Montgomery County's rent stabilization law has driven multifamily building permits down by more than 90%, and county planning staff want the council to fix it by permanently exempting new construction.

The recommendation, first reported by The Banner on Oct. 16, 2025, calls for replacing the law's rolling 23-year exemption with a fixed cutoff: any project built after 2002 would be permanently exempt from rent caps. The change would mirror Washington, D.C.'s approach, which has exempted all buildings constructed after 1975 for four decades.

The numbers tell the story.

Montgomery County issued 555 multifamily building permits in the first quarter of 2024, before the law took effect in July of that year. In the first quarter of 2025, that figure dropped to seven, according to a July 2025 Montgomery Planning report cited by Bethesda Magazine. Permits rebounded somewhat in the fourth quarter of 2025, when more than 500 were issued, but the full-year 2025 total remained far below prior years. Councilmember Evan Glass, in an August 2026 Banner voter guide questionnaire, put the annual figure at 84 permits countywide, compared with more than 1,700 in Fairfax County.

The planning staff's October 2025 Development Pipeline Analysis named rent stabilization as the most frequently cited barrier to new construction among 32 developers surveyed. Other obstacles included rising construction costs, difficulty obtaining financing, high impact taxes and permit fees, and a lengthy review process. More than 23,000 approved but unbuilt multifamily units sat in the pipeline as of August 2025, according to Bethesda Magazine.

The council had a chance to adopt a date-certain exemption in 2023, when the rent stabilization law was first passed. An amendment modeled on D.C.'s structure failed 6-5. Council members Gabe Albornoz, Marilyn Balcombe, Andrew Friedson, Evan Glass and Dawn Luedtke voted yes; Natali Fani-Gonzalez, Will Jawando, Sidney Katz, Kristin Mink, Kate Stewart and Laurie-Anne Sayles voted no.

Now two of those yes votes are running for county executive and making the permit collapse a campaign issue. Friedson said in an August 2026 Banner voter guide questionnaire that the county has seen "a 97 percent drop in new housing production" since the law took effect and called for "clear and permanent exemptions for new construction."

Meanwhile, a new Census data analysis published Friday, Aug. 21, by local analyst Adam Pagnucco found that Downtown Bethesda (ZIP code 20814) and Clarksburg are the only two Montgomery County ZIP codes posting residential growth rates that exceed D.C.'s. Much of the rest of the county has stagnated.

"If MoCo's leaders truly want to see multifamily housing construction resume, they will have to change their rent control law to more closely resemble D.C.'s," Pagnucco wrote on Montgomery Perspective.

That conclusion clashes with what some Bethesda residents see out their windows. Pagnucco acknowledged years of pushback from Downtown Bethesda readers who point to cranes, road closures and an influx of new neighbors as evidence the area is already overdeveloped. He framed the tension as a gap between local perception and countywide data showing most of the county isn't growing.

No council vote on amending the rent stabilization law has been scheduled.