Three Gaithersburg employees living in city-owned houses will see their rents rise in January, one by nearly $800.

The houses at 300 Dogwood Drive, 307 S. Frederick Ave. and 2 James St. are leased monthly by public works employees for $350, $704 and $400, respectively.

City Council members said in August that they did not know the city owns the properties and staff live there. They agreed with City Manager Angel Jones that staff should pay market rental rates.

Public Works Supervisor Robert E. Johnson, who lives in the three-bedroom Dogwood Drive house, has not seen his rent rise since July 1989, according to city records. His $350 rent will increase to $1,125, which does not include utilities.

Johnson did not return calls for comment.

He will no longer be performing tasks in exchange for the low rent, including locking and unlocking three bathrooms daily outside City Hall, Jones said.

Jones asked staff to obtain assessments of the fair market monthly rental value of the three properties. Prudential Carruthers Realtors, Realty Group Property Management and Century 21 Real Estate of Gaithersburg respectively suggested $1,200, $1,050 and $1,150 in rent for the Dogwood Drive property, which is a 1,728-square-foot house on a one-acre lot.

Rent for the two-bedroom house on South Frederick Avenue, which has been rented by Mario Carmona-Padilla, an equipment operator, for $704.17 a month, will increase to $863. He has been renting the property since January 2005.

And the James Street property — a one-bedroom caretaker's house with a screened porch next to the city's Observatory Park — will rent for $938. The change marks a $538 net increase for Keith Vogel, a fleet maintenance supervisor who has been paying $400 monthly rent since September 2004.

Director of Finance Administration Harold Belton recommended in an Oct. 22 memo that once the rates go into effect, the mayor and council should amend the housing stipend policy to make the program available to employees who live in city-owned properties, as they will be paying the fair market rents.

Under the 2009-2010 maximum income limits, Vogel and Carmona-Padilla would qualify for $200 and $300 stipends.

The city will designate an apartment in the Casey Community Center known as "the mousehole" as a caretaker's residence, according to Belton's memo. Jones has adjusted the facility's custodian/maintenance worker job description to include corresponding caretaker responsibilities. Tommy Mason has lived there rent-free since June 2006.