Around the country, local government leaders realize that housing is too expensive. But instead of focusing on reforms that would make it easier to build more, they distract themselves with supposed quick fixes that don’t address the core problem.
This is exactly what’s going on in Montgomery County, Maryland, where median home prices are five times the county’s median income. So lawmakers and residents are debating the proposed Anti-Algorithmic Price Fixing Act. The bill would restrict landlords from using software to help them determine rental rates. Supporters say the legislation would prevent landlords from colluding to set high prices.
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Price collusion is a legitimate concern, but it’s not the primary driver of high housing costs in either Montgomery County or the state of Maryland, which has a shortage of approximately 100,000 housing units. The real problem: years of underbuilding, caused by state and local policies.
Recent debates over “missing middle” housing have exposed just how difficult it is to build the units that the county and state need. Montgomery County leaders proposed zoning changes that would allow duplexes, triplexes, townhomes, and small apartment buildings along major roads in areas that currently allow only single-family homes. These are hardly radical changes—many communities, including Minneapolis, Minnesota, and Spokane, Washington, have passed similar reforms. Officials describe the reforms as a targeted effort to create housing options for middle-income residents who increasingly cannot afford adequate housing.
Yet the backlash to the proposed zoning reforms was immediate and intense. Public meetings became contentious. Residents complained that traffic would prevent emergency vehicles from passing through and that schools would be overrun.
This opposition points to a common theme of America’s affordability crisis: many residents support affordable housing in theory but oppose the changes that would actually expand supply and make housing cheaper.
Worsening the situation, Montgomery County has layered on regulations that discourage new construction. In 2023, the county passed a rent stabilization policy that restricts how much landlords can raise rents. As a result, multifamily housing permits collapsed as developers pulled back from new projects. This shouldn’t surprise anyone: dozens of studies have found that rent-control policies reduce the supply of housing.
But instead of addressing zoning rules or rent control, Montgomery County politicians are going after software designed to help landlords better understand local market conditions. Not to be outdone, the state is also considering a software ban.
Some are rightly pointing out that a statewide ban on algorithmic pricing is more likely to reduce housing investment and affordability than to improve conditions. And even if a state law isn’t passed, the episode is reinforcing the perception that Maryland is a difficult and unpredictable place to build housing.
Rents in both the county and the state won’t come down until supply can start to keep up with demand. Reform efforts that ignore the underlying supply imbalance will fail.
Improving affordability means allowing more housing types, streamlining approvals, reducing uncertainty for builders, and understanding that while growing pains are real, growth is what maintains an area’s energy and vitality. From a political standpoint, enacting pro-supply reforms is not as easy as demonizing software. But easy political narratives don’t build the homes people need.
Until state and local leaders in Maryland confront the reality that overregulation is the real problem, affordability will remain out of reach for the very residents whom local leaders say they want to help.