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Seniors and people with disabilities who live in rent-controlled D.C. apartments won’t have to pay sudden spikes in rent anymore. The city council has given final approval to legislation detailing the new rules, and the mayor is expected to sign it.
At-Large Councilmember Anita Bonds, who chairs the committee on housing and community development and seeks to reform the District’s rent-control laws, proposed the bill with Ward 1 Councilmember Brianne Nadeau in April 2015. Local lawmakers unanimously passed the legislation on second vote last Tuesday. It exempts elderly and disabled tenants in the District’s roughly 80,000 rent-controlled buildings from rent increases based on “petitions” landlords can file with the city to compensate for repair work, capital improvements, or low profit margins. D.C. law allows owners of rent-controlled buildings to raise rents if they do not meet a 12 percent rate of return on their investments. Known as a “hardship petition,” this loophole has led to rent increases averaging $350 a month over the last nine years, Bonds’ office explains.
Many of the affected residents are on fixed incomes. They have no option to earn more money or find another place to live when rent goes up. The legislation would raise the income limit for a capital-improvement exemption from $40,000 a year to 60 percent of the area median income: currently $50,000 a year for a family of four. The bill also lowers an existing cap on annual rent increases to the the Consumer Price Index (a measure of inflation currently at zero), the Social Security Cost-of-Living Adjustment, or five percent of rent—whichever is least.
To make the numbers work for landlords, the legislation includes a $1-for-$1 tax credit for each unit occupied by an exempt tenant. For example, if an elderly tenant’s rent were proposed to increase by $200 pursuant to a petition a landlord filed with D.C.’s Rent Administrator, the District would offer that landlord a $200 tax credit to offset the loss. It’s a concession to property owners, although the sum of these credits cannot exceed $1.25 million in any given year.
The legislation is subject to appropriations, according to a fiscal impact statement by D.C.’s Chief Financial Officer, meaning funds need to be identified for it to be implemented. That could happen during the District’s annual budget process. The CFO estimates that the proposal will cost $960,000 in fiscal year 2017 and $4.8 million through fiscal year 2020, assuming landlords will be able to get petition tax credits starting in January.
“Petition requests could impact nearly 1,000 housing units each year, and we expect about 45 percent of these units to be occupied by low-income tenants who are elderly or have a disability,” the statement explains. “We estimate the average rent increase will be approximately $300 per month per unit. … The cost would increase from year to year because a landlord is entitled to the tax credit for as long as the tenant remains in their unit.”
Per the 2010 U.S. Census, almost 15 percent of D.C. residents 65 and older live below the poverty level. The housing committee found that 7 percent of District residents had physical disabilities, and 4 percent had mental disabilities.
“It is now time to add the safeguards of this bill to protect low-income seniors and tenants with disabilities from high rents and possible displacement,” Bonds says in a statement. Mayor Muriel Bowser‘s administration spoke in support of the proposal at a hearing the council held in June 2015. It will be on her desk by the end of the year.
This post has been updated to note that the bill is subject to appropriations.