What localities can learn from Montgomery County’s rent regulation experiment.

Factors like higher interest rates and increased material costs continue to affect the development and affordability of rental housing. However, there’s one element that impedes building more than any other: Rent control. Montgomery County, Md., enacted rent control in July 2024, and since then, building permits have fallen drastically, to the point of nearly being nonexistent. 

According to a LinkedIn post from Jay Parsons, the county witnessed 2,093 permits during the first eight months of 2024 (Jan.-Aug.), just off the pace of all other Maryland counties at 2,274 building permits of five-plus units. Fast forward to 2025, all counties—sans Montgomery—stayed more or less the same at 2,248.  

Meanwhile, Montgomery County issued only 54 permits between January and August 2025. 

“The primary cause of rental affordability challenges is a lack of quality rental housing,” says Parsons, Economic Advisor for JPI. “It's hard enough to get housing projects started right now due to the higher cost of capital and higher economic uncertainty. We need policies that help overcome those hurdles and advance more projects to a ‘Yes.’” 

Parsons reminded readers that St. Paul, Minn., enacted rent control—which has since been amended—in 2021, and a similar fate for new permits ensued. At one point, building permits were down 80% in the city compared to 2020, reported Axios earlier this year. 

“Development capital is attracted to cities where there's a need for housing, and there's an appetite to get housing built,” Parsons says. “We're seeing that across Texas, the Southwest and the Southeast. We see it in parts of Southern California, as well. The result has been improved rental affordability in the areas, adding a lot of new supply.” 

Learn more about rent control and its impact on housing.