Credit: Darrow Montgomery

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On behalf of a group of public housing residents in Northeast D.C., the Legal Aid Society has filed a settlement agreement in D.C. Superior Court with East Capitol Family Rental L.P., A&R Management, and Kettler Management. It offers an exit to a nearly three-year-old class-action complaint against the companies, which have each managed or partly owned a mixed-income DC Housing Authority property with 61 units of public housing called Capitol Gateway.

The suit, filed in 2015, alleges that the companies oversaw or sanctioned the miscalculation of utility subsidies owed to low-income tenants living in Capitol Gateway. 

Federal public housing laws dictate that tenants living in federally-subsidized public housing cannot pay more than 30 percent on their income on rent, a figure that includes the cost of utilities. In buildings where utility payments aren’t included in the rent and tenants must pay separately for those services, the property owner or manager must disperse utility allowances to tenants that cover a “reasonable” level of energy and water consumption.

But Legal Aid’s suit alleges that, as early as 2013, property managers of Capitol Gateway have periodically reduced tenants’ utility allowances “without providing proper, advance notice or an opportunity to comment,” provisions required by federal public housing laws. In its initial complaint, Legal Aid claimed that the companies “failed to increase the utility allowances following utility rate changes of 10 percent or more, as required by federal law,” and have reduced the subsidies for electricity usage to such an extent that “they do not approximate the reasonable consumption costs of even an energy-conservative household.”

The settlement, which would affect about 80 current and former tenants, puts ECFR, A&R, and Kettler on the hook for $100,000––immediate monetary relief for tenants who were overcharged on utilities, plus attorney’s fees, and over the next two years, modified utility reimbursements for dozens of families living in Capitol Gateway.

A spokesperson for DC Housing Authority confirmed that Kettler still manages the building, but declined to comment on whether the agency has had conversations with Kettler executives about the complaint.

Capitol Gateway was developed as part of the HOPE VI project, a federal initiative to rehabilitate public housing units around the U.S. DCHA has received over $180 million in HOPE VI grants for sites around the District. Wal-Mart announced in 2016 it would renege on plans to build a location in that neighborhood.