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If a tight market is pushing your rent through the rafters, don’t blame rent control. It hasn’t done anything in a long time.
Tammy Green lives in a rent-controlled apartment on Good Hope Road SE. It’s a two-bedroom apartment in the 647-unit Marbury Plaza complex. Green shares it with her 12-year-old daughter, Kamelia, and her 20-month-old baby, Abena.
The 31-year-old consultant and advisory neighborhood commissioner is, in many ways, just the type of person D.C.’s rent-control activists say they’re fighting to protect. She makes do without a car and keeps close watch on her monthly expenses in order to pay Kamelia’s private-school tuition. And in a city where rents are skyrocketing, the family pays just $630 a month.
An example of the D.C. rent-control program’s generous bounty? Hardly. After absorbing five rent increases over the last four years, Green called the city’s rent-control office in the Department of Consumer and Regulatory Affairs to find out just what the law was doing to protect her monthly bottom line. Had rent control expired without Green’s knowing it?
Actually, no. The rent increases were quite legal. And as it turned out, her monthly payments were well under the top rate allowed under the law. “They told me, ‘Your landlord can legally raise the rent to $3,600,’” Green says. “That’s totally ridiculous.”
Indeed it is. But the law protecting Green from paying $3,600 a month isn’t the city’s rent-control law. It’s the law of the marketplace. Like 83 percent of District renters, she pays something less than the variable, government-mandated rent ceilingmeaning that she pays what the market will bear. Thus, although Green joined in with housing activists protesting in front of last week’s D.C. Council hearings on the Rental Housing Act Extension Amendment of 2000, she’s not really one of its beneficiaries. Her predicament is a pretty good illustration of how D.C.’s rent-control law, last changed in 1985, has been turned on its head since the stagflation days of 1975, when the provision was first adopted.
In the last decade in particular, rent ceilings have escalated faster than the actual market rate for apartments. Nearly half of the city’s rent-controlled apartments now rent for under 75 percent of their ceiling rate, according to a new study commissioned by the D.C. financial control board.
To the city’s landlords, the report points to an obvious conclusion: Scrap rent control. “Ask yourself who rent control is helping,” says Shaun Pharr, vice president of the Apartment and Office Building Association of Metropolitan Washington.
Housing activists, on the other hand, draw an entirely different conclusion: The remedy, they say, is more rent control, not less. “People who have been in their apartments for a long time are covered,” says Kenneth Rothschild, of the D.C. Coalition for Rent Control. “But anybody who’s moving or just coming into the city is screwed. For them, there is no rent control.”
And after a week when even a simple council hearing on the program led mainly to spirited defenses of the status quo, it’s pretty clear that neither the owners nor the activistsnor Green, who’s nervous about getting hit with another rent hikewill get their way. Lowering the ceiling rates would constitute dealing a major blow to developerssomething the current D.C. Council looks unlikely to do. But repealing the law altogether, given the politicized atmosphere, would amount to taking on a potential voting bloc of renter households that amounts to 61.5 percent of all D.C. households.
So city officials hold the occasional hearing and otherwise duck attention. Well before last week’s hearings, the council duly extended the city’s 25-year-old system of rent ceilings for another five years.
The crowd gathering in the D.C. Council chambers on Oct. 11 skews decidedly small, over 50, and female. All manner of furry-fuzzy headwear is in evidence for the rent-control hearings before the Consumer and Regulatory Affairs Committee. The gray-haired set is ready to face off with the trim white-guys-in-suits from the Apartment and Office Building Association, the National Multi-Housing Council, and the D.C. Association of Realtors.
Today’s subject is the control board study, performed by Arlington-based Nathan Associates Inc. The $302,300 reportwhich recommends a “blanket lifting” of the rent-control “regime”comes thanks to a 1997 congressionally mandated reform initiative that also recommended repeal of rent control.
The logic of the report is easy enough to follow. Because only 17,509 rent-controlled units in the Districtroughly 17 percentare at their ceilings, the report says, eliminating those ceilings would have “modest, if not de minimis effects” overall. Altogether, about 101,500 out of 160,900 rental housing units in the city are subject to rent control; the law exempts public housing, apartments built after 1975, and properties owned by landlords who have fewer than five rental units in the District.
And as if exempting the many working-class locals who rent row houses from small-time landlords weren’t enough, it turns out that most rent-control beneficiaries don’t even come from the city’s struggling masses. According to the Nathan report, about half of the rent-controlled units that do rent at their ceiling rates are in Northwest; the majority of them are occupied by renters who make more than $25,000 a year per household . More than 5,000 rent-controlled apartments are occupied by renters who earn $50,000 a year or more per household.
Landlords say ending rent control wouldn’t really hurt anybody. The Nathan report projects that, on average, rent de-control would put folks who are at their rent ceilings “at risk” of monthly rent increases averaging $36.42, or a 10.4 percent average rise in their housing costs. By comparison, the cumulative effect on the rest of D.C.’s renting universe would be more modest: The report predicts, on average, post-repeal rent hikes of $6.30 a month, or a 1.8 percent increase.
The less-than-catastrophic predictions flow from two observations: (1) the 14 percent D.C. population decline thatrecent real estate frenzy notwithstandingproduced a double-digit rental vacancy rate in the ’90s, and (2) rent control’s rule allowing rent to rise when a vacancy occurs. It turns out that while nobody was watching, the law’s internal mechanisms rendered it useless to all but a few little old ladies who’ve been on 16th Streetor Connecticut Avenue, or Wisconsin Avenuesince President Gerald Ford’s “Whip Inflation Now” campaign.
Earlier this year, the control board used the study to press the D.C. Council to separate its new rent-control extension from the budget. The council balked. Nevertheless, the council, out of uneasy deference to the control board, is listeningand holding hearings.
But hearings are about all the deference the control board can expect. Committee Chair Sharon Ambrose blasts the Nathan report. Nevertheless, dozens of elderly apartment dwellersalmost all of them up to their rent ceilings in upper Northwestwait their turn to give their testimonials against landlord abuses and gentrification.
“D.C. is already a city of the very rich and the very poor,” says Stella Lugowski, speaking for tenants at the Carillon House on Wisconsin Avenue NW. “Don’t make it worse.” Another big contingent is from the historic Rittenhouse apartments on upper 16th Street NW, also a hotbed of pro-rent-control sentiment.
During the dinner break, a small band of protesters walk in a tight circle in front of One Judiciary Square. Some wear cardboard boxes to signify the plight of the homeless. “Strength in rent control!” they chant.
Jim McGrath, chair of the D.C. Tenants’ Advocacy Coalition, runs a telephone hot line that’s increasingly become a sounding board for renters’ complaints about housing shortages, slumlords, and rent gouging. His monthly call log basically serves as a 250-line rebuttal of the Nathan report.
If rent control really has been rendered moot, McGrath asks, then why the push to repeal it? Of course, he believes he has the answer: Given the tight rental market, it’s clearly in the interest of landlords to lift the few remaining rent ceilings that actually mean somethingparticularly the ones in the tony neighborhoods that were so well-represented in last week’s council hearings. With the prospect of doubling or tripling rents, McGrath says, each departure can be the landlord’s equivalent of “breaking the bank at Monte Carlo.”
McGrath himself stands in the way of just such a jackpot. Retired from the Library of Congress, he has lived in the same Massachusetts Avenue apartment since 1971.
Of course, McGrath’s modest rent ceiling is safe for the foreseeable future. When the sun sets on the current rent control law, on Dec. 31, the new five-year extension will kick in. Mayor Anthony A. Williams supports rent control. So the only thing that could derail it is Congress, which is expected to approve the city’s budget bill this week.
The oil paintings in Karen Williamson’s apartment cover the walls from floor to ceiling. Many are signed with her name. One of the canvases depicts the former skyline from her sixth-floor window, which now overlooks a new luxury high-rise going up a block away, at 16th and R Streets NW. The new building is not in the painting. But it’s a brick and mortar reminder that the local rental market is soaring far above her city-imposed rent ceiling.
Williamson, though, doesn’t have to worry about that. At 58, she lives alone with her cat, Esmerelda, and pays a monthly rent of $572 plus utilities. For her, that’s still a hefty burden, given the modest salary she makes running a pair of nonprofit alcohol- and drug-treatment programs.
The rent buys Williamson one of those flats that people dream about when they settle in Washington. It’s a one-bedroom on the sixth floor with hardwood floors, a kitchen nook, and French doors that open into her bedroom. The original rent-control law was designed to capture mainly the larger buildings like this one: the Barclay, with its four Greek columns that frame the front entrance at the head of a landscaped circular driveway.
But even the Barclay doesn’t serve as a very good example of rent control’s leavening effects. Williamson knows that her rent’s only about half that of many of her younger neighbors who are in college, just starting out in life, andin more than a few casesdoubling and tripling up for economy’s sake.
Williamson says that her landlord is fond of telling her, “‘When I look at you, I don’t see market rate.’” In effect, almost everyone in the Barclay except Williamson pays market rent in the officially rent-controlled building. “People are desperate to get in,” Williamson says.
The difference between Williamson and most of her neighbors is nothing more complicated than the fact that she’s stayed put since September 1981not long after some of her neighbors were born. Her monthly rent then was $274. Williamson’s apartment hasn’t turned over in nearly two decades, so her landlord has had to content himself with annual increases tied by law to the oh-so-low consumer price index.
But each apartment turnover makes way for a maximum rent increase of 12 percentor up to the level of the highest “comparable” unit in the building. And rents for newly vacated apartments, naturally, tend to leap-frog to the top rate. If Williamson moved out of the Barclay tomorrow, the rent on her apartment could riseat least on paperto the level of a comparable one-bedroom in her building that’s turned over and increased in price many times. The same would likely be true for any other apartment she tried to move into in the District. In effect, she’s trapped.
Ambrose says the D.C. Council is unlikely to do anything about situations like Williamson’s. And Ambrose adds a caution of her own: Tenant activists should be careful about trying to strengthen the program: “I tell these groups screaming to tighten the law, ‘You reopen this piece of legislation at your peril, because there are as many people who want to change it in the other direction.’”
And if that were to come to pass, it would be time for Williamson and Esmerelda to movelikely out of the District. “I couldn’t afford to move around here,” she says. “I’m not going to be able to pay $900 a month for rent.”
Which is a good reason for her to stay and fight. “Most of the people around here are just passing through. But I’m not passing through….My landlord would probably like to get rid of me, but he can’t.” CP