Tyler v. City Of Coll. Park

• Decision Date: 25 August 2010
• Docket Number: No. 126, Sept. Term, 2009.,126, Sept. Term, 2009.
• Citation: 3 A.3d 421,415 Md. 475
• Parties: Alan TYLER, et al. v. CITY OF COLLEGE PARK, et al.
• Court: Maryland Court of Appeals

415 Md. 475

3 A.3d 421

Alan TYLER, et al.

v.CITY OF COLLEGE PARK, et al.

No. 126, Sept. Term, 2009.

Court of Appeals of Maryland.

Aug. 25, 2010.

COPYRIGHT MATERIAL OMITTED.

COPYRIGHT MATERIAL OMITTED.

Timothy F. Maloney (Joseph M. Creed of Joseph, Greenwald & Laake, P.A. of Greenbelt, MD), on brief, for appellants.

Linda S. Woolf (K. Nichole Nesbitt and Derek M. Stikeleather of Goodell, DeVries, Leech & Dann, LLP of Baltimore, MD), on brief, for appellees.

Argued before BELL, C.J., HARRELL, BATTAGLIA, GREENE, MURPHY, ADKINS and BARBERA, JJ.

HARRELL, J.

Appellants, four owners of affected rental properties in the City of College Park ¹ and one student renter, contend that Appellees, the Mayor and Council of the City of College Park, ² enacted a novel (and apparently unprecedented) rent control program for the explicit purposes of discouraging in the City the rental property market in so-called “single-family” neighborhoods and nudging renters to nearby apartment buildings or future apartment complexes, rather than for the primary purpose of protecting tenants from exorbitant rental rates, the traditional rationale underlying rent control legislation. According to Appellants, the City's rent control program will impair the rental property market for the most affordable housing in the City, namely, rentals of rooms and common areas in single-family detached homes, while encouraging the rise of rents in the sector of the rental market already containing the most expensive housing, medium-rise and high-rise apartments, by exempting those properties from the rent control restrictions. On these grounds, Appellants charge principally that the City's rent control program violates Article 24 of the Maryland Declaration of Rights and the anti-discrimination provisions of the State of Maryland and Prince George's County Fair Housing Acts, and constitutes impermissible de facto zoning by a legislative body without zoning power. For reasons we shall explain, we disagree with Appellants' contentions and affirm the grant by the Circuit Court for Prince George's County of summary judgment to the City on Appellants' claims, thereby upholding the validity of the City's unique rent control program.

FACTS

Two years prior to the enactment of the City's rent control program in 2005, following discussions about using rent stabilization as a response to public concerns of rising rental costs, neighborhood deterioration, and inflated purchase prices for homes due to the increasing number of rental conversions in the City's traditional “single-family” neighborhoods, the City Council drafted a comprehensive Housing Plan. The Housing Plan included a “neighborhood revitalization” component, which stated that “[t]he quality of life in the city can and should be raised....” In order to remedy this perceived “quality of life” problem, the Housing Plan recommended enactment of a rent control program in the City to be used as a “regulatory tool” to impair the profitability of rental conversions in so-called “single-family” neighborhoods. Specifically, the Housing Plan noted:

Rent stabilization is one tool that can be used to ensure that rental units are available/maintained as affordable housing units. Rent stabilization limits what landlords can charge tenants. The effect on single-family homes converted to rentals will be to make it less profitable to make these conversions.

* * *

If legally feasible, rent stabilization could be considered as a regulatory tool to deter future conversions in residential areas which are primarily owner occupied. Assuming this, geographic boundaries can be drawn to include the areas that need to be protected.

In April 2004, City Councilmember Robert Catlin, a retired economist, submitted a proposed ordinance which sought to implement the rent control concept outlined in the Housing Plan. Catlin's proposal provided that a rent ceiling would apply to all single-family, duplex, triplex, and quadraplex rental properties, but that larger multi-unit apartment buildings would be exempt. In Catlin's view, such a plan would decrease the number of “single-family” properties that are rental units while encouraging construction of new apartment buildings which, in turn, would improve the balance between rental supply and demand in the City. Upon Catlin's request for a review of the legality of the proposal, the City Attorney, in a memorandum, expressed concern over the validity of the proposed rent control program, stating:

[W]e embarked upon drafting a rent stabilization ordinance in accordance with the parameters requested by Councilman

Catlin. Some of the provisions requested, such as exempting apartment buildings, establishing a rent ceiling based upon an amount certain, and using the protection of the City's stock of single family owner occupied housing as a purpose for enacting such an ordinance, have not been tested in Court. Accordingly, we cannot guarantee that the City would prevail in a challenge of the proposed ordinance. We have attempted to address all of the concerns raised by the Courts that have addressed rent control issues; however, some of the elements of the requested legislation are novel.

Despite the concerns of the City Attorney, Catlin pressed forward with the rent control proposal.

Prior to voting on Councilmember Catlin's proposed rent control ordinance, the City commissioned Anirban Basu, a policy analyst from the Sage Policy Group (a private consultant), to produce a report (hereinafter “the Sage Report”) addressing the question of whether the City's stated policy objectives could be addressed reasonably through a rent stabilization program. The report, released in April 2005 and entitled “There is a Rational Basis for Rent Stabilization in College Park, Maryland,” analyzed the available literature on rent control and City-specific data concerning the rental market. The report confirmed the City's beliefs regarding the pattern of declining home ownership, increasing rental conversions, diminished housing affordability, and code violations in the City. The Sage Report concluded that rent stabilization “is likely to be conducive” not just to stabilizing rents for affected properties, but also to enhancing home ownership and decreasing violations of the City code by reducing future rental conversions of single-family homes.

One month after the Sage Report was released, on 24 May 2005, the Mayor and City Council adopted, by a 7-1 vote, Ordinance 05-2-02 (hereinafter “the Ordinance”), which, according to its title, established a rent stabilization program in the City, set forth the fees and penalties associated with the program, and created a Rent Stabilization Board to administer the program. ³ The Ordinance's Preamble set forth the basic legislative facts as found by the City Council and explicated the general rationale underlying the City's adoption of the Ordinance, providing in pertinent part: ⁴

WHEREAS, on June 10, 2003, the Mayor and City Council of the City of College Park approved the City of College Park Housing Plan (the “Housing Plan”); and

WHEREAS, according to the Housing Plan, the City of College Park had a total of 6,245 housing units in 2000 (not including 8,420 beds in University of Maryland dormitories, another 1,740 beds in public/private partnership housing on University of Maryland owned land, and 1,386 beds in fraternity and sorority houses); and

WHEREAS, 4,204 of those units, or 67.3%, are single-family detached homes, while 152 units or 2.4% are single-family attached houses (townhouses), 268 units, or 4.2%, are located within structures containing 2-4 units, and 1,613 units, or 25.8%, are within structures containing 5 units or more; and

WHEREAS, the 2000 United States Census reported an owner occupancy rate of 57.2% for College Park, a decline of 9.8% from 1980; and

WHEREAS, in 2000, renters occupied 2,582 units or 42.8% of the City's conventional housing units; and

WHEREAS, in 2000, the City's median monthly rent was $806 compared to Prince George's County's rate of $737; and

WHEREAS, in 1999, 40.6% of the renters in the City of College Park paid more than 35% of their household income for rent. This percentage is 17.7% more than surrounding municipalities; and

WHEREAS, studies indicate that the percentage of renter occupied housing units have increased since the Housing Plan was prepared and that there has been a corresponding decrease in the percentage of owner-occupied housing; and

WHEREAS, with higher rents being charged in the City of College Park than in Prince George's County for comparable housing units, renters in the City are faced with spending an ever-increasing percentage of their household income for rent; and

WHEREAS, the Mayor and City Council finds that the cost of rental housing in the City is abnormally high; and

WHEREAS, the Mayor and City Council further finds that there is a substantial and ever increasing shortage of decent rental housing accommodations, especially for families, households of low and moderate income and those on fixed incomes, in the City; and

WHEREAS, with such a large percentage of rental properties in the City, the City loses income taxes and motor vehicle taxes not paid by a large portion of the renters; accordingly, the owner occupied properties subsidize rental properties; and

WHEREAS, rental properties artificially inflate the value of property in the City, thereby adversely affecting the owner occupied properties and leading to unstable neighborhoods; and

WHEREAS, the current rental market in the City poses a threat to the public health, safety and welfare of the citizens of the City of College Park; and

WHEREAS, the Mayor and City Council deem the protection of the City's stock of owner occupied housing to be a legitimate public purpose; and

WHEREAS, the Mayor and City Council deem it to be in the best interest of the City to adopt a rent stabilization program in order to ensure the availability and

...