HARRELL, J.
Appellants, four owners of affected rental properties in the City of College Park
Two years prior to the enactment of the City's rent control program in 2005, following discussions about using rent stabilization as a response to public concerns of rising rental costs, neighborhood deterioration, and inflated purchase prices for homes due to the increasing number of rental conversions in the City's traditional "single-family" neighborhoods, the City Council drafted a comprehensive Housing Plan. The Housing Plan included a "neighborhood revitalization" component, which stated that "[t]he quality of life in the city can and should be raised...." In order to remedy this perceived "quality of life" problem, the Housing Plan recommended enactment of a rent control program in the City to be used as a "regulatory tool" to impair the profitability of rental conversions in so-called "single-family" neighborhoods. Specifically, the Housing Plan noted:
In April 2004, City Councilmember Robert Catlin, a retired economist, submitted a proposed ordinance which sought to implement the rent control concept outlined in the Housing Plan. Catlin's proposal provided that a rent ceiling would apply to all single-family, duplex, triplex, and quadraplex rental properties, but that larger multi-unit apartment buildings would be exempt. In Catlin's view, such a plan would decrease the number of "single-family" properties that are rental units while encouraging construction of new apartment buildings which, in turn, would improve the balance between rental supply and demand in the City. Upon Catlin's request for a review of the legality of the proposal, the City Attorney, in a memorandum, expressed concern over the validity of the proposed rent control program, stating:
Despite the concerns of the City Attorney, Catlin pressed forward with the rent control proposal.
Prior to voting on Councilmember Catlin's proposed rent control ordinance, the City commissioned Anirban Basu, a policy analyst from the Sage Policy Group (a private consultant), to produce a report
One month after the Sage Report was released, on 24 May 2005, the Mayor and City Council adopted, by a 7-1 vote, Ordinance 05-2-02 (hereinafter "the Ordinance"), which, according to its title, established a rent stabilization program in the City, set forth the fees and penalties associated with the program, and created a Rent Stabilization Board to administer the program.
The first substantive section of the Ordinance outlines the composition and requirements of the Rent Stabilization Board (hereinafter "the Board"), whose primary powers are to administer the rent stabilization program, determine and set rents "at fair and equitable levels," require registration of all rental units subject to the Ordinance, and make adjustments to the rent ceiling in accordance with the provisions of the Ordinance. See City of College Park Code (1991 & Supp. 50) (hereinafter "City Code"), §§ 15-39 to 15-54.
The Ordinance's second substantive section outlines the City's rent stabilization program itself. At the outset of this portion of the Ordinance, § 127-1, entitled "Purpose," details the intended goals of the program:
City Code § 127-1.
The core provision of the Ordinance, detailing the newly-imposed rent ceiling in the City, is found in § 127-4, entitled "Establishment of rent ceiling," which provides in pertinent part:
City Code § 127-4. Section 127-6, entitled "Rent ceiling after initial registration year," addresses the amount of the rent ceiling in the following rental years, providing in pertinent part:
City Code § 127-6.
The Ordinance continues by providing a procedure where landlords may petition the Board for a different individual rent ceiling, based on factors such as increases in property taxes, increases in maintenance or operating expenses, the cost of capital improvements made to the property, and the landlord's rate of return. Specifically, § 127-7, entitled "Individual adjustments of rent ceilings," provides in pertinent part:
City Code § 127-7. In addition to the provisions for individual adjustments of the rent ceiling on petition of a landlord, § 127-8 of the Ordinance, entitled "Hardship exemption," allows for temporary exemptions from the rent ceiling in certain circumstances, stating in pertinent part:
City Code § 127-8.A.
Where a landlord or tenant believes that he or she has been impacted unfairly by a
City Code § 127-12.
Of utmost importance to the present litigation, the Ordinance provides, in § 127-2, entitled "Applicability," that the rent ceiling established by the Ordinance does not apply to a considerable number of excepted property types, including, inter alia, hotels, university housing, and apartment buildings, stating:
City Code § 127-2. The Ordinance defines "apartment building" as "a building containing three or more dwelling units each of which contains one or more rooms suitable for occupancy as a residence and that contains a kitchen and bathroom facilities. It does not include a single-family residence, or a duplex, triplex, quadraplex as defined in § 127-3, regardless of the number of dwelling units contained in the structure, or a fraternity or sorority house." City Code § 127-3.A. As such, the rent control program established by the Ordinance distinguishes on the one hand between single-family residences, duplexes, triplexes, and quadraplexes, all of which are subject to the rent ceiling, and on the other hand apartment buildings, which are exempt from the rent ceiling.
On 27 October 2006, Appellants brought an action in the Circuit Court for Prince George's County challenging the validity of the City's Ordinance,
At the hearing on the City's motion for summary judgment, held on 16 October 2008, Appellants highlighted, largely from materials adduced as the result of discovery, factual averments, including expert deposition testimony, which, in their view, supported the conclusion that the City was not entitled to judgment as a matter of law. Specifically, Appellants suggested, among other things, the following:
In response to Appellants' contentions, the City tendered other evidentiary proffers and argument to the following effect:
On 26 November 2008, the Circuit Court concluded that, finding no triable issue of material fact, the Ordinance was constitutional and otherwise legally valid. Accordingly, it granted the City's motion for summary judgment on Appellants' claims, explaining, in a written order and memorandum opinion, that, as a matter of law: (1) the Ordinance did not constitute a deprivation of Appellant's equal protection or due process rights because the stated goals of the Ordinance were legitimate and the Ordinance's rent ceiling and exemption of apartment rental units were related rationally to those purposes; (2) the Ordinance does not represent impermissible de facto zoning by the City because the Ordinance does not control or direct the use of land directly or regulate rent based upon location; (3) the Ordinance does not violate the State and County Fair Housing Acts because it does not discriminate facially on the basis of age, occupation, marital status, or familial status; rather, the Ordinance discriminates among certain types of rental properties and not based on the characteristics of the renters themselves; and, (4) the Ordinance is not confiscatory facially.
On 26 January 2009, Appellants noted timely an appeal to the Court of Special Appeals. Prior to proceedings in that court, we granted certiorari, on our initiative, 411 Md. 599, 984 A.2d 244 (2009), to consider the following questions, as framed by Appellants in their brief:
Maryland Rule 2-501, entitled "Motion for summary judgment," provides in pertinent part:
Md. Rule 2-501 (2010); see also Conaway v. Deane, 401 Md. 219, 242-43, 932 A.2d 571, 584 (2007); Charles County Comm'rs v. Johnson, 393 Md. 248, 262-63, 900 A.2d 753, 761 (2006); Beatty v. Trailmaster Prods., Inc., 330 Md. 726, 737, 625 A.2d 1005, 1010 (1993). One way to defeat a properly supported motion for summary judgment is for the party opposing the motion to demonstrate to the court that there is a triable genuine dispute as to a material fact. Beatty, 330 Md. at 737, 625 A.2d at 1011. The party opposing summary judgment must do more than show simply that there is "some metaphysical doubt as to the material facts." Id. at 738, 625 A.2d at 1011 (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538, 552 (1986)).
Whether a circuit court's grant of summary judgment is proper in a particular case is a question of law, subject to a non-deferential review on appeal. Conaway, 401 Md. at 243, 932 A.2d at 584; Charles County Comm'rs, 393 Md. at 263, 900 A.2d at 762; Beatty, 330 Md. at 737, 625 A.2d at 1011. As such, in reviewing a grant of summary judgment, we review independently the record to determine whether the parties generated a dispute of material fact and, if not, whether the moving party was entitled to judgment as a matter of law. Charles County Comm'rs, 393 Md. at 263, 900 A.2d at 762. We review the record in the light most favorable to the non-moving party and construe any reasonable inferences that may be drawn from the well-plead facts against the moving party. Conaway, 401 Md. at 243, 932 A.2d at 585; Charles County Comm'rs, 393 Md. at 263, 900 A.2d at 762.
Article 24 of the Maryland Declaration of Rights provides:
Md. Decl. of Rts., Art. 24. Although the Maryland Constitution contains no similarly expressed equal protection clause, we have observed on numerous occasions that the concept of equal protection is embodied in the due process requirement of Article 24. Conaway, 401 Md. at 272 n. 33, 932 A.2d at 602 n. 33; Verzi v. Baltimore County, 333 Md. 411, 417, 635 A.2d 967, 969-70 (1994); Kirsch v. Prince George's County, 331 Md. 89, 96, 626 A.2d 372, 375 (1993); Atty. Gen. v. Waldron, 289 Md. 683, 704, 426 A.2d 929, 940-41 (1981). In addition, we have noted consistently that,
In order to determine whether a given statute or ordinance satisfies the due process requirement of Article 24, we ask rhetorically whether the legislative enactment, as an exercise of the legislature's police power, bears a real and substantial relation to the public health, morals, safety, and welfare of the citizens of the State or municipality. Westchester West No. 2 Ltd. P'ship v. Montgomery County, 276 Md. 448, 454, 348 A.2d 856, 860 (1975); Bowie Inn, Inc. v. City of Bowie, 274 Md. 230, 236, 335 A.2d 679, 683 (1975). In applying this test, courts perform a very limited function, resisting interference unless it is shown that the legislature exercised its police power arbitrarily, oppressively, or unreasonably. Westchester West, 276 Md. at 460, 348 A.2d at 863 (noting that "[p]rice control, like any other form of regulation, is unconstitutional only if arbitrary, discriminatory, or demonstrably irrelevant to the policy the legislature is free to adopt, and hence an unnecessary and unwarranted interference with individual liberty") (quoting Nebbia v. New York, 291 U.S. 502, 539, 54 S.Ct. 505, 517 78 L.Ed. 940, 958 (1934)); see also Hargrove v. Bd. of Trustees of Md. Retirement Sys., 310 Md. 406, 427, 529 A.2d 1372, 1382 (1987); Bowie Inn, 274 Md. at 236, 335 A.2d at 683. The wisdom or expediency of a statute duly adopted by the legislative body is not subject to judicial scrutiny, and the statute will not be held void if there are any considerations relating to the public welfare by which it may be supported. Hargrove, 310 Md. at 427, 529 A.2d at 1382; Westchester, 276 Md. at 455, 348 A.2d at 860; Bowie Inn, 274 Md. at 236, 335 A.2d at 683. We have noted that "courts are under a special duty to respect the legislative judgment where the legislature is attempting to solve a serious problem in a manner which has not had an opportunity to prove its worth." Bowie Inn, 274 Md. at 237, 335 A.2d at 684. As such, courts should hesitate before invalidating an ordinance where doing so would deprive the legislative body contemplating such a statute "of any opportunity to discover whether the chosen method will be good, bad or indifferent in its results." Id. at 237-38, 335 A.2d at 684.
Where, as here, the legislative action at issue neither interferes with a fundamental right nor implicates a suspect classification,
Under both the due process and equal protection tests outlined supra, the challenged statute is presumed to be constitutional. Lonaconing, 410 Md. at 343, 978 A.2d at 711; Conaway, 401 Md. at 274, 932 A.2d at 604; Westchester, 276 Md. at 464, 348 A.2d at 865; Bowie Inn, 274 Md. at 236, 335 A.2d at 683. Where there are plausible reasons for the legislative action, the court's inquiry is at an end. Conaway, 401 Md. at 325, 932 A.2d at 635. In this vein, we have described rational basis review as "`the paradigm of judicial restraint,'" noting that "`[t]he Constitution presumes that, absent some reason to infer antipathy, even improvident decisions will eventually be rectified by the democratic process [and] that ... judicial intervention is generally unwarranted no matter how unwisely we may think a political branch has acted.'" Id. (quoting Fed. Commc'ns Comm'n v. Beach Commc'ns Inc., 508 U.S. 307, 314, 113 S.Ct. 2096, 2101, 124 L.Ed.2d 211, 221 (1993)); see also Md. Aggregates Assoc. v. Md., 337 Md. 658, 673, 655 A.2d 886, 893-94 (1995). It is not the Court's "province to determine the fairness or desirability of legislative [decisions and] classifications;" that question is left to the legislature itself and ultimately to the affected electorate. Hargrove, 310 Md. at 424, 529 A.2d at 1381.
In applying these standards then, we must consider two questions with regard to Appellants' constitutional facial challenge to the Ordinance's validity, namely, (1) whether the Ordinance's stated objectives are legitimate governmental ends, and (2) whether the means chosen by the City in the Ordinance bear a rational relationship to achievement of those ends. See Rios v. Montgomery County, 386 Md. 104, 121, 872 A.2d 1, 10 (2005) (noting that, "unless a suspect or quasi-suspect class is created or a fundamental or important right is implicated," the appropriate standard of review under due process or equal protection analysis is rational basis review). For reasons we shall explain, we answer each question in the affirmative. As such, we conclude that the Circuit Court did not err in granting summary judgment to the City on Appellants' Article 24 claims, as plead.
As noted by Appellants, the traditional purpose of rent control regulation has been the protection of tenants from exorbitant rents. Appellants pointed at the summary judgment hearing in the Circuit Court to an "expert statement" from their expert witness, Dr. Stephen S. Fuller, a nationally recognized market economist, to this effect. Dr. Fuller explained:
We noted as much in Riger v. L & B Limited Partnership, 278 Md. 281, 363 A.2d 481 (1976), where we stated that "[a] rent control program is designed to regulate the economy, stemming inflation in rental housing where normal market factors are not operating to keep housing costs down." Id. at 295, 363 A.2d at 490. Courts in other jurisdictions have noted similar traditionally-accepted problems for which rent control has been held to be a rational legislative response, including housing shortages, widespread imposition of exorbitant rents, monopoly control of the housing market, and the prevalence of substandard housing. See, e.g., 440 Co. v. Borough of Ft. Lee, 950 F.Supp. 105, 108 (D.N.J.1996) (finding that "the validity of a rent control ordinance depends upon the existence of conditions that justify the use of municipal police power to regulate prices," and that a municipality enacting a rent control ordinance must possess a set of facts which permit it to conclude rationally that "the competitive rental housing market is not operating in the public interest" (quoting Troy Hills Village v. Twp. Council of Parsippany-Troy Hills Twp., 68 N.J. 604, 350 A.2d 34, 40 (1975))); MHC Operating Ltd. P'ship v. City of San Jose, 106 Cal.App.4th 204, 130 Cal.Rptr.2d 564, 576 (2003) (noting that "the purpose of rent control" is to "prevent excessive rents"); Apt. Ass'n of Greater L.A. v. Santa Monica Rent Control Bd., 24 Cal.App.4th 1730, 30 Cal.Rptr.2d 228, 229 (1994) (observing that "[r]ent control is a proper exercise of a city's police power if the regulation is `reasonably calculated to eliminate excessive rents and at the same time provide landlords with a just and reasonable return on their property'" (quoting Birkenfeld v. City of Berkeley, 17 Cal.3d 129, 130 Cal.Rptr. 465, 491, 550 P.2d 1001 (1976))); Dep't of Ins. v. Dade County Consumer Advocate's Office, 492 So.2d 1032, 1042 (Fla.1986) (stating that the constitutional justification for rent control is "the protection of [tenants] from economic depredation by [landlords]"); Brunetti v. New Milford, 68 N.J. 576, 350 A.2d 19, 28 (1975) (noting that, in the context of rent control, rationales "include but are not limited to proof of a housing shortage, widespread imposition of exorbitant rents, monopoly control of rental housing market or prevalence of substandard housing"); Somers Associates, Inc. v. Gloucester Twp., 241 N.J.Super. 323, 575 A.2d 20, 24 (App.Div.1990) (noting that the traditional primary purpose of rent control is "protection of tenants, usually with fixed or limited incomes, from burdensome impairments of their standard of living").
Nevertheless, courts also recognize a number of other legitimate governmental objectives in addressing housing concerns, including "the restoration and revitalization of urban housing," see, e.g., Allen v. Brodie, 573 F.Supp. 87, 90 (D.Md.1983), "promoting and preserving neighborhoods that are conducive to families," particularly those with young children, have stable populations, and have low traffic, see Ames Rental Prop. Ass'n v. City of Ames, 736 N.W.2d 255, 260 (Iowa 2007), and "preserving the character of single-family residential
The stated objectives of the Ordinance are articulated in § 127-1.A, which describes the purpose of the City's rent control program as follows:
City Code § 127-1.A. Although the above-stated goals differ from the traditional purpose of rent control legislation, namely, the protection of tenants from exorbitant rents, we cannot say, in light of the relevant case law and the broad discretion granted legislative bodies to determine and protect the public interest, that the goals of the Ordinance are illegitimate governmental ends.
As to the first two stated goals of the Ordinance, encouraging the availability of housing for households of all income levels, including university students, and preserving, maintaining, and improving existing housing, the City maintains that it is reasonable to believe that capping rent in detached dwellings in single-family neighborhoods, but not in apartment buildings, will encourage builders, investors, and the University of Maryland to expedite the construction of apartment buildings capable of housing hundreds of renters in and near the City. In addition, the City asserts that the rent control program would reduce speculative pressure on home prices in single-family neighborhoods, thereby lowering home prices in those neighborhoods and make them more attractive for single-family use. The City contends that it is not irrational to believe that an acceleration in apartment building construction would improve the quality of housing options for renters and that increasing home ownership would help preserve, maintain, and improve housing in traditional residential neighborhoods on the theory that homeowners commit more resources to the maintenance of their homes than do renters and landlords. In response, Appellants direct our attention to the "expert statement" of Dr. Fuller to the effect that it is his opinion that the Ordinance would result in an increase in the cost of rental housing generally by restricting the supply of less expensive units in single-family neighborhoods, while permitting apartment buildings to increase rents due to increased demand, and that rent caps generally lead to further deterioration of rental properties.
Regarding the Ordinance's second major goal, namely, strengthening City neighborhoods by reducing the number of single-family homes that are rental properties, the City relies on research explicated in the Sage Report demonstrating that renters are cited more frequently for litter and garbage violations than occupying homeowners. Appellants retort by explaining, in considerable detail, that although renters are cited more frequently
Regarding the Ordinance's final purpose, encouraging private reinvestment by homeowners consistent with a neighborhood's character, we agree with the City's contentions that it is not irrational to believe that neighborhoods with a high number of private, owner-occupied residences, which, according to the City, will be the likely result of its rent control program, will be more stable than neighborhoods populated by properties whose market prices are driven by absentee landlords speculating on the future of the rental market. The opinion of the Utah Supreme Court in Anderson reached a similar conclusion. In that case, the City of Provo amended a zoning ordinance governing residential neighborhoods near Brigham Young University to allow only those homeowners who reside in their homes to rent out "accessory apartments," resulting in a distinction drawn between occupying and non-occupying landlords. Anderson, 108 P.3d at 703. Against an equal protection challenge, the court upheld the validity of the amendment, concluding that the disparity in treatment was justified reasonably by the council's "stated objective of balancing the city's competing interests in accommodating student housing needs and in preserving the character of single-family residential neighborhoods." Id. at 708. Specifically, the court noted that the city concluded reasonably that "preventing absentee landlords from dominating ... neighborhoods would help to retain the neighborhoods' single family character rather than converting them, in effect, to duplexes with both units often occupied by semitransient residents." Id.
As acknowledged supra, it is possible that the City's rent control program may prove unsuccessful in addressing effectively the goals identified in § 127-1.A. Nevertheless, it is clear that, despite Appellants' considerable criticism of the City's methods and legislative fact-finding, the City is not without a rational basis to its belief that the Ordinance may achieve its stated objectives. As such, we hold that the Ordinance does not violate on its face Appellants' due process and equal protection rights under Article 24 because there is a rational relationship between the purported goals of the Ordinance, which we have found to be in the acceptable range of legitimacy, and the method chosen by the City to achieve those goals, namely, imposition of a rent control regime.
Maryland Code, State Government Article § 20-705, entitled "Discriminatory housing practices-Sale or rental of dwelling," provides in pertinent part:
Md.Code (1984, 2009 Repl.Vol.), State Gov't Art. § 20-705. The prohibition against discriminatory housing practices extends to local governments, which may enact housing-related ordinances so long as the ordinance "does not authorize any act that would be a discriminatory housing practice under this subtitle." Md.Code, State Gov't Art. § 20-703(4). Thus, Prince George's County Code § 2-210, entitled "Sale or rental of housing; exception," provides in pertinent part:
Prince George's County Code (2003 & Supp. 2005) § 2-210(a).
According to Appellants, the Ordinance's text and legislative history demonstrate that it was enacted for the discriminatory purpose of removing renters, particularly student renters, from residential neighborhoods in the City and segregating them from homeowners because the City believes that renters are undesirable neighbors. On this basis, Appellants contend that the Ordinance violates the State and County Fair Housing Acts by discriminating in housing on the basis of age, occupation, marital status, or familial status. We disagree.
By its very terms, the classification employed by the Ordinance distinguishes between rental units in traditional single-family neighborhoods and rental units in apartment buildings, among other types of excepted properties. On its face, the Ordinance does not discriminate in violation of the State or County Fair Housing Acts because it does not distinguish impermissibly between groups based on some characteristic of the group. Although it is true that the Ordinance may impact students more than any other demographic of renters due to the fact that most renters in the City are students at the University of Maryland, this alone cannot form a basis to conclude that the Ordinance discriminates facially on the basis of age, occupation, marital status, or familial status. As noted by the Circuit Court, people of every age, occupation, marital status, and familial status will be affected in the same manner if they live in rental housing in single-family neighborhoods. Thus, we conclude that the Ordinance on its face does not violate the State or County Fair Housing Acts.
With the exception of the City of Laurel, municipal corporations within Prince George's County, including the City of College Park, are "not authorized, by means of an amendment to its charter or otherwise, to exercise any of the powers relating to planning, subdivision control, or zoning granted by the Maryland-National Capital Park and Planning Commission or the County Council of Prince George's County." Md.Code, Art. 28, § 7-103(b). Appellants contend that the Ordinance must be nullified as an act of "de facto zoning" by the City, beyond its enumerated powers. They are mistaken.
In Maryland Overpak Corp. v. Mayor & City Council, we defined zoning as the "`process of setting aside disconnected tracts of land varying in shape and dimensions,
As noted by the City in its brief, the Ordinance does not divide the City into districts, define lot sizes, or mandate particular uses of any specific parcels or buildings. Rather, the Ordinance sets a limit on the amount of rent a single-family property owner may charge his or her tenants. That the Ordinance may contemplate land use changes, i.e., shifting rental housing into apartments and out of single-family neighborhoods, does not inherently convert what is a rent control ordinance into a zoning ordinance. See Donnelly, 279 Md. at 665-66, 370 A.2d at 1130-31 (finding that a municipal ordinance regulating signs under the police power was not an exercise of zoning power "[a]lthough it is within the scope of the zoning power to regulate signs"). As such, we reject Appellants' characterization of the Ordinance as an attempt by the City to engage in impermissible "de facto zoning."
Finally, Appellants contend that the City's method for calculating the rent ceiling, on its face, cannot possibly ensure a fair return on landlords' investments and, for that reason, is impermissibly confiscatory. A number of courts have found that rent control regulations may be considered to have a confiscatory effect "if no rent adjustment mechanism is provided" and the terms of the rent control ordinance "will not permit those who administer it to avoid confiscatory results in its application to the complaining parties." Apt. Ass'n of Greater L.A., 30 Cal.Rptr.2d at 232; see also Richardson v. City and County of Honolulu, 802 F.Supp. 326, 332-33 (D.Haw.1992) (noting that a municipal rent control ordinance may be facially confiscatory where it provides "no meaningful mechanism for obtaining relief when the lease rent formula results in a confiscatory rate"). For example, in Brunetti, the New Jersey Supreme Court observed that an ordinance may be confiscatory where it is so restrictive as to preclude facially any possibility of a just and reasonable return for landlords. 350 A.2d at 27. In that case, however, the court determined that the rent control ordinance at issue, which fixed rents at a given base level and permitted annual increases in rental charges, was not confiscatory facially because, although the annual increases were not unlimited, the ordinance permitted landlords to apply for unlimited rental increases in the event that he or she could demonstrate that he or she could not realize a reasonable profit from his or her investment. Id.
The Ordinance here accounts clearly on its face conceptually for landlords to receive a fair return on their investment.
Appellants waged unsuccessfully their battle against the City's initiative for a rent control program in the legislative arena. Undeterred, they turned to the Circuit Court, seeking essentially a spring board declaration that the Ordinance was unconstitutional on its face or otherwise legally invalid. In the view of that court, the Ordinance does not violate Article 24 because the City's goals in enacting the Ordinance were legitimate and the means selected to achieve those goals were rational, putting aside the likelihood of success. Similarly, the Circuit Court held that the Ordinance does not discriminate against student renters in violation of the State and County Fair Housing Acts, nor does it constitute an impermissible act of "de facto zoning" by the City. Finally, the trial court concluded that the Ordinance does not effect a facially confiscatory taking, as it permits landlords the ability to
BELL, C.J., BATTAGLIA, and MURPHY, JJ., Dissent.
BATTAGLIA, J., dissenting in which BELL, C.J., and MURPHY, J., join.
I respectfully dissent. The majority erroneously concludes that the rent control ordinance at issue in this case furthers a legitimate governmental purpose and, thus, does not violate Article 24 of the Maryland Declaration of Rights.
As the majority explains, it is well-settled that Article 24 contains an implied equal protection guarantee, despite the fact that its text contains no explicit language pertaining to equal protection. Majority op. at 415 Md. at 499-500, 3 A.3d at 434-35; Lonaconing Trap Club, Inc. v. Md. Dep't of the Env't, 410 Md. 326, 340 n. 15, 978 A.2d 702, 710 n. 15 (2009); Verzi v. Balt. Cnty., 333 Md. 411, 417, 635 A.2d 967, 969-70 (1994); Murphy v. Edmonds, 325 Md. 342, 353, 601 A.2d 102, 107 (1992). See also Atty. Gen. v. Waldron, 289 Md. 683, 704 n. 8, 426 A.2d 929, 941 n. 8 (1981) (explaining that the Supreme Court has reached a similar result in interpreting the Due Process Clause of the Fifth Amendment). I further agree with the majority (and both parties) that the rational basis test applies to the instant case, because "neither a suspect class nor a fundamental right or interest is implicated," and thus, heightened scrutiny does not apply. Id. at 706-07, 426 A.2d at 942.
Under rational basis review, a statute is presumed constitutional, and a party alleging otherwise must prove by clear and convincing evidence that the statute either does not further a legitimate state interest, Verzi, 333 Md. at 418, 427, 635 A.2d at 970, 975, or that "the means chosen by the legislative body are `wholly irrelevant to the achievement of the State's objective.'" Waldron, 289 Md. at 707, 426 A.2d at 942, quoting McGowan v. Maryland, 366 U.S. 420, 425, 81 S.Ct. 1101, 1105, 6 L.Ed.2d 393, 399 (1961); accord Lonaconing, 410 Md. at 343, 978 A.2d at 711-12 ("Furthermore, `the party attacking [a statutory classification] must show by clear and convincing evidence that it does not rest upon any rational basis but is essentially arbitrary.'") (quoting Md. Dep't of Transp. v. Armacost, 299 Md. 392, 409, 474 A.2d 191, 199 (1984)). Nevertheless, our cases demonstrate that rational basis review is not "`toothless.'" Waldron, 289 Md. at 710, 426 A.2d at 944, quoting Mathews v. Lucas, 427 U.S. 495, 510, 96 S.Ct. 2755, 2764, 49 L.Ed.2d 651, 664 (1976).
Likewise, in Kirsch v. Prince George's County, 331 Md. 89, 626 A.2d 372 (1993), we held that a so-called "mini-dorm" zoning ordinance violated equal protection. The ordinance, enacted by Prince George's County, but apparently intended to combat a perceived problem concerning noise, litter, and parking in neighborhoods surrounding the University of Maryland at College Park,
Id. at 93, 626 A.2d at 373-74, quoting Prince George's County Code (1990), Section 27-107.1(a) (150.1) (emphasis omitted). Because no suspect class or fundamental right was implicated, we applied the rational basis test. Kirsch, 331 Md. at 104, 626 A.2d at 379. We, nevertheless, held that the zoning ordinance was not rationally related to its stated "objective of clearing residential neighborhoods of noise, litter, and parking congestion." Id. at 106, 626 A.2d at 380. We reasoned that differentiating "between permissible residential tenant classes by creating more strenuous zoning requirements for some and less for others based solely on the occupation which the tenant pursues away from that residence [was] that sort of arbitrary classification forbidden under our constitutions." Id. See also id. at 104-05, 626 A.2d at 379-80 (collecting cases where we applied the rational basis test to invalidate statutes regulating occupations, because the classification schemes were essentially arbitrary).
In Verzi v. Baltimore County, 333 Md. 411, 635 A.2d 967, we determined that a county ordinance mandating that a licensed tow operator maintain a place of business within that county as a precondition
In the case at bar, we are faced with a classification of landlords: "favored" landlords, commercial enterprises that operate multi-occupant and high-rise apartment complexes; and "disfavored" landlords, primarily individuals who own single-family houses and rent them to students attending the University of Maryland at College Park. The openly-acknowledged purpose of the classification scheme is to depress rents that "disfavored" landlords can charge, so that the "favored" landlords are placed in a more advantageous position. The hope is that the single-family homeowners, unable to charge sufficient rents to cover their expenses, will cease their endeavors, thereby creating a decrease in the supply of "disfavored" rental units. This "engineered" rental housing shortage will then result in more "favored" apartment units in the City of College Park, built by commercial entrepreneurs.
What is striking about this scheme is that nowhere does it address the needs or interests of renters, nor does it protect the otherwise appropriate use of private property. Rather, the College Park rent control ordinance is intended to penalize a "disfavored" class of landlords, for the benefit of two other groups: a "favored" class of commercial landlords, whose bottom line will fatten through elimination of a competitor; and owner-occupants of single-family houses in the neighborhoods adjacent to the University, who do not rent their dwellings, and anticipate rising home prices (or perhaps greater quality of life) through elimination of the rental market for single-family houses.
Undoubtedly some renters, those fortunate enough to be able to continue occupying the rent-controlled housing, likely also will benefit in the short term by paying below-market rents, but the ordinance does not appear to countenance this result. The ultimate result of the ordinance appears likely to be higher rents, on average, than would otherwise prevail in its absence, because the clear purpose and likely effect will be to create an artificial shortage of the least expensive rental units, while encouraging profiteering by the operators of the most expensive units.
I also would point out that the City's assertion that the "disfavored" rental properties are to blame for the lion's share of code enforcement problems has little or no evidentiary support in the record. Although it may be sufficient to hypothesize any reasonably conceivable state of facts tending to support a statutory classification scheme, Montgomery Cnty. v. Fields Road Corp., 282 Md. 575, 580, 386 A.2d 344, 347 (1978) ("`When the classification in such a law is called in question, if any state of facts reasonably can be conceived that would sustain it, the existence of that state of facts at the time the law was enacted must be assumed.'") (quoting Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 78, 31 S.Ct. 337, 340, 55 L.Ed. 369, 377 (1911)), such a presumption still must be reasonable. In my view, if code enforcement is a problem, the simple answer would be to enforce the housing code. In any event, any step short of closing down the University would be unlikely to ameliorate the problem, because the concerns
Finally, without addressing Tyler's contention that the rent control ordinance is confiscatory, the "review" process also raises due process concerns. College Park Code Section 127-7 authorizes the Rent Stabilization Board to grant "individual rent ceiling adjustment[s]" when persuaded by a preponderance of the evidence "that such adjustments are necessary to provide the landlord with a fair return on investment." Code Section 127-8 authorizes the Board to grant "temporary exemption[s]" in cases of "extreme financial hardship because of mortgage or financial obligations related to the property incurred before the effective date of [the Ordinance]." Each of these sections provides the Board with what amounts to unbridled discretion to determine what constitutes a fair return on investment or what constitutes an extreme financial hardship. Permitting the Board to apply such amorphous standards is tantamount to granting the Board legal authority to act arbitrarily and capriciously.
Admittedly, the statutory scheme may stifle the ability of private homeowners to rent their dwellings to college students, which is its purpose. This does not mean, however, that the rational basis test is satisfied. Rather, it is the purpose itself, I would submit, that is illegitimate.
To diminish the capacity of private homeowners to rent their properties through a deliberate scheme to squeeze rents below that required for maintenance and a fair operating profit, in favor of commercial vendors not similarly constrained, absent a legitimate public benefit, is to permit the government to act as a henchman for high rise owners, not a steward of the public interest. There is no reasonable argument that leasing one's house to a tenant is against the public interest or should be legally disfavored in any way. See, e.g., Simard v. White, 383 Md. 257, 269 n. 11, 859 A.2d 168, 175 n. 11 (2004) (warning against assaults on property rights "`carried out in the name of "common good," an elastic concept, defined by those whose interests it serves'") (quoting Richard Pipes, Property and Freedom 225 (1999)). Consequently, there is no legitimate public purpose furthered by the City rent-control ordinance in the present case, but rather, a private benefit conferred on a class that may be favored in the political realm. As in Verzi, I can "find no rational basis for the distinction between [high-rise landlords] and [landlords renting out single-family houses]," and thus am "led to the more reasonable and probable view . . . that [the classification] was intended to confer the monopoly of a profitable business upon [favored interests]." 333 Md. at 427, 635 A.2d at 974 (internal quotation marks omitted). I respectfully dissent.
Chief Judge BELL and Judge MURPHY have authorized me to state that they join in this opinion.
The opinion of the Iowa Supreme Court in Ames shares that view. Ames, like the procedural track taken by the present case, was decided by the trial court in favor of the city by the grant of summary judgment in a declaratory judgment action. The Iowa Supreme Court affirmed. In that case, the court considered the validity of a city zoning ordinance which only permitted single-family dwellings in certain areas of the city, and defined "family" as "any number of related persons or no more than three unrelated persons." Ames, 736 N.W.2d at 257. Upon equal protection challenge by a city landlord association, the court upheld the validity of the ordinance, finding that it was related rationally to the government's interest in providing quiet neighborhoods, even though the classification between related and unrelated persons relied heavily on stereotypes that groups of unrelated persons living together typically do not establish roots in the community, do not provide playmates' for neighbors' children, attract large numbers of friends, and create additional noise and traffic. Id. at 261-63. In addition, the court noted that, although the landlord association may be correct that the ordinance would do little to further the city's goals, it was the city's prerogative "to fashion remedies to problems affecting its residents" and that, should the ordinance prove ineffective, "the elected city council may change course and amend or repeal" the ordinance. Id. at 263.
Although the Ordinance at issue here may have a considerable impact on students in the City, because they are nearly always renters rather than homeowners, Kirsch does not control here. The Ordinance does not make distinctions on the basis of occupation (students versus non-students). Rather, its operative premise is based on the type of rental property in question. Although in Kirsch we concluded that the distinction between students and nonstudents bore no rational relationship to the goal of reducing noise, litter, and parking congestion because both groups were equally capable of committing such violations, the City presented a considerable evidentiary proffer suggesting that capping rent on single-family homes, while exempting apartment buildings, will lead to the accomplishment of its goals of making housing in the City more affordable, reducing the number of certain code violations, and stabilizing residential neighborhoods in the City.
Appellants make the further contention that the methods chosen by the City to calculate the rent ceiling, including the use of CPI, the HUD value, and the percentage of assessed value figure, were chosen arbitrarily by Councilmember Catlin and the City Council and bear no rational relationship to the goals set forth in the Ordinance. We disagree. The City provided the Circuit Court with explanations underlying its reliance on those figures which demonstrated that they were not chosen in an entirely arbitrary fashion. Likewise, in light of those facts, we cannot say that use of these figures in calculating the rent ceiling is unreasonable completely. See Brunetti, 350 A.2d at 27 (finding that formulae for calculating rent increases that rely on CPI or fixed percentage rates "bear a rational relation to the legitimate municipal purpose of stabilizing rental levels").