By Adam Pagnucco.
Equity Residential, a publicly-traded multifamily housing owner, is ranked as the fifth-largest apartment owner in the United States by the National Multifamily Housing Council. Its huge portfolio includes seven properties in MoCo and one in Prince George’s County. And now the company’s CEO has gone on record condemning MoCo’s rent control law and Maryland’s broader political climate for housing.
The Washington Business Journal first reported this story on Friday. In an earnings call last Wednesday, Equity Residential CEO Mark Parrell was asked about the impact of new rent control laws on the company’s business. After expressing disappointment in Washington State’s approval of rent control, he then offered these remarks about Maryland.
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For Maryland, I’d take it a step further. We have a small portfolio in Maryland. The rent control you referred to I think is mostly the Montgomery County rent control, which is suburban Washington DC. We only have one property subject to those rules. But we are unlikely to invest further in that area, in that state. The political climate has become quite poor from a landlord perspective. You can see just across the Potomac in Virginia where they’re encouraging housing production. You see that housing production occurring. And in a state like Maryland that’s become increasingly hostile to housing providers, you see the amount of investment in those markets, whether it’s Baltimore or Washington DC metro, declining. So I think it’s unfortunate. I think it’s the opposite of the kind of zoning decontrol and public-private partnership that will increase supply and solve the housing shortage. So we’ll continue to advocate directly and through our associations against those kinds of ill-conceived policies.
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A few notes. It’s interesting that Parrell apparently lumps MoCo and Maryland together. MoCo, Prince George’s and a few municipalities in the latter county have rent control but the rest of the state does not. Additionally, Governor Wes Moore is more focused on building housing than any other Maryland governor in recent memory. None of that seems to matter to Parrell. Nor does the recent passage of the More Housing N.O.W. package by the Montgomery County Council. For him, the passage of rent control in Maryland’s largest county taints the entire state.
What would he think if he knew that the MoCo government subsidizes the Montgomery County Renters Alliance, which lobbies for rent control and eviction restrictions at both the state and local levels? And what would he think of a prominent MoCo politician openly telling developers “Don’t come here”? I suspect he would not change his mind about us!
Also of interest is who listens to such earnings calls: reporters for many media outlets, company shareholders, equity investors and lenders. Who knows how many national real estate players heard Parrell condemn MoCo and Maryland?
This just adds to previous statements that MoCo has been “redlined” by the national real estate industry. As long as MoCo has rent control, such perceptions will persist. County housing providers, tenants and taxpayers will pay the price as champagne is uncorked in Virginia.