Subject
title
Housing Strategies Work Session: Stability
end
Department
Housing and Community Development
Recommendation
Staff recommends that the Mayor and Council receive the presentation, discuss, and provide direction on strategies related to housing stability.
The following feedback is requested from the Mayor and Council to guide next steps:
• Do you agree that staff should focus on the strategies identified in this work session?
• Are there any other stability strategies that staff should explore?
• What are the outcomes the body would like to see with a Chapter 18 (Rental Facilities and Landlord-Tenant Relations) rewrite?
Discussion
Purpose
The purpose of this work session is to provide the Mayor and Council with an overview of strategies, policies, and programs that the city can pursue to improve housing stability and for staff to receive direction for their work. This is the third of three housing work sessions focusing on supply, subsidy, and stability strategies.
Housing Stability Background
Housing stability strategies keep people housed in affordable, healthy conditions. Policies and programs in this category tend to focus on renter’s rights and affordable housing preservation, which especially benefits low- and moderate-income households. While supply and subsidy strategies can help to improve housing affordability, only stability strategies will ensure fair and equal treatment of tenants. As the city experiences a growing number of tenants, stability strategies will help to reduce displacement and ensure that everyone in the community can reap the benefits of the city’s growth and investments. It should be noted that homeowners can also struggle with stability, especially as it relates to property tax payments and maintaining the quality of their housing.
Research has shown a myriad of benefits associated with housing stability, including better mental and physical health due to less stress and the traumatic experience of being evicted, economic security because households are more likely to be able to keep living in the community where they are already working, educational outcomes since children do not have to move schools and disrupt their learning environment, social connections due to households staying in one place for longer, and community diversity because the families that are first to be displaced are too often disproportionately Black and Hispanic. Conversely, the costs of housing insecurity can be significant. Specifically among young children, housing insecurity is associated with poor health, lower weight, and developmental risk.
Recommended Strategies - Policies
1. Update City Code Chapter 18 (Rental Facilities and Landlord-Tenant Relations).
Chapter 18 is the part of city code that most directly relates to landlord and tenant rights’, and as such would be the primary focus of any legislative changes to address housing stability for tenants. Additionally, staff has identified a list of areas in Chapter 18 that would benefit from further clarity, as well as from being brought into better alignment with the county’s practices, which would improve clarity for both landlords and tenants and provide tenants with additional protections. Reviewing this chapter would also allow the Mayor and Council to consider certain policy changes. As a result of the housing stability work session, staff would like to better understand the outcomes the body would like to see with a Chapter 18 rewrite, such as stronger tenant protections or reduced eviction rates.
The following items are currently in consideration regarding the rewrite:
• Providing clarification in areas of current code that are unclear
• Consider places of alignment with Maryland, Montgomery County, and City of Gaithersburg
o This includes measures to reduce discrimination against formerly incarcerated people and to provide tenants with certain notifications regarding renters insurance, sprinkler systems, and emergency plans.
• Best practices, including but not limited to:
o Mold
o Noise
o Relocation assistance/displacement compensation
o Fees (including but not limited to junk fees, guarantor fees, amenity fees, late fees, technology packages, background check fees, credit check fees)
o Security deposits
o Landlord penalties
o Rental licenses
o Retaliation
o Algorithmic pricing
o Storage after eviction
o Tenant opportunity to purchase
o Air conditioning and heat requirements
o Early termination in cases of domestic abuse
HCD has worked with the University of Maryland, College Park (UMD) School of Public Policy to identify a graduate student who will be undertaking research on best practices and academic research on landlord-tenant policies as their capstone project, which will be completed in the spring of 2025.
2. Create a right to return for redevelopment projects.
A right to return policy would allow residents who have been displaced or who are at-risk of displacement to return or stay in their neighborhood by giving them priority for new affordable housing units or through other assistance. Although this policy could be incorporated into Chapter 18, other jurisdictions have worked to achieve a right to return through resolutions, programs, or a combination of both, rather than changes to local laws, and further analysis would need to be done to determine staff’s recommendation to the Mayor and Council for how to best proceed.
Recommended Strategies - Deploying Subsidies
1. Develop an affordable housing preservation plan.
There are many existing income-restricted affordable housing units with deed restrictions set to expire in the future, as well as naturally occurring affordable homes that are potentially at risk of redevelopment or significant rent increases. Both of these types of losses can be mitigated through various intervention strategies. However, the first step is to better understand the city’s affordable housing preservation needs and best practices for mitigating their loss. Through a housing needs assessment and the capstone project of an additional UMD graduate student, staff will create a more detailed affordable housing preservation plan.
Most interventions are likely to require the use of subsidies. As such, the two following strategies relate to ways to deploy the city’s Housing Opportunities Fund (HOF) - discussed in more detail in the housing subsidy strategies work session - in ways that could preserve existing deed-restricted and naturally occurring affordable housing.
2. Buy naturally occurring affordable housing (NOAH) properties, in partnership with RHE and other non-profits.
Most NOAH properties are owned by private companies rather than mission-driven organizations. Their affordability is typically a result of the property’s age, placing those sites as strong candidates for redevelopment. Such as was done with Scarborough Square, the city may be able to assist a mission-driven organization, like Rockville Housing Enterprises (RHE) or other affordable housing non-profit developers, in purchasing the property and placing affordability covenants on the homes. This can be paired with the city’s right of first refusal and tenant opportunity to purchase. Rockville is a qualified entity in Montgomery County’s right of first refusal law, meaning that when a property is sold, the city has an early opportunity to buy it before it goes onto the open market.
3. Preserve deed-restricted affordable housing by establishing permanent affordability covenants.
Even those homes that currently have an affordability covenant might be at-risk of having the covenant expire within the next several years - leaving residents without an affordable place to live. For example, there are over 150 moderately priced dwelling units in the city whose affordability covenants will expire within the next ten years. In these cases, the city may be able to intervene, convene partners, and deploy resources to extend affordability covenants or assist residents with finding other housing options.
4. Update the city’s homeownership assistance program.
This strategy was discussed more in-depth in the housing subsidy strategies work session, but is also included here as a stability strategy because homeownership traditionally provides more stability than renting due to more predictable monthly mortgage costs. Staff is currently working to redesign the city’s homeownership assistance program, informed by academic research and best practices.
5. Provide additional assistance to renters via the Rockville Emergency Assistance Program (REAP).
This strategy was also discussed previously in the housing subsidy strategies work session, but is also included here because its primary objective is to provide emergency housing stability assistance. Emergency rental assistance prevents evictions and has also been shown to improve recipients’ mental health, especially recipients’ children, as well as increase access to health care and overall health, according to research by the National Low Income Housing Coalition. Staff are currently in the process of redesigning the program to address deficiencies, improve client experience, strengthen relationships with external partners, and better collect data for ongoing program evaluation.
Recommended Strategies - Programs
1. Enhance the city’s home repair/rehabilitation program, with a focus on climate and environmental performance.
The city currently receives funding, routed through Montgomery County, from the federal Community Development Block Grant to do housing and community development projects that benefit low- and moderate-income households or neighborhoods. This funds the city’s home repair loan assistance program. There are additional federal, state, and county grant opportunities that HCD staff would like to pursue in order to expand the rehabilitation assistance the city is able to provide to homeowners and non-profits housing providers, including assistance that would improve buildings’ climate and environmental performance.
2. Supplement the state’s access to legal counsel for evictions program and partner with local mediation services.
In eviction cases, landlords almost always have legal representation, while tenants rarely do. However, when tenants are provided legal counsel, they are two to three times more likely to stay in their homes. According to the National Coalition for a Civil Right to Counsel, there are 17 cities, two counties, and five states that have enacted tenant right to counsel laws - one state being Maryland.
In 2021, the Maryland General Assembly created the Access to Counsel in Evictions Program, through which tenants earning 50% of the state’s median income are provided access to legal representation in eviction and subsidy termination cases. Services in certain jurisdictions began on July 1, 2022 and services will be phased into other jurisdictions, with the goal of statewide implementation by October 1, 2025. There may be an opportunity for the City of Rockville to supplement the state’s program by providing funding to serve residents making 50% of the city’s median income (rather than the state’s median income) and to serve residents earning beyond 50% of the state or city’s median incomes.
Landlord-tenant mediation is another method to prevent evictions before they are filed. A study from the Hawai‘i Appleseed Center for Law and Justice found that 85% of pre-litigation mediation cases resulted in a tenant remaining in their apartment. The city currently provides landlord-tenant mediation services, which could be further leveraged to serve more clients and improve outcomes through partnerships with local mediation services.
3. Pursue partnerships to enforce and affirmatively further fair housing.
The Fair Housing Act prohibits discrimination on the basis of race, color, religion, national origin, sex (including sexual orientation and gender identity), disability, and familial status. Montgomery County’s Office of Human Rights “has developed a comprehensive program of testing for discrimination in the rental or sale of housing, home mortgage financing and compliance with architectural guidelines.” Staff recommend considering partnerships with the county to enhance fair housing testing within Rockville, as well as working with appraisers to create strategies that lessen the appraisal gap.
4. Provide financial empowerment and job training programs.
While housing costs have grown due to inadequate supply, another driving force behind the affordability crisis is wages. The fewer households earning wages that keep up or outpace the growth in housing costs, the worse the affordability crisis grows. Therefore, ensuring that households are able to find good paying jobs can be a strategy for improving housing affordability and stability. HCD is interested in growing financial empowerment, job training, and business development programs, potentially in partnership with Rockville Economic Development, Inc. (REDI) and the City of Gaithersburg’s Financial Empowerment Center.
Recommended Strategies - Partnerships
1. Increase outreach and education to landlords and tenants.
HCD intends to improve proactive outreach and engagement of landlords and tenants in calendar year 2025. Through this initiative, in partnership with the Department of Community Planning and Development Services and the City Manager’s Office, HCD plans to visit apartment complexes, host events and workshops, and create more educational materials to strengthen the city’s relationship with landlord and tenants, as well as improve both parties’ knowledge bases. Staff would also like to explore partnerships, including paid partnerships, with non-profit organizations whose mission includes engaging renters or populations who are disproportionately renters.
2. Work with state and federal partners to increase tenant protections and stability tools.
Every year, the state legislature considers bills on landlord-tenant relations. Statewide policies provide an opportunity for uniformity that benefits both landlords and tenants, as well as for certain policies that municipalities cannot enact without state enabling legislation, such as good or just cause eviction, which requires landlords to provide a valid reason for terminating a tenancy. Additionally, staff can engage the new Maryland Office of Landlord-Tenant Affairs and work to identify state and federal funding, which is critical for supplementing limited city and county resources to preserve affordable housing.
3. Improve/increase partnerships to enhance data and resources.
HCD would like to serve as a convener of the many agencies and organizations who play a role in housing stability. By improving and increasing partnerships with these organizations, the city may be able to enhance programs, data, and client coordination. Examples include partnerships with Maryland Legal Aid, the Sheriff’s Department, Rockville Housing Enterprises, and many more.
Mayor and Council History
Housing is one of the Mayor and Council’s three priority areas. On June 3, 2024 a high-level briefing <https://rockvillemd.gov/AgendaCenter/ViewFile/Agenda/_06032024-7207> was presented outlining the city’s housing crisis and policy landscape. Subsequent work sessions discussed strategies to increase housing supply (September 16, 2024 <https://rockvillemd.gov/AgendaCenter/ViewFile/Agenda/_09162024-7279>) and to provide housing subsidies (October 21, 2024 <https://rockvillemd.gov/AgendaCenter/ViewFile/Agenda/_10212024-7311>).
On July 8, 2024, the Mayor and Council received an introductory briefing <https://rockvillemd.gov/AgendaCenter/ViewFile/Agenda/_07082024-7230> on rent stabilization and voted 5-2 to not further pursue consideration of mandatory hard caps on rental renewal rates.
Next Steps
Based on feedback from the Mayor and Council, staff will finalize ordinances and develop program proposals for approval.