By Adam Pagnucco.
As I have previously written, after Montgomery County’s rent control law took effect in 2024, multifamily residential permits collapsed. This was a nearly unique event in the region as most other large jurisdictions continued to permit hundreds and even thousands of units. But new data indicates that the county permitted 518 units in the fourth quarter of 2025. So is the anti-rent control redlining of MoCo over?
Not so fast.
In a new batch of economic data sent to the county council, the Montgomery County Planning Department and the Montgomery County Economic Development Corporation found that the county permitted 518 multifamily units in 2025’s fourth quarter. That’s up from the 92 units permitted during the prior four quarters combined and similar to pre-rent control averages. However, the report offered these comments on the nature of the new units.
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The fourth quarter of 2025 saw an increase in the number of permits for units in multifamily buildings with the addition of 518 units. The bulk of these were in two buildings: North Bethesda Market II with 268 units, almost all of which will be affordable and the conversion of the former Hotel Silver Spring at 8727 Colesville Road into a residential building with 227 units, of which half will be affordable to residents earning up to 60% of area median income.
While these projects will provide significant and much-needed additions to the county’s affordable housing supply, they do not indicate a strengthening multi-family market. This is because both projects offer high levels of affordability by accessing unconventional sources of capital not available to traditional market-rate projects. According to the Montgomery County Department of Housing and Community Affairs (DHCA) Affordable Housing Pipeline Report – FY26 First Quarter Update, both projects use the county’s affordable housing payment in lieu of property taxes (PILOT) program. Additionally, NOBE II uses the county’s Housing Initiative Fund, and 8727 Colesville is accessing social impact capital according to a statement by the developer.
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So nearly all the units produced used one or both of two county programs: multi-year property tax abatements and the county’s Housing Initiative Fund (HIF). Both of these use public money. The HIF, which is the county’s primary vehicle for building and preserving affordable housing, is currently planned to spend roughly $20 million per year under the county executive’s current recommended capital budget. North Bethesda Market II, one of the two projects accounting for nearly all the multifamily units in the most recent quarter, is due to receive a $38 million HIF loan. That illustrates the limits of the county government’s ability to build housing directly.
As for the tax abatements, they are not cost-free. They offer reduced or eliminated property taxes for 15 years or more on eligible projects. That means that those projects do not contribute property tax revenues to support the county costs (schools, public safety, infrastructure, health and human services and more) that they generate, requiring the rest of the county’s taxpayers to subsidize them. 8727 Colesville Road, the other project accounting for nearly all recent multifamily units, is getting a tax abatement of $225,000 a year.
It’s noteworthy that while tax abatements are now required to get these projects moving, the county’s rent control supporters often oppose such arrangements. County Executive Marc Elrich vetoed tax abatement bills in 2020 and 2025. Council Member Will Jawando voted against overriding his veto both times and Council Member Kristin Mink voted with Elrich in 2025. (Both bills ultimately became law.) Elrich, Jawando and Mink are the three strongest supporters of rent control in county politics.
Two things are now clear. First, private sector real estate players are avoiding Montgomery County and other jurisdictions embracing rent control, going so far as to redline us from receiving investments. Second, public resources to build housing like loans, subsidies and tax abatements are limited and cannot match the financial capital of the private sector. This is our reality moving forward.
When I first started writing about county government nearly 20 years ago, most developers built housing without incentives and the county used taxes and fees to pay for the infrastructure to support it. In today’s era of rent control, subsidies, and tax breaks, taxpayers are now required to pay for BOTH the housing AND the infrastructure. And despite the increasing burden on taxpayers, we will still get less housing construction even though housing costs are much higher than before.
That’s the insanity of rent control and housing policy in Montgomery County.