Salisbury officials plan to end a prohibition on rent increases that was enacted last year during the Covid-19 pandemic as a way to help city residents who became unemployed and were struggling to make ends meet.
Gov. Larry Hogan has lifted some statewide restrictions and it’s time for Salisbury to do the same, City Administrator Julia Glanz told City Council members during a Monday work session.
“Things are looking up,” she said. “I don’t want undue burden on landlords.”
Council members agreed, and said they will draft legislation to end the freeze.
“I think the time has come to look at rescinding this,” said Council President Jack Heath.
Salisbury’s rent freeze was adopted last June 1 and bars rent increases during states of emergency and requires landlords to refund any increases that went into effect after Gov. Larry Hogan declared a state of emergency on March 5, 2020.
It soon led to a lawsuit filed by landlords in Salisbury, Baltimore City and Howard County who said new laws that prohibit rent increases during the Covid-19 pandemic are unconstitutional.
“While well-intentioned in their efforts to protect financially-vulnerable tenants during an intensely difficult time, the Acts are too blunt an instrument to pass constitutional muster and will visit severe, and in some cases multiplicative, harms on Plaintiffs and similarly situated housing providers, who are trying to navigate serious property management concerns during a pressing financial and public health crisis,” the landlords said in the lawsuit filed June 15 in U.S. District Court.
Among the 23 plaintiffs are 16 rental property companies that own a combined 884 units in Salisbury. The largest are GNI with 285 units, RCP with 108 and Tide Mill with 104.
It was part of the city’s Next Step program designed to help city renters, first responders, low-income residents, businesses and houses of worship amid the pandemic.
Similar laws were passed in Baltimore on May 11 and in Howard County on May 22.
The lawsuit alleges landlords in the three jurisdictions were “deprived of their rights to possess, use, manage, and dispose of their property. Defendants have done so, and will continue to do so, without providing just compensation to Plaintiffs.” The laws also prohibit landlords from increasing rent “in accordance with settled, agreed-upon lease terms,” according to the lawsuit.
Last July, U.S. District Judge Stephanie A. Gallagher denied the landlords’ request for a temporary restraining order.
The judge agreed that landlords were suffering from the same “economic havoc” all businesses have faced because of Covid-19.
“On the other hand, this court is understandably reluctant to disturb legislative enactments, intended to address the needs of Marylanders during a time of sincere desperation,” she wrote.
Glanz said the case remains unresolved.
In the meantime, Wicomico County residents who fell behind on their rent payments because of loss of income during the Covid-19 pandemic became eligible for help from several federal grants to the county that were distributed through local agencies including Salisbury Neighborhood Housing and Habitat for Humanity Wicomico County.
Councilman Muir Boda said a lot of people got help from the various rental assistance programs as well as unemployment checks, and he agreed the city should end the rent freeze.
“I think it’s time we pull this one back,” he said.