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During the economic slump that has accompanied the COVID-19 pandemic, each day seems to herald more bad financial news. Lord & Taylor files for bankruptcy. Beloved Baltimore restaurants — including Alexander Brown, Milton Inn, City Cafe and Chez Hugo — shutter for good. And Congress and the White House can’t get their act together to approve an extension of vital economic stimulus efforts, including the now-expired $600 federal unemployment supplemental benefit. Across the nation, there is record unemployment, and businesses, small and large, face ruin. In these extraordinary times, Americans are being asked to pull together, to look out for each other, to make sacrifices where necessary and not despair. And so we wear masks and engage in social distancing, accept that schools must abstain from in-class learning, support local businesses, charities and our neighbors where we can.
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As part of that effort, some local governments have told property owners that they can’t raise rents on their tenants, even in cases where rental agreements provided for a future increase. Earlier this summer, a group of nearly two dozen landlords fought back and filed suit in U.S. District Court in Baltimore asking a judge to toss out these mandates on the grounds that they are not constitutional. This was, to put it mildly, a bad look for the landlords who objected to rental control measures in Baltimore, in Howard County and in the city of Salisbury on the lower Eastern Shore.
Rent control has a long history in the United States, albeit a very controversial one. Some form of it has been practiced since at least World War I when there was concern about excess profiteering in response to housing shortages. The movement picked up speed around World War II for the same reasons. And major cities such as New York have been major practitioners even as most states limit or ban it for fear that such restrictions tend to be haphazard and discourage investment. The Supreme Court has upheld the right of local governments to adopt rent restrictions, most recently in Fisher v. City of Berkeley in 1986. And the argument in favor of them is more compelling during emergencies, which is exactly what the coronavirus pandemic represents.
First, let’s specify that the landlords are not villains. We have no doubt their claims of economic stress are legitimate and that they have their own bills to pay. But we also know that many of their tenants are in a worse place. And the public interest here is in not seeing those families forced into ruin if not from evictions — which have been limited by statewide order by Gov. Larry Hogan — then by not being able to afford other basic needs. As U.S. District Judge Stephanie A. Gallagher pointed out in denying the landlords’ request for a temporary restraining order, “plaintiffs are not deprived of the ability to generate any rental income from their properties, but rather may not increase the rents for the time being.”
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The landlords are reportedly in negotiation with officials in Salisbury, Ellicott City and Baltimore and presumably may find some relief. It should be noted, for example, that Baltimore has already set aside $13 million to help pay overdue rents. Such an emergency fund is appropriate to help offset the hardship caused by the eviction ban. But we would not be as enthusiastic as an open-ended handout to cover rent hikes. While the landlords correctly point out in their court filing that it’s not certain when the current emergency will be over, we are not convinced that the next stop for the rent-controlled corporation is bankruptcy court. Landlords who are unaware of what actual hardship looks like should first volunteer at a food bank.
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Still, we can’t deny that one effect of the current crisis is to give many people the impression that the squeaky wheel gets greased and there’s money to be made from government largesse — whether federal, state or local — right now. And this is surely not the first time that the courts have been used to help bring pressure to bear in that regard. But there also ought to be just a modicum of decency and social good factored in this as well. Landlords are part of the broader community, too. And we would welcome hearing more about what they are doing to assist their tenants in these difficult times and not just about their profit margins.
The Baltimore Sun editorial board — made up of Opinion Editor Tricia Bishop, Deputy Editor Andrea K. McDaniels, writer Peter Jensen and summer intern Anjali DasSarma — offers opinions and analysis on news and issues relevant to readers. It is separate from the newsroom.