How is the District planning to improve rent control?
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The District’s rent control law is based on the Rental Housing Act of 1985 and applies to all housing accommodations, however there are exemptions. Rent control does not apply to units built after 1975, subsidized rental units, landlords who own less than four units, housing that is under a building improvement plan, or units that were vacant at the time the Act was implemented, according to the Department of Housing and Community Development. Larger allowable rent increases such as petitions and capital improvements must be approved by Rent Administrators. Tenant advocates say the rent control law needs to be updated and give more protections to those in need of affordable housing.
One of the more contentious bills on the table would stipulate that rent-stabilized units only be allowed to be rented by tenants with a monthly income less than five times the unit’s monthly rent: The Rent Stabilization Affordability Qualification Amendment Act of 2020. Johanna Shreve, chief tenant advocate at the Office of the Tenant Advocate (OTA), said the proposal would cause more difficulties for income certification. “There is no oversight in this bill rendering it meaningless and an inordinate amount of administrative burden,” Shreve said. “I reject this measure and means-testing altogether.”
I have now heard twice through the rent control hearing that there is no evidence high income tenants live in rent controlled buildings. Here is the distribution of renters and rental apartment units in DC. pic.twitter.com/GMalLjnH4H
— Yesim Sayin Taylor (@yesimsy) September 24, 2020
Two of the proposed bills — the Substantial Rehabilitation Petition Reform Amendment Act of 2020 and the Capital Improvement Petition Reform Amendment Act of 2020 — would clarify when a housing provider would be allowed to petition to increase the rent of a stabilized to pay for a “substantial renovation.” This applies to renovations worth more than half the value of the property itself. The updated regulation would only allow this kind of renovation when the rent administrator finds it to be in the interest of the tenant. Otherwise, tenants can be priced out of a building when the rent is legally increased due to heavy investment in amenities and upgrades, ultimately resulting in a building for wealthier tenants.
The Rent Concession Amendment Act of 2019 clarifies when a rent increase may be implemented by a housing provider. The proposal also defines that the yearly rent increase should be applied to the concession rate the landlord and tenant agreed to rather than the original rent charge along with requiring rental advertisements to include the proposed rent charged.
Lastly, the Voluntary Agreement Moratorium Agreement Act of 2020 would put a two-year moratorium on “voluntary agreements” between tenants and landlords. Critics argue that landlords often pressure tenants into signing these agreements, which allow the landlord to raise rent in exchange for some improvement to the unit. In February, a Greater Greater Washington contributor described “sign[ing] away the rents of our rent-controlled apartments in exchange for protections, buy-outs, and new amenities” when their building was put up for sale. She wrote that both potential buyers of the building made it clear that the purchase would be contingent on tenants signing a voluntary agreement allowing the new owner to raise the rent beyond rent-control limits.
Both tenant advocates and landlords were not satisfied with the five bills discussed in September. “We recognize the need for rent control. We separately need comprehensive rent control reform,” said Elinor Hart, a member of D.C. for Democracy. “The omnibus act will also eliminate voluntary agreements, the hardship petition process, expand buildings built after 1975 and end vacancy increases.”
Hart was referring to legislation introduced in July by Ward 1 Councilmember Brianne Nadeau and Ward 8 Councilmember Trayon White, the Rent Stabilization Program Reform and Expansion Amendment Act of 2020. At-Large Councilmember and Committee Chair Anita Bonds announced at the start of the hearing that a hearing for that legislation was tentatively set for Nov. 5. It was referred to her committee two days prior.
Dean Hunter, CEO of the Small Multifamily Owners Association, said the proposed measures would harm small landlords, who don’t have the resources to go through the new process for substantial renovation petitions. “Landlords are hurting,” Hunter said. “This is just going to hurt them more.”
One hundred and twenty-four District residents testified during the nine-hour hearing and many endorsed the Reclaim the Rent Control Coalition, who had been encouraging residents to sign up to testify in the days leading up to the hearing. The coalition, which backs the legislation that will be considered on Nov. 5, aims to revamp D.C.’s rent control through a variety of measures, like expanding what buildings are subject to rent control and eliminating voluntary agreements entirely.
Polly Donaldson, director of the D.C. Department of Housing and Community Development, opposed all the measures except for the temporary moratorium on voluntary agreements. For the others, she said the regulations would be too difficult to enforce.
Shreve, the OTA chief tenant advocate, said the proposals were “as long overdue as [they] are critically important.” She supported all of the proposal outside of the affordability qualification bill and noted that the rent control measures are more important than ever.
“Since the public health emergency started, there has been an increase in unlawful rent concession practice,” Shreve said.
A rental concession occurs when a landlord reduces the original rent charged for a unit to entice new renters or retain existing tenants. However, some landlords use the concession as a loophole by calculating annual rent increases based on the original rent charged instead of the discounted rent, which can leave tenants with higher than expected rent increases.
“Our city is not a welcoming place to low-income people and this has been an issue even before the pandemic. Our rent control system is not adequate to protect our neighbors from rising rents and from real estate speculation. It’s not adequate to make sure that as white folks like me move into this city that we are not displacing Black people who have lived their entire lives here” testified Chris Bangs, a Ward 2 resident since 2016. “I strongly support the Reclaim Rent Control platform in its entirety, and I would specifically encourage you, Councilperson Bonds, to not reevaluate things in light of the pandemic, because this has been a problem for many many years, one that many people have promised to fix.”
The Census Bureau found that 23,684 D.C. renters reported not being caught up on rent at the end of September. The D.C. Council passed a measure on Sept. 22 that would allow Mayor Bowser to extend the public health emergency related to the coronavirus pandemic through Dec. 31, pushing back the earliest date evictions could legally resume by another 60 days.