told the City Council at a hearing in June he worries about the cost of urgent repairs needed for the building’s 1957 original elevator.

The ordinance allows landlords to petition the city if they want to raise rents more than allowed under stabilization. But many don’t take advantage of it, city data shows, with landlords reporting it to be cumbersome and confusing.

People on both sides of the stabilization debate agree the petition process could be streamlined.

There’s division over a consultant suggestion to extend the exemption period for new buildings from five years to 10 or more. Another idea is to ditch the consumer price index tie and set a minimum and a maximum that landlords can charge.

Marc Elrich, a former Takoma Park council member whose term as Montgomery County executive ends in December, told lawmakers at the June hearing they ran the risk of tinkering with the law until it became toothless.

“You have tools to deal with the problem that you’re trying to identify,” Elrich, a Democrat, said. “I would ask you not to sacrifice the other stuff in order to get there.”

A two-bedroom apartment for $1,400

Across the country, landlords face rapidly escalating construction prices, insurance costs and interest rates, said Mark Willis, senior policy fellow at the NYU Furman Center for Real Estate and Urban Policy, which has studied rent stabilization.

Inflation has hit the real estate industry hard, Willis said, and building owners with modest rent levels and limited revenue growth might be too cash-strapped to continue the same levels of repair. That can increase the maintenance backlog and make mundane problems more urgent.

“How do we keep the system going to the best advantage of the tenants, and how does it work for owners who need more revenue to be able to properly maintain their properties?” Willis said. “If you don’t allow them to do the right thing, you can’t be surprised if things don’t go well.”

Sasha Bondarev, a musician and music teacher, moved to Takoma Park in 2020 thanks to rent stabilization.

Bondarev said he earns about $30,000 a year and had struggled to find and keep housing; he moved about five times from 2012 to 2020.

Now his rent is what he considers a manageable $1,400 for a spacious two-bedroom with hardwood floors that’s near his children.

His neighbors, from a variety of racial and ethnic backgrounds, run Takoma Park’s shops, restaurants and healthcare offices — the working class, Bondarev said. Many, like him, rely on only one income to pay the bills.

To lose rent stabilization in its current form would change the character of the city, Bondarev said.

“It will kick some people out of this area,” he said. “People will have to move.”