Apartment complex owners in Howard County will have to give county agencies and tenant associations the first right of refusal before selling their properties if a bill currently before the Howard County Council is passed.

Council Bill 13-20 introduced by Councilwoman Christiana Rigby echoes legislation passed in Montgomery County a decade ago. That bill expanded on a state law that established notice provisions and a right for local governments to purchase apartment complexes being sold for condominium conversions. Montgomery County Council subsequently passed a bill claiming the right to intervene in apartment-building sales whether or not the properties were slated to become condos. 

In recent years, the Howard County Housing Commission has purchased five rental complexes after receiving notice of intent to sell. However, the Housing Commission suspects they have not received notice of all transactions and are concerned that they are in a poor bargaining position when bidding in an open market. With the number of housing allocations in the county declining and council-imposed building restrictions closing off new construction, older, Class B and C residential rental complexes are candidates for renovation and repositioning.

Council Bill 13-20 would require the Howard County Housing Commission, the county and any tenant organization to be offered a right of first refusal [ROFR] to match a contract of sale for any apartment complex with five or more units.  The bill would require sellers to grant a 90-day option to match an executed contract of sale and allow 180 days to close. A transaction may be exempted if the owner agrees to covenants maintaining 40-year affordability on either 20% of all units or the existing number of affordable units, whichever is greater. 

Real estate groups and brokers oppose the bill based on a long list of concerns about equity and the certainty that delays will complicate financing, reduce buyer pools and lower sales prices. 

Howard County Council took written testimony on March 27 and tabled the legislation at its April 6 legislative session. CB 13-20 has been in development since well before COVID-19 came to dominate events.  Currently, it is unclear whether it will be taken up again or left on the table by a county council forced to reprioritize its post-pandemic agenda.