Councilmember Anita Bonds (At-Large) symbolically closes a rent control loophole at an event in October 2016
DC has one of the strongest rent control laws in the nation. Unfortunately, several landlord-sized loopholes turn lots of ostensibly rent controlled housing into market rate units each year. But Councilmember Anita Bonds (At-Large) is working on passing a pair of bills to fix that.
The problem comes in both cases when a rental unit changes hands.
Currently, anyone living in a rent controlled building (any building built before 1975 that has five or more units) by law sees only modest increases in their rent each year. For people who find an affordable rent-controlled unit and then are able to age in place, the protections are stellar.
But when a unit experiences turnover, as units are liable to do in DC’s fast-paced rental market, landlords are able to raise prices by up to 30 percent—often essentially taking the unit to market rate. One family may leave a home that costs $1300 a month only for the next family who moves in to find themselves facing rent of $1700 a month or more.
One of CM Bonds’ bills, entitled the Rental Housing Affordability Stabilization Amendment Act of 2017, would cap that increase at just 5 percent—an amount that preserves the unit’s affordability and doesn’t incentivize pushing current tenants out the door. Publicly supported by Councilmembers Cheh (Ward 3), Silverman (At-Large), Gray (Ward 7), Grosso (At-Large), and Trayon White (Ward 8), the bill would also limit yearly rent increases to strictly the rate of inflation.
Another tactic landlords sometimes use to raise prices is to make voluntary agreements with tenant associations. It’s a process that involves several steps of abuse.
Landlords can file to raise rent above allowable rates with a “hardship petition,”* claiming that they can’t afford to make necessary improvements (or at least can’t earn enough profit while doing so) without more revenue. If their petition is accepted, tenants have no negotiating power—they can pay the new, higher rates or move out.
But sometimes landlords are unsure whether their petition would succeed or not. If that’s the case, they’ll go a different direction and use the threat of a hardship petition as a bargaining chip. In negotiating with tenant associations, landlords portray the tenants’ choices as this: you can either go through with the petition process and likely see automatic rent increases, or you can sit down with me and work on a deal where you’re guaranteed not to see any increases—but you wave future tenants’ rent control rights.
With the voluntary agreement from the tenant association in hand, landlords are able to make any unit that changes hands into a market rate apartment.
CM Bonds’ other bill, the Preservation of Affordable Rent Control Housing Amendment Act of 2017, wants to stop landlords from pitting current and future tenants against each other. It would outlaw the practice of making deals that only raise prices for newcomers, mandating that any agreed upon increases must be applied across the board.
It was co-introduced by Councilmembers Robert White (At-Large), Silverman, Cheh, and Trayon White.
If passed by the Council and signed into law, both bills would move DC closer to protecting tenants as the District’s rent control law intended.
*Another one of CM Bonds’ bills on rent control, this one targeting hardship petitions, was signed into law last December. It succeeded in lowering the return on investment guaranteed to landlords from 12 percent to 5 percent.