Bilkers and scofflaws take note! Sell a rental property in Takoma Park without mentioning to the buyer that, oh, by the way, this city has rent control, and you are GOING DOWN, brother (or sister)! Disclosure of that fact is now the law. Failure to disclose can void the contract.
The law was passed by the Takoma Park City Council March 12 with a one year statue of limitations, so it can be tweaked or discarded, just in case unintended consequences develop – as they so often do.
Following the vote, the council discussed other aspects of the proposed rent stabilization (rent control) law revisions.
They began by drawing. The question was where to draw – where to draw the line on rent control exemptions. The current law exempts landlords who own only one rental until in the city, and accessory apartments in owner-occupied dwellings.
Dr. Kenneth Baar, the consultant hired by the city to study the rent stabilization law and recommend changes thought there was too much opportunity for hankie pankie in those exemptions, and urged the council to base them instead on the number of units in a building. Dr. Baar, by the way, was included in the discussion via speakerphone.
So far, so good, as the council considered the implications of drawing the exemption line at 1-2, 3, 4, or even 6 units per building. As the number goes higher, a larger number of rental units slips out of rent control. If the line were drawn at 1-2 units only 75 units would be exempt. If it were drawn at 4, 368 would lose rent control. If it were at 6 units 700 would be dropped.
The concerns were, at this point, how many units would continue to be affordable.
It was a frightening (but instructive) moment as the council picked up speed and zoomed up the onramp marked “To Hell, westbound.” But an unearthly, disembodied voice guided them to the nearest exit.
Suddenly the council got creative. Now when people such as writers or painters or composers have one of these “hey, I’ve got an idea” moments, the results are usually at least mildly entertaining. When politicians have a moment like that, the best course is to grab the nearest fire-hose, turn it on to full pressure, and clear the city council podium.
As the exemption numbers were being tossed around like tiny souls in the hands of the gods, Councilmember Colleen Clay voiced the idea of charging exempted units an annual fee of $300 each. The fee would go to a fund that would aid in preserving affordable housing. She said it was sort of a payment in lieu of taxes. The idea took hold and soon the discussion changed from worrying about how many units would no longer be affordable to how much revenue could be raised – a mere $120,000, for 2 $200,000 for 4.
The Mayor, bless her heart, expressed mild disgust at this turn of events, reminding everyone that the purpose was to preserve affordable housing, not raise revenue. Clay pushed back, saying the moneys raised were to aid affordable housing. With a logic right out of Karl Rove’s brain, she asserted that the more they reduced the number of affordable units, the more aid they could give affordable housing.
But the fee idea was running lose through the council’s collective brain and before you could say “The Road to Hell” they started talking about how to prorate the fee based on the number of bedrooms. Staff person Sara Daines, Director of Economic and Community Development tried to point out that this might lead to unintended consequences, such as walls being torn out of rental units to make them all into one-bedroom units. Confirming the number of bedrooms in a unit would be a task as difficult and subject to perfidy as is confirming whether dwellings are owner-occupied and as subject to
All objections were road kill as the council picked up speed and zoomed up the onramp marked “Hell, westbound,” fine-tuning as they went the sub-sub paragraphs of the new law’s pro-ration clause that was forming in their minds.
Almost lost in the engine’s roar was the tinny, disembodied voice of reason – Kenneth Barr beseeching the council via speakerphone not to make it so complicated. His reason prevailed. He guided them to the nearest exit ramp.
Dear Readers, you can bet the council will impose a fee on exempt units, but likely they will keep it simple, not prorated.
As to where to draw the Line of Exemption, 4 was popular. Clay proposed it, saying that after discussions with staff and other council members it seemed a number that that included most of the folks worthy of exemption – “amateurs” who rent to subsidize their mortgages, not professionals who make all their money from building management. It is also the number HUD uses, she said.
Councilmember Bruce Williams supports 4, as does Joy Austin-Lane. Terry Seamens recused himself, as he is a landlord.
Mayor Porter prefers 1-2 units, saying that most likely limits it to the target “amateur” landlords, but she acknowledged 4 was popular.
The council discussed other points of Dr. Baar’s proposal.
Councilmember Seamens felt it was unfair that all landlords, including the ones who make their tenants pay for utilities, should be allowed a rent increase based on 100% of the Consumer Price Index (CPI), which included utilities. He was more in favor of allowing an 80% increase and adding on to that a utility increase allowance for those who pay their tenants’ utilities. Most of the council admitted this seemed just, but they were concerned that it was too complex (yes, this is the same bunch that caught Complex Fever over the exempt unit fee idea, go figure).
Councilmember Clay championed simplicity, citing the specter of more boarded up rental buildings, condo conversions, and lawsuits if the laws are made too complex for rent-control-oppressed landlords to deal with. Mayor Porter said the one boarded up rental building Clay eluded to was not boarded up because of rent control. Councilmember Reuben Snipper chimed in that the rate of condo conversion in the city was the same as that found in the rest of the county. So THERE. Clay shot back that condo conversions in the city and the county are driven by different issues. Mayor Porter put corks in everyone’s mouths and got back to the discussion.
The council also didn’t like the idea of allowing an extra boost in the rent to those landlords whose rents had been low for a long time (as is done to keep a desirable tenant). They thought this was taken care of by other means and again they didn’t want to make it too complex.
The mayor ended the session saying, to groans from the council, “This will not be the last discussion of this topic.”