College Park wins appeals case over city landlords
Court rejects claim that rent control ordinance is discriminatory
College Park officials have been given legal permission to continue with a residential rent control law, despite concerns from landlords that they are unfairly targeted.
The state Court of Appeals ruled on Aug. 25 that College Park's rent stabilization ordinance, which limits the rent residential landlords can charge, does not unlawfully restrict the landlords by providing an advantage to student high-rises in the city.
The court voted 4-3 to uphold a December 2008 Prince George's County Circuit Court ruling that rejected several landlords' claims that the ordinance unfairly penalized them while placing no such restrictions on owners of student high-rises that, in many cases, charge more than the landlords.
"We're pleased but not surprised that our legislation was upheld," said Mayor Andrew Fellows. "We want to make sure that there's a balance of long-term homeowners ... and student renters."
City officials have long argued the ordinance, first passed in 2005, was designed to keep housing affordable and to decrease code violations ignored by absentee landlords. It currently bars residential landlords from collecting total monthly rent greater than 0.6 percent of a home's assessed property tax value.
Landlords have argued the ordinance's actual intent is to attract developers and push University of Maryland, College Park, students out of neighborhoods and into high-rises like University View and the newly opened Mazza Grandmarc.
While the high-rises typically charge more than $850 a month in rent, landlords have said their average rate for a single-family home is about $500 to $600.
"This case was really the first time ever that rent control was used on the least expensive housing," said John Havermill, a city landlord who lives in Sandy Spring and is not a plaintiff in the case. "Not to lower the cost of living for citizens, but to control who lives where."
The plaintiffs several landlords and a UM student first sued the city in 2006, and filed an appeal after the case was dismissed in December 2008. An injunction blocked the city from enforcing the ordinance until February 2009, and the city hopes to form a rent stabilization board and begin enforcing the law later this year.
In the Aug. 25 ruling, three dissenting judges Lynne A. Battaglia, Joseph F. Murphy Jr. and Chief Judge Robert M. Bell issued a written opinion that criticized the verdict, arguing it violated the landlords' rights by denying them the same protection provided to high-rise developers.
Battaglia wrote in the opinion that the ordinance had "no legitimate public purpose" and only provided "a private benefit conferred on a class that may be favored in the political realm."
The rent stabilization ordinance is set to expire Sept. 1, 2012, at which point the City Council would have the option of extending it. Attorney Tim Maloney, who represented the plaintiffs in the case, said he does not expect another appeal, but would not be surprised if other landlords chose to take future legal action.
"The devil is in the details. To enforce this on a landlord-by-landlord basis ... is an enormous undertaking," Maloney said. "The city has spent hundreds of thousands of taxpayer dollars on this, and to what end?"