Earlier this month CM Will Jawando introduced Bill 8-26 that prohibits landlords from using algorithms (known as RealPage) and price fixing in setting rents. Mr. Jawando’s statement is as forceful as ever:
This legislation is about promoting free markets in the rental housing market and cracking down on illegal price-fixing and collusion that results in higher rents for our residents. Specifically, the bill would prohibit the use of algorithmic devices to establish rents or rental terms in the County; prohibit price coordination regarding rents or rental terms in the County; provide for the enforcement of the prohibitions; and generally amend the law regarding landlord-tenant relations.
There are so many things wrong here that I could easily exceed my word count for a post.
Point 1 Mr. Jawando and co-sponsor CM Mink have an abysmal record when it comes to “free markets.” They spearheaded rent control, the ultimate form of price fixing. They opposed widespread zoning reform. They force students into coercive public schools, and they are the ones who vote for ever higher budgets.
Point 2 Mr. Jawando’s bill is a piggy-back on a nationwide concern regarding collusion among large landlords owning 1.3 million apartments. Trump’s Department of Justice is taking significant action against these landlords, possibly making Bill 8-26 unnecessary.
Point 3 UC Berkeley’s School of Information performed a study on RealPage’s impact on rents (key findings). In some Maryland areas (Abington) the differential is significant while in other areas (Rockville) the differential is insignificant. Regardless, the study itself concludes “our data does not prove whether or not price coordination is the root cause of RealPage’s rent impact.” Shutting down RealPage may not result in lower rents.
Point 4 If we really want to punish the price fixers (as we should), we need to loosen up the zoning.
Point 5 Here is the zinger: Montgomery County’s most collusive and price-fixing entity is its public school system. It thrives on manufactured budgets, budget increases as enrollment drops, boundary studies, lawsuits, unionized employees receiving $2,500 tax credits, layers and layers of administration, shady contracts, and so much more. If we want to work toward a free market in Montgomery County, let’s start with the biggest oligarchy: MCPS.
