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Developers and property managers tell Senate panel rent control and related rules are deterring investment
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Summary
Large landlords and developer groups told the Judiciary Committee that recent tenant-protection measures and county‑level rent stabilization policies have reduced sales and investment in Maryland multifamily housing, raising concerns about future production and building maintenance costs.
Developers, property managers and industry associations told the Judicial Proceedings Committee on Jan. 21 that county‑level rent stabilization and other recent statutory changes have discouraged investors, hampered refinancing of older properties and complicated building management.
Tom Cole of the Maryland Affordable Housing Coalition and Aaron Greenfield of the Maryland Multi‑Housing Association said their organizations represent developers, owners and managers who support tenant protections but are worried about the cumulative regulatory burden. They said demand-side dynamics (low vacancy) and financing conditions (higher interest rates) already constrain production, and that added regulatory uncertainty deters institutional equity and lenders.
Representatives of several large regional owners described the local effects. Chris Brew, president and CEO of Donahoe Companies, said institutional equity has “zero interest” in investing in Montgomery County since local rent stabilization passed, and that multifamily transaction volume and starts in the county lag regional peers. He said falling asset valuations reduce property‑tax receipts and transfer taxes, and can lead some owners to surrender property to lenders rather than recapitalize under more constrained terms.
Arianna Royster, Borger Residential, and other operators described rising operating costs — particularly insurance, labor and energy — and warned that building retrofit mandates could be unaffordable, especially for older affordable properties. Industry witnesses said building‑energy performance standards (BEPS) and sprinkler retrofits can require heavy up‑front expenditures (they cited illustrative figures from local technical reports) and that a gap between required capital and allowed rent increases makes cost recovery difficult in rent‑regulated jurisdictions.
Speakers also said vacancy‑control provisions (limits on resetting rent between tenants) and a large increase in the eviction‑filing surcharge can change owner behavior: some managers file less frequently to avoid repeated fees, which they argued could leave unpaid balances to accumulate and pose collection challenges. Several industry witnesses urged lawmakers to account for local permitting, tax and fee interactions when crafting statewide policy.
Why it matters: Industry testimony frames one side of a core policy tradeoff — protections for existing tenants versus incentives for production and maintenance. Developers argue that if financing and resale values decline, fewer projects will be built and preservation of older stock will be harder.
Ending: Committee members asked for more datasets on two issues the industry raised — county multifamily sales volumes and the effect of rent stabilization on permit and financing flows — and invited continued dialog between advocates, local governments and the business community. Quotes used in this article come from industry witnesses who testified at the Jan. 21 hearing.
