HAGERSTOWN, Md. – Hagerstown officials are examining the possibility of rent stabilization policies as they grapple with rising housing costs, limited supply and increasing demand across the city.
The issue was a central topic during a March 3 work session of the mayor and City Council, where officials heard from an economics instructor and discussed potential policy options following a recent community town hall on housing affordability.
City leaders emphasized that no rent control program is currently being proposed. Instead, the city is evaluating possible strategies to stabilize rents while avoiding unintended consequences that could worsen the housing shortage.
Rent control debate centers on housing supply
Economics instructor Stacy McGee told council members that rent control policies often create market distortions when governments cap rental prices below market levels.
“When you pick a price that’s not the equilibrium price, the market is always trying to get back to it,” McGee said.
According to McGee, artificially limiting rent can increase demand for apartments while discouraging landlords from maintaining or expanding rental properties.
Potential effects include landlords converting apartments into condominiums or short-term rentals and reducing maintenance investments because they cannot recoup costs through higher rent.
McGee said the most effective way to lower housing costs is increasing the overall supply of homes and apartments.
“If you want to bring the price of housing down, you have to increase the supply,” she said.
Local housing pressures highlighted
Council members and staff noted that housing affordability has become a growing concern for residents.
Officials said the area’s median income is about $35,000 while rental prices continue to rise, making it difficult for many residents to afford housing.
Demand has also increased as residents move from higher-cost areas such as Northern Virginia and Frederick, where housing prices have surged in recent years.
Those factors have intensified competition for available apartments and homes in Hagerstown.
Concerns about unintended consequences
Several council members expressed concern that rent control policies could create additional challenges for both tenants and landlords.
Examples cited during the discussion included jurisdictions where rent stabilization led to:
- Increased evictions
- Reduced housing construction
- Fewer building permits
- A shrinking supply of available rental units.
Officials pointed to Montgomery County and San Francisco as places where rent control policies have produced mixed or negative results.
McGee said rent caps can help some tenants remain in place but may ultimately increase housing costs for others if supply declines.
Alternative approaches under consideration
Rather than implementing strict rent controls, city leaders discussed several potential strategies to improve housing affordability.
Ideas raised during the meeting included encouraging new housing development by streamlining zoning processes and creating incentives for developers to build more units.
Officials also discussed requiring developers to set aside some new units as affordable housing and expanding rental assistance programs.
Another potential solution involves rehabilitating vacant properties throughout the city.
Officials said large numbers of vacant homes remain in Hagerstown and could be returned to the housing market through partnerships with developers or local landlords willing to renovate them.
Programs similar to Baltimore’s reinvestment initiative, which sells vacant homes at low cost to developers who agree to rehabilitate them, were also mentioned as possible models.
Structural housing challenges
Officials said several long-term structural issues complicate the Hagerstown housing market.
According to city leaders, more than 5,000 households are currently on waiting lists for subsidized housing programs, while roughly half of the city’s rental units already participate in some form of subsidy program.
Council members also discussed concerns that investor-owned properties are limiting opportunities for first-time homebuyers.
In some cases, investors purchase starter homes or townhouse developments and rent them out rather than sell them, preventing residents from buying entry-level homes and building equity.
City staff also pointed to tax-sale laws that allow companies to purchase large numbers of vacant properties and hold them for years without redevelopment, leaving homes deteriorating as housing demand continues to grow.
More discussions expected
Council members said the housing issue is complex and will require continued collaboration among city officials, landlords, developers and housing advocates.
Some officials suggested hosting additional discussions with landlord associations and housing organizations to identify potential solutions.
“This conversation should not end tonight,” Councilwoman Tiana Burnett said during the meeting, emphasizing the need for ongoing dialogue about housing affordability.
City leaders indicated that housing policy will likely remain a major topic in upcoming budget discussions as officials consider how city resources might be used to expand housing opportunities and address affordability concerns.
