There is ample evidence from cities around the country that enacting rent control reduces both overall construction and the number of available rental units by as much as 15%. Unfortunately for Maryland, we no longer have to look to other states for those negative impacts – we have them right here in Montgomery County.
A recent Residential Development Pipeline Analysis conducted by Montgomery Planning has provided crucial insights into why so many approved housing projects remain unbuilt, and the findings point directly to local policies and market conditions—with rent stabilization emerging as the most significant policy barrier.
The analysis, which examined 88 projects representing 99% of unbuilt units in the Pipeline, aimed to accelerate housing delivery by identifying the impediments preventing projects from moving beyond Planning Board approvals to actual on-the-ground construction.
The Montgomery rent stabilization regulation, which became effective on July 23, 2024, has created a “broader chilling effect on construction financing,” according to interviewees. Even projects that received approvals prior to the regulation’s implementation may now be impacted, as construction financing is typically finalized only after all necessary approvals are complete.
Adam Pagnucco of Montgomery Perspective has written extensively on the County’s rent control policies and the negative impacts they have on new housing developments, including how national homebuilders have “redlined” Montgomery County as a place to avoid building homes.
Read Pagnucco’s articles on rent control fallout here:
- More Evidence That Rent Control is Preventing Housing Construction – Montgomery Perspective
- The Lonely Death of MoCo’s Multifamily Rental Market – Montgomery Perspective
- National Housing CEO Calls Out MoCo, Maryland for “Poor” Political Climate – Montgomery Perspective
- Yup, We’re Redlined – Montgomery Perspective