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  • Writer's pictureCenter for Local Policy Analysis (CLPA)

Analyzing Montgomery County’s Bill 38-23, Which Aims To Address Tenant Displacement and Its Impact

This week, an important bill was introduced by Council President Glass on behalf of County Executive Marc Elrich in Montgomery County, known as Expedited Bill 38-23, Tenant Displacement – Right of First Refusal to Buy Rental Housing – Amendments. The bill aims to address the issue of affordable housing in the County. Let's analyze the key provisions of this bill and explore whether it will affect racial and ethnic minority communities and low-to-moderate communities, which are most affected by an overall lack of affordable housing, defined as housing on which the occupant is paying no more than 30 percent of gross income for housing costs, including utilities.

Key Provisions of Expedited Bill 38-23

Designation of Qualified Entities

One of the primary changes proposed by this bill is to allow the County Executive to designate a qualified entity that may exercise the right of first refusal. In simpler terms, when a rental property is being sold, this bill gives the County Executive the authority to identify an organization or entity that can step in and purchase the property before it is sold to another party.

Definition of Qualified Entity

The bill defines a qualified entity as a legal entity designated under this bill and assigned the right of first refusal by the County Executive. The bill specifies that entities like Rockville Housing Enterprises, the Division of Housing and Community Development of the City of Gaithersburg, and the Department of Housing and Community Development of the City of Takoma Park are designated as qualified entities.

Limiting Owner Deposits

Another critical aspect of the bill is that it places a cap on the deposit that property owners can charge if the right of first refusal is exercised. The cap is set at 5% of the contract price, intended to prevent property owners from demanding excessively high deposits that could deter the County from exercising its right of first refusal.

Affordable Housing Focus

The bill's overarching goal is to facilitate creation and preservation of affordable housing in Montgomery County. By allowing the County Executive to assign the right of first refusal to qualified entities, it aims to streamline the process of acquiring properties for affordable housing purposes.

Potential Impact on Racial and Ethnic Minority Communities and Low-to-Moderate Communities

The potential impact of Expedited Bill 38-23 on racial and ethnic minorities and low-to-moderate communities will hinge on the eventual form of the bill and how it is put into practice.

Potential Positive Impact

On the surface, this bill appears to impact these communities positively. Focusing on affordable housing may provide more housing options for individuals and families in these communities who are often disproportionately affected by housing affordability challenges.

Displacement Concerns

However, it's crucial to consider the potential for displacement. Gentrification and rising property values can lead to the removal of long-standing minority and low-income residents. While the bill aims to preserve affordable housing, there should be mechanisms to ensure that existing residents are not adversely affected.

Affordable Housing Commitment

The bill requires qualified entities to commit in writing to maintaining the affordability of housing they acquire. This commitment could safeguard against displacing current residents, but rigorous oversight will be necessary to ensure compliance.

Expedited Bill 38-23Next Steps

If you have any questions or need further information about Expedited Bill 38-23 and its implications for your community, we encourage you to reach out to Council President Glass's office. Your questions and concerns are essential, and their team is here to provide clarification and address any inquiries you may have.

The next step in the legislative process for Expedited Bill 38-23 is the public hearing scheduled for October 10 at 1:30 pm in the Council Office Building, Third Floor Hearing Room. You also have the option to participate remotely via Zoom. To have your voice heard, sign up to speak by the deadline of October 9, at 2 p.m. You can access the Council Agenda for this public hearing on their website. Your input during this critical phase can help shape the future of housing policy in Montgomery County.


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