The D.C. Department of Consumer and Regulatory Affairs is responsible for inspecting buildings for housing code violations, but the agency says it often runs into problems identifying owners across multiple properties when those owners have created limited liability corporations or other entities that help disguise their stakes.
The matter came up Wednesday during the first in a series of public roundtables the D.C. Council is holding on DCRA enforcement in rental properties, given tenants’ frustrations over living conditions ranging from defunct appliances, leaks, vermin, lack of security, and unresponsive management.
After rounds of testimony by residents and landlords largely vexed by DCRA’s inspection practices, Melinda Bolling,the department’s director, told the council that Mayor Muriel Bowser‘s administration filed new legislation Monday that would increase the executive branch’s power to gather information on landlords who demonstrate patterns of negligence. The quietly introduced “Landlord Transparency Amendment Act” would set up new “mayoral subpoena power to compel the production of ownership records when a housing rental business allows any of its units to fall into significant disrepair,” the bill explains. The legislation would apply to operators of single units found to have more than 10 violations and single buildings found to have over 35.
Specifically, that means the mayor could force landlords to hand over ownership records on any “individuals or entities with at least 5 percent ownership interest in the building or management company” as well as “all properties in the District owned or operated by” these owners, Bowser wrote in a letter introducing the bill to the council. It also contains a provision on courts compelling landlords to comply or confront legal contempt.
The council still must schedule a hearing on the proposal, which will not take place until the fall because the legislature is about to go on summer recess. The issue of DCRA being unable to track the same landlords for buildings governed by various corporate entities came up this year in a significant way when the agency began inspecting more than 65 buildings owned by Sanford Capital, filled mostly with low-income residents. In March, Bowser ordered inspections of the company’s properties, resulting in almost 1,100 code citations.
Under questioning by Council Chairman Phil Mendelson, Bolling said DCRA “can’t identify owners” across all of their buildings because some landlords do not respond to information requests. “We need to compel,” she said, adding that “nine times out of 10,” only one person or entity registers with DCRA as the owner of a rental property without disclosing other partner-owners. “We’re seeing quite often, you’re not even disclosing yourself,” Bolling said. “You are another LLC.” Mendelson seemed somewhat skeptical toward the proposal, mentioning that housing code violations run the gamut from peeling paint to ceilings collapsing, and that “it’s probably not hard to find buildings with 35 violations” because tenants will go to DCRA with their grievances.
Although DCRA admitted that it had not drafted the legislation in close cooperation with the District Attorney General, Bolling said officials receiving common ownership information would help build lawsuits, if necessary.
Holding negligent landlords accountable has long plagued D.C. officials, going back at least to 2008 when then-Attorney General Peter Nickles brought litigation against more than a dozen. More recently, following media accounts about Sanford Capital, which Attorney General Karl Racine is suing over conditions at two derelict properties in Southeast, councilmembers like at-large member Elissa Silverman called for targeted inspections of rental properties known to house people on rental assistance or other city programs. Others like Ward 1 Councilmember Brianne Nadeau said the District needed to reconsider DCRA’s fines structure.
At Wednesday’s roundtable, Silverman suggested that DCRA “deprive multiple violators” of basic business licenses, the paperwork operators of commercial properties must regularly renew to legally rent apartments. Bolling said that could be a possibility, but “the flip side” would be major landlords housing residents in their buildings when they are not supposed to. “That kind of puts you in a quandary,” Bolling said. “That kind of gives you carte blanche to throw people out of a building”—a concern the administration has raised before.
Last summer, Bowser commissioned a week-long review of DCRA, which focused on the department’s permitting practices and oversight of illegal construction, among other areas. As for housing code citations, Bolling said the agency is working on a “risk-based algorithm” to more efficiently identify so-called bad actors, and it has also shortened the window for certain landlords to address any problems its inspectors have uncovered. Still, during yesterday’s session, DCRA wasn’t able to provide the council a citywide “cure rate” for violations.
However the legislation and related issues about landlords complying with D.C.’s housing code advance, it’s clear the council is pondering eventual reforms to the agency. It remains to be seen whether those look more like a scalpel or a hammer. “When you’re a regulatory agency, no one’s going to be happy with you,” Bolling said Wednesday, citing pressures from landlords and tenants. For his part, Mendelson said he disagreed.