The D.C. Council voted unanimously this afternoon to move forward a bill that would aim to strengthen rent control laws in the city, reducing the amount by which a landlord can increase a unit’s rent after its occupant moves out.
This figure, called a “vacancy increase,” currently sits at 30 percent, allowing a property owner to increase rent up to that threshold if they can point to a comparably priced unit in the building. Its intent is to help property owners make rent increases that are commensurate with inflation.
Under the law passed this afternoon, that figure would move down from 30 percent to 10 percent in most cases.
Supporters of the bill, which include organizations like the Legal Aid Society, say that landlords who take these significant vacancy increases when pricing a new unit can, over time, drive up prices in entire buildings. That in turn chips away at rent control protections, moving a significant number of the 80,000-plus rent-controlled units in D.C. closer to market value.
At-Large Councilmember Anita Bonds on Tuesday argued that 30 percent vacancy increases “render rent control moot. Most rent-controlled apartments can be raised to market rates with a 30 percent increase.” Legal Aid’s Beth Harrison tells City Paper that “rent-controlled units are such a large piece of the city’s housing inventory that if rents are going up so much across the city, they must be going up in the rent-controlled units, too.”
When Bonds first introduced the bill in June 2017, it would have reduced the vacancy increase to five percent. But sustained lobbying against that bill, in large part by the Apartment and Office Building Association of Metropolitan Washington (AOBA), prompted Bonds to compromise. A version of the bill the Council was set to vote on would have lowered the vacancy increase in all cases to 10 percent, but an amendment Bonds introduced on Tuesday introduced a caveat: Landlords may increase the rent by 20 percent on units whose previous tenant occupied it for 10 years or more. (Bonds cited a statistic from the Office of the Chief Financial Officer showing that about 88 percent of rent-controlled units have an average turnover of fewer than 10 years.)
Representatives from AOBA, who have met with Bonds and Council Chairman Phil Mendelson to discuss their concerns with the bill, argue that lowering the allowable vacancy increase would reduce owners’ ability to clean and repair units in between tenants. They also argue that higher vacancy increases, which allow property managers to collect more in rent, help to subsidize the cost of other rent-controlled, below-market-rate units in a building. (“When you’ve got some folks saying 0 percent increase and other folks saying 30 percent, it’s going to be impossible to find true consensus,” Mendelson told City Paper before the Council vote.)
“The concept behind the vacancy increase was to allow the housing provider to capture greatly needed income when a unit became vacant. The extra rent on this one unit would provide a little more needed cash to keep up with the overall building’s expenses and in so doing, preserve a key part of the District’s existing rental housing stock—a benefit to the District’s rental residents,” Kirsten Williams, an AOBA lobbyist who focuses on D.C. policy, wrote to City Paper in an emailed statement.
The premise that underpins this argument is that, as inflation makes maintenance costs more expensive, keeping rent-controlled units in a building eats into the owner’s profits. But advocates of reducing the vacancy increase disagree sharply with AOBA on this point. “If that’s true, show us,” Legal Aid’s Harrison says. “Produce data that shows us you’re not making a profit. It’s a problem which we don’t believe is true anymore in D.C.”
A report issued by the Council’s housing committee appears to agree, concluding that “it is clear that both the 30 percent allowable vacancy increase and the fact that comparable and non comparable units are differentiated in District housing law were not based on policy, but rather were based on politics. The Committee must question a policy that is arbitrary in its application and without any ‘dollars and cents’ justification.”