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A legal ambiguity that allows landlords to tear down affordable housing and displace low-income tenants without due process may be about to get a legislative fix.
In July, the predicament of the tenants at Mount Vernon Triangle’s Museum Square Apartments brought to city officials’ attention a gap in the protections usually afforded by the Tenant Opportunity to Purchase Act. TOPA, as it’s known, gives tenants the right to purchase their building if the owner puts it up for sale. Typically, the sale price is governed by the market, since the tenants (or a developer they’ve designated as their agent) have the right to match offers made by third parties. But when a building is being demolished rather than sold, the owner can just name the price, and the law states only that it must be a “bona fide” offer of sale. In the case of Museum Square—-where all the tenants receive Section 8 subsidies and most are Chinese, comprising about half of the Chinatown area’s dwindling Chinese population—-the property owner, the Bush Companies of Williamsburg, Va., told the tenants they’d have to come up with $250 million, or more than $800,000 per apartment, or they’d be forced to leave.
At-Large D.C. Councilmember David Catania quickly drafted legislation to prevent exorbitant TOPA sale offers in situations like these, but he circulated it too late to be introduced before the Council left for its summer recess. Now, with the Council convening today for a legislative meeting, he’s introducing a revised version of the measure.
Catania’s earlier proposal would have capped a building owner’s sale offer at the assessed value of the property in the case of demolition. That would have prevented property owners from gaming the system by asking for an unrealistically high sum, but it may have gone too far. In the case of Museum Square, it’d be hard to make the case that $250 million was a fair price. But the property’s assessed value this year was just $36 million—-almost certainly lower than the property, on a booming stretch of K Street NW just east of downtown, would have fetched on the market.
The new legislation takes a slightly different tack. Instead of using the city-assessed value of a property, it requires an outside appraisal. The seller and the tenants each select an appraiser, and the value of the property is set at the average of the two appraisals or at the value determined by a third appraiser jointly selected by the two parties.
Separately, Mayor Vince Gray transmitted a bill to the Council on Sept. 16 that addresses the same issue and is set to be referred to a committee today. Gray’s bill likewise sets the TOPA price for a property to be demolished at a value determined by an independent appraiser, although it doesn’t specify how the appraiser is to be chosen. Catania’s legislation consists of two bills: an emergency measure that would take effect immediately upon Gray’s signature (or a Council override of his veto) for up to 90 days, and a temporary bill that would expire 225 days after implementation. Gray’s legislation is permanent (meaning that unlike an emergency bill, it’s subject to 30-day congressional review).
As for Museum Square tenants, neither proposal would actually affect them, at least not right away. After public outcry and pressure from the city, the Bush Companies reversed their stated intention to opt out of their Section 8 contract for Museum Square, informing the U.S. Department of Housing and Urban Development last month that they would continue to provide housing to the tenants with Section 8 subsidies. Because a year’s notice is required to end a Section 8 contract, Museum Square residents will get to stay put at least through next summer. At that point, they and others in their situation could stand to benefit if legislation along the lines of Catania’s or Gray’s becomes law.
Photo by Darrow Montgomery