The Montgomery County Council’s planning, housing, and parks committee coalesced around a compromise-heavy rent stabilization bill on Monday, voting to advance a bill capping new rent increases at 6% to the full council.

Initially positioned as an “anti-rent-gouging” measure by chief sponsor and District 6 Councilmember Natali Fani-Gonzalez, the bill initially sought to cap new rent increases at 8% plus the rate of inflation, also carving out exemptions for single-family homes and some condos.

But after months of feedback from constituents and debate among fellow councilmembers — several of whom introduced a more aggressive bill that would cap rent increases at 3% — Fani-Gonzalez conceded Monday that she believes the initial proposal was too high, and sought to lower it. The new version of Fani-Gonzalez’s bill will cap new rent hikes at inflation plus 3%, and 6% overall. Another amendment she proposed Monday also eliminated the exemption for single-family homes and condominiums, a concession that appeared to be borne from her frustration with protracted debate over the carveout. “I’m willing to compromise even more just to get it over with and have a full recommendation [of the bill] to the full council,” she said. “I’m not adding the exemption, just to get it over with.”

The resulting bill that will move to a full council vote looks much closer to the one proposed by At-Large Councilmember Will Jawando, who has long championed the more aggressive 3% cap outlined in his HOME Act. Jawando said Monday he hoped Fani-Gonzalez would agree to a 5% cap instead, a figure he argued was still too high but more aligned with the needs of lower-income renters who can’t afford large hikes.

“I compromised, Will,” Fani-Gonzalez said Monday, shaking her head. “Don’t push it.”

In a terse exchange, Fani-Gonzalez added that that At-Large councilmembers like Jawando “don’t feel the pressure that I feel” from developers and property owners opposed to the idea of capping rent increases, citing Glenmont, Wheaton, and Aspen Hill as areas of critical growth that aggressive rent caps could jeopardize. “I need investment coming to my district,” she said.

Lobbyists representing multi-family real estate companies have argued that any rent caps would devastate their business, which they say are still rebounding in the wake of a pandemic that saw rent collection decline and utility costs surge. A consortium of senior executives at real estate firms like Bozzuto, Kettler, Washington Property Company, and The Donohoe Companies wrote councilmembers a letter in early March expressing distaste even for Fani-Gonzalez’s initial proposal, implying that additional controls on housing prices would prevent developers from being able to finance new projects.

The metro D.C. region, they said, is a place “where capital flows … align to the subregion where risk to return is lowest,” adding “naturally[,] regulation is a key factor in evaluating risk.”

A spokesperson for the Apartment and Office Building Association on Metropolitan Washington, an influential trade group, told WAMU/DCist on Monday that Fani-Gonzalez “completely capitulated out of nowhere” and “burned a massive amount of political capital for no reason” with the amendments she introduced to her bill.

“We’re kind of scratching our heads,” the spokesperson, Alex Rossello, said.

The new iteration of Fani-Gonzalez’s bill reflects some aspects of a proposal recently adopted in D.C., which is temporarily capping new rent increases in rent-stabilized buildings at 6%.

Renters have spent months testifying before lawmakers this spring about the devastating effects that spiking inflation and rising housing costs have wrought on their finances. Some feared that they might have to move if they had to pay the 10 to 15% increases that some housing providers are charging them, while others say they know neighbors who already have.

“We heard testimony here a few months ago that people that are facing 5, 6, 7, 8% increases are making decisions to move,” Jawando said Monday. “Most families can’t find [several hundred dollars] in an emergency. And so these are the margins that we’re talking about.”

The bill will now require a vote from the full council, which recesses at the end of July.