Subject
title
Adoption of Resolution to Establish Maximum Rate of Rent Increase, as Required by Section 18-194 of the Rockville City Code Entitled “Voluntary Rent Guidelines and Notice Requirements of Rent Increases”
end
Department
Housing and Community Development
Recommendation
Staff recommends that the Mayor and Council adopt the resolution.
Change in Law or Policy
This resolution will supersede Resolution 02-24 and establish the 2025 Voluntary Rent Guideline (VRG) at 3.3 percent, which is an increase from the 2024 VRG of 2.6 percent.
Discussion
Per City Code Section 18-194, landlords are encouraged to hold rent increases at the lowest level possible and not more than the percentage established annually by resolution of the Mayor and Council. The Voluntary Rent Guideline (VRG) provides property managers and landlords with a recommended maximum percentage rent increase.
Consistent with previous years, staff has calculated the 2025 VRG based on the Consumer Price Index (CPI) for market-rate rental housing for the Washington-Arlington-Alexandria, DC-VA-MD-WV area. The CPI for market-rate rental housing for the period of January 2024 through December 2024 is 3.3 percent. Accordingly, staff recommends adoption of the attached resolution establishing a 2025 VRG of 3.3 percent with an effective date of March 18, 2025.
Table 1. Calculation for 2025 Voluntary Rent Guideline
|
CPI January 2024 |
415.673 |
|
CPI December 2024 |
429.409 |
|
Difference |
13.736 |
|
Change in CPI |
3.3% |
Source: U.S. Bureau of Labor Statistics, 2024 Consumer Price Index for All Urban Consumers, Rent of primary residence in Washington-Arlington-Alexandria, DC-VA-MD-WV
Mayor and Council History
The Mayor and Council annually adopt a resolution to establish a voluntary maximum rate of rent increases, as required by Sec. 18-194 of the City Code entitled “Voluntary Rent Guidelines and Notice Requirements of Rent Increases.” On March 18, 2024, the Mayor and Council adopted Resolution 02-24, setting the VRG at 2.6 percent.
Next Steps
Upon the Mayor and Council’s approval of the Voluntary Rent Guideline (VRG), staff will notify property managers and owners. By law, landlords must provide a tenant with 90 days of notice before increasing the tenant’s rent and are prohibited from imposing more than one rent increase per unit in any 12-month period if the same tenant continuously rents that unit.