By Adam Pagnucco.
Part One explained the methodology of this series, which looks at U.S. Census data on residential addresses to approximate housing units. Part Two looked at residential address count growth in D.C., Maryland and Virginia. Part Three looked at address count growth at local jurisdictions inside Maryland and the Washington area. Part Four looked at growth inside MoCo.
What have we learned from this series?
First, it’s noteworthy that the District of Columbia saw more address growth than Maryland and Virginia and most local jurisdictions in its region despite its rent control law. Decades of economic research have shown overwhelming evidence that rent control negatively impacts housing. So what has happened in D.C.?
The District has an advantage that no other jurisdiction has: it’s the capital of the United States. Some residents and employers will put up with almost anything (like no congressional representation) to be there. Additionally, its rent control law is weak. It only applies to buildings constructed before 1975 – an exemption that the D.C. government has studiously respected for 40 years – and so it applies to less than half of the city’s rental units. It allows rent increases to vacant units of up to 20%. And it does not apply to many fees. Accordingly, it is not very effective at preventing market-wide rent increases. The weakness of the law as well as its decades of completely exempting new construction has apparently overcome developer aversion to rent control to enable substantial housing expansion there.
Back in 2023, when the Montgomery County Council passed its rent control law, there was a series of votes on provisions that would have tempered the law. A particularly fateful vote occurred on an amendment that would have established a date certain for exemption of new construction, just as D.C.’s law has. Council Members Gabe Albornoz, Marilyn Balcombe, Andrew Friedson, Evan Glass and Dawn Luedtke voted yes while Council Members Natali Fani-Gonzalez, Will Jawando, Sidney Katz, Kristin Mink, Kate Stewart and Laurie-Anne Sayles voted no. County planning staff are now recommending such a change because of the county’s collapse of multifamily building permits.
If MoCo’s leaders truly want to see multifamily housing construction resume, they will have to change their rent control law to more closely resemble D.C.’s. With an example of successful balancing right across our border, there is really no excuse – assuming of course that they care at all about housing.
Now let’s look at address growth inside MoCo as illustrated in Part Four. Two zip codes in the county – 20814 (Downtown Bethesda) and 20871 (Clarksburg) – have posted growth rates far exceeding D.C. Many other parts of the county have stagnated.
The county’s growth policy in Clarksburg is notorious for allowing huge residential development without building commensurate infrastructure, especially in transportation. (Last year, the county council voted to remove a major road connection between Clarksburg and Montgomery Village from county plans.) But what about Bethesda?
Nine years ago, national political analyst Charlie Cook wrote an incendiary guest column in what was then called Bethesda Beat titled I Hate What Bethesda Has Become. Whether he was right or wrong, his column complaining that “overbuilding has hit a saturation point and traffic is a nightmare” spread like wildfire.
For many years, I have published reams of economic data showing that MoCo is trailing its competitors. Such data has often attracted disbelief from readers in and around Downtown Bethesda. Here’s a paraphrased sample of what I have heard from them.
Pagnucco, are you crazy? There are cranes everywhere here. The road blockades are maddening. Tons of people are moving in. There’s no way we can handle this. It just has to stop.
Such viewpoints are sometimes dismissed as provincial NIMBYism. But what if the data above is right? What if Downtown Bethesda is one of the very few locations in MoCo that can still compete with the heavyweights of the Washington region? And what if Bethesda is getting deluged while much of the rest of the county goes without adequate growth? Clarksburg is one thing, but Bethesda is one of THE biggest places for votes in MoCo Democratic primary elections. Political discontent is hard to ignore when it comes from that part of the county.
Finally, Bethesda development opponents may be saved by rent control, especially if MoCo leaders do nothing and allow their law to further strangle multifamily development. The data in Part Three shows that MoCo’s residential address growth trailed most of the region even before rent control had fully taken effect. As more address data comes in (whenever the federal government reopens), we shall see if MoCo falls even further behind.