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ontgomery County's reputation in the real estate industry is taking a hit, and it's not just local developers who are sounding the alarm. A nationally recognized real estate writer has publicly criticized our county, using terms like "redlined" and "exit strategies" that don't exactly inspire confidence.

    Jay Parsons, a journalist and economist with a widely read newsletter, attended the National Multifamily Housing Council's annual meeting in Las Vegas last week. He summarized the discussions at the conference on X, highlighting the challenges facing the multifamily industry. While some trends are positive, such as strong demand and falling supply, others are more ominous.

    Parsons noted that deal flow is stagnant due to high interest rates, making it difficult for investors to pencil out deals unless prices fall or sellers become more flexible. He also mentioned that many groups have raised capital targeting newer assets at discounted prices, but this strategy has proven challenging to execute at scale.

    One of the most striking comments from Parsons was his observation that some coastal cities, including our Maryland suburbs, have been "redlined" by institutions due to regulatory risks and concerns about future policies. This means that investors are avoiding these areas in favor of more stable markets.

    Locally, I've spoken with several sources in the real estate industry who share similar concerns. One developer explained how rent control and state and county building energy performance standards (BEPS) laws are making it difficult to finance new projects. Another source noted that equity investors are increasingly hesitant to put their money into Montgomery County due to the risks associated with rent control, vacancy control, and potential future regulations.

    A third source pointed out that the cumulative impact of these policies, combined with skyrocketing assessments and property tax increases, is making our county a less attractive destination for lenders and investors. "It's not just about MoCo," this source said. "It's about the risks associated with investing in a jurisdiction with such a hostile regulatory environment."

    The message from my sources is clear: Montgomery County's reputation as a desirable place to invest in real estate is suffering, and it's time for our leaders to take notice.

    One developer I spoke with noted that the county council's proposed housing package will do little to mitigate the underlying legislative damage. "It's just more of the same," this person said. "We need to rethink our approach to development and create an environment that's more welcoming to investors."

    Another source echoed this sentiment, saying that the financial world is increasingly wary of investing in jurisdictions with rent control laws. "The recent BEPS regulations are just icing on the cake," this person noted.

    As one of my sources so aptly put it, Montgomery County's tax base and public services are headed for a fall if our leaders don't get their act together. It's time to take a hard look at our policies and create an environment that's more conducive to growth and investment.