Through agreements with various developers, the DC government has attempted to integrate low and moderate income families into market rate condominium projects, most of which are in Northwest DC. While the idea was noble, it has been ill-designed.
The City placed 20 year resale restrictions on the Affordable Dwelling Units (ADU), assuming that if low and moderate income people (between 30% and 80% of the Area Median Income) purchased an ADU, these affordable owners would be able to resell to another family earning the same income as the original owner earned at the time of purchase. The City also assumed that the original owners would be able to earn a fixed percentage at the end such a sale. Unfortunately, the City did not factor in escalating condo fees or the costs associated with reselling the ADU. So now, when ADU owners need to resell their units for whatever reason, many of them cannot. With the increased condo fees, many of the units would not qualify as affordable for people in the same income categories, and even if they found someone else, the seller would have to come up with 10% of the sale price for closing costs fees in order to resell it at whatever price they originally purchased it for.
Compounding the issue even further for those owners who cannot sell their units, renting out their homes has not been an option either as the City-imposed rental restrictions forced these owners to rent their units at prices that are lower than the monthly costs associated with owning units. Below is a list of market-rate condo buildings with ADU owners facing rising condo fees compounded by resale and rental restrictions, with many owners paying condo fees almost equal to or more than their mortgage payments.
- Barcelona – 1435 Chapin St NW
- Chase Point – 4301 Military Rd NW
- City Vista K – 475 K St NW
- City Vista L – 440 L St NW
- Fedora – 1451 Belmont St NW
- Kenyon Square – 1390 Kenyon St NW
- The Heights of Columbia – 2750 14th St NW
- Union Row – 2125 14th St NW
- Verona Parc – 1348 Euclid St NW
In any scenario, the end result is the complete opposite of what the City originally set out to do, and many of these families, without intervention, will be returned back into the ranks of folks needing affordable housing, but with damaged credit and no prospect of purchasing again. This situation simply does not make sense as these families have to take the same level of risks and responsibilities of being homeowners, while reaping none of the benefits, even after the City is repaid its subsidies (which actually went to the developer in the first place).
In October 2011, Manna organized affordable owners across these buildings, collected physical and online petitions, and met with City Council officials. Throughout 2012, these owners organized within their buildings, sought support from their condo associations, met with City officials, testified publicly and worked through Manna and with the City Council to address their issues. Direct meetings between affordable owners and the Department of Housing and Community Development began in February 2013.
In the summer of 2013, the Department of Housing and Community Development (DHCD) put forward a process to evaluate the affordability of each ADU and possibly allow owners to rent or sell to people in higher income categories. Information on this process and the form are on DHCD’s website at http://dhcd.dc.gov/node/619912. More changes need to be made for current and future owners, but this is a significant step in the process.