A city law designed to protect students from high rent and discourage rental homes in the city will be enforced in coming months, officials said, after a state court ruled the law was constitutional last month.
After the city won a lawsuit in 2008 and narrowly triumphed 4-3 before the Maryland Court of Appeals on Aug. 25, city officials said they will be cracking down on illegal rentals throughout College Park.
Officials, who are scheduled to meet privately before a council worksession tonight to discuss the implications of the court’s decision, said they still aren’t sure how many properties they’ll have to target or who will be the members of a new rent stabilization board. Those selected to serve on the board would be charged with judging whether to make exceptions for individual landlords who say the price limits are too burdensome.
Council members say one thing is clear, though: They can now muscle landlords into registering with the city and impose fines for excessive rent.
While some council members — and most of the court — believe this will help improve the vitality of College Park, those in dissent expressed heavy concerns.
Imposing price controls, city officials say, helps cut down on the incentive for investors to turn properties into rentals, which in turn decreases problems associated with transient tenancy, like absentee landlords.
But the dissent argued that the law violated state citizens” equal protection under the law, creating a “favored” class and “unfavored” class of landlords.
Some landlords said that means less affordable homes for students because landlords have less incentive to turn properties into rentals.
Landlord Bryan Mack said proponents of the law “hate students.” But last spring, Mack asked for over $5,000 a month for a 12-month lease for his rental on Beechwood Road.
The law’s author, retired economist and District 2 Councilman Bob Catlin said he thinks creating thousands of new high rise apartment beds in the still-struggling economy may make the ordinance no longer relevant. He said landlords in his neighborhood, Berwyn, can’t charge above the rent cap anyway because the market has driven prices down on its own.
“Whoever is raising their rent has some uninformed students signing leases, because there should be plenty of housing to go around,” Catlin said. “Most of the foreclosures in my neighborhood are rental properties.”
The city council passed the rent stabilization ordinance in 2005, which tied the amount landlords can charge tenants to the value of their properties. Landlords and some students promptly criticized the law, saying it was unconstitutional because it discriminated against landlords of single-family homes and duplexes while excluding apartment complexes.
But some council members still think the law continues to serve a purpose in the short term, even though it may have to be reevaluated in 2012 when it is set to expire.
“When you look at the large amount of rental houses that are residential houses which have been converted, this still seems to be an issue,” said District 4 Councilman Marcus Afzali, a graduate student who rents a house in Crystal Springs.
In fact, Afzali pointed out, students — including Student Government Association president Steve Glickman — spoke out against increasing the rent control cap from 0.6 percent of a property’s assessed value to 0.8 percent in April, saying their rents may increase by hundreds of dollars as a result.
It was that heartfelt testimony that caused Afzali and at least one other council member, District 3 Councilwoman Stephanie Stullich, to vote down the increase.
But even with the law, prices for the city’s most expensive properties remain high.
Apartment complexes are still charging as much as $900 per month for a single student. Many homes in Old Town became rental properties before the law’s inception in 2005. In that case, city code says landlords are not bound by their property’s assessed value and may continue charging whatever they were at the time the law went on the books.
Some properties in Old Town are charging $6,000 or more per month for a single-family home, which city code says only five unrelated students may live in.
Catlin said it’s possible that the increases were generous enough to make that kind of price legal for older rental properties.
On whether the law may decrease the number of student rental properties in neighborhoods, both Catlin and Dave Dorsch, former chairman of the now-defuct College Park Landlords’ Committee and Old Town property owner, think the slow economy is more of a barrier.
“People aren’t buying homes anyway,” Dorsch said.
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