We know D.C. Get our free newsletter to stay in the know.
Pretty much no politician, regardless of their ideological persuasion, would be willing to say publicly that rents should go up so landlords can make bigger profits. But raising highly technical budgetary concerns to let a rent increase go forward? That’s a bit more palatable.
Perhaps it’s no surprise, then, that Mayor Muriel Bowser’s administration has chosen the latter tactic to kill Council legislation aimed at slowing price hikes for roughly 90,000 tenants in rent-controlled apartments. And barring some sort of last-minute change of heart, that strategy will likely pay off and will open the door to the highest rent increases these tenants have seen in the past four decades, all while Bowser proposes slashing resources for people who are struggling with housing costs.
Specifically, Bowser is aiming to hamstring a bill from her old mayoral rival (and newly installed chair of the Council’s housing committee), At-Large Councilmember Robert White. He was trying to pass some sort of stopgap bill to limit how much landlords of rent-controlled units can raise rents starting May 1. The city’s Rental Housing Commission has the authority to set maximum allowable rent hikes for these units (basically, most apartments in buildings built before 1976), and that group agreed back in February to an 8.9 percent increase for all apartments and a 5 percent cap at housing designated for seniors or people with disabilities.
White’s bill would still allow owners of these buildings to raise rent, but it would cap the increase at the rate of inflation. Current law lets landlords match inflation and then tack on another 2 percent if they’d like, so White’s legislation wouldn’t represent all that much of a change.
Still, the landlord lobby has been howling about efforts to shrink their potential rent hikes, with apartment owners arguing that they’re due for price increases after lawmakers froze rents during the height of the pandemic. (In one particularly memorable bit of marketing, one lobbying group inadvertently promoted Ward 5 Councilmember Zachary Parker, one of the leading voices against the rent hikes, to president of the United States by misidentifying him as “Zachary Taylor.”)
Nevertheless, White sought a vote on his bill at the Council’s meeting Tuesday, which was pretty much his last chance to get something passed before landlords are allowed to start raising rents. But he had to move the legislation on an emergency basis to meet that deadline, and the Council’s rules stipulate that such bills can’t have any impact on the budget.
So it was bad news for White when Bowser’s Department of Housing and Community Development, which oversees the Rental Housing Commission and other aspects of the city’s rent control regime, told him it couldn’t do what his bill asks without spending more money. Specifically, the agency said it needs to hire “an additional temporary specialist” to manage the proposed change in the rent hike cap, according to a fiscal impact statement prepared for the Council and forwarded to Loose Lips. Accordingly, White was forced to withdraw his bill from consideration Tuesday.
“This is a policy choice coming from above the agency,” White said at the Council’s breakfast meeting. “It is not an insurmountable fiscal impact.”
LL will forgive you for finding all of this a bit ridiculous. You might be wondering how it could cost D.C. money to stop landlords from charging more. And several councilmembers would agree. White and Parker, in particular, grilled Bowser’s new pick to head DHCD, Colleen Green, on the subject at a hearing on the agency’s budget Monday.
Green argued that this is a much more complex process than might meet the eyes. For one, thousands of notices of potential rent hikes under the current, 8.9 percent cap have already gone out to landlords, and if White’s bill passed, DHCD would have to issue new ones. Then, staff would have to review existing rent increase requests to determine if they meet the new, reduced cap (and communicate with landlords to submit new requests). All of this work would pull DHCD staff away from their other tasks on rent control issues, like the long-delayed development of a database tracking all the city’s rent-controlled apartments, which Green hopes to see finished before the fall.
“It’s a change in direction that, at this point, will have a fiscal impact,” Green said during the hearing. “I can’t quantify, exactly, right now how much it would be.”
Parker found that particularly galling. “How are we to ensure that that is an accurate assessment?” he wondered. Green said she didn’t want to get caught “venturing a guess and having it come back to me” if she was wrong. LL later heard from two sources around the Wilson Building that the total cost estimate from DHCD was around $30,000 for a single part-time employee (a DHCD spokesperson has yet to return a request for comment).
That’s such a paltry sum that White and Parker both wondered whether DHCD couldn’t absorb the costs via its existing budget, maybe by having a current employee manage these duties or filling a funded, yet vacant, position.
“It seems difficult for me to square that we couldn’t find that capacity in house, within the agency, which is pretty massive, in order to save thousands of people from potentially being displaced from the city,” Parker said.
Green insisted that the agency doesn’t have any wiggle room, and that there is “still going to be a cost,” even if DHCD could avoid hiring a new employee. But LL finds those assertions difficult to take at face value, considering that even Council budget director Jen Budoff, one of the more politically neutral observers in the Wilson Building, said Tuesday that this a process the agency could easily manage on its own.
“They are choosing not to,” Budoff said during Tuesday’s breakfast meeting.
There are arguments to be made in favor of allowing this rent increase, of course. Landlords have complained for years now that the city’s rent freeze has prevented them from spending money on badly needed building repairs, even though they’ve been squeezed by the same inflationary forces affecting the rest of the economy. And rent-controlled buildings aren’t subsidized in any way by the city to make them affordable, these landlords note. The law simply restricts how much property owners are allowed to charge.
There are holes in these claims that LL could point out, to be sure. The Rental Housing Commission allowed rent increases of up to 6.2 percent just last year, so it’s not as if landlords have not had a chance to recover lost profits since COVID-19 hit. Inflation is still pretty high, too, so White’s bill doesn’t bar them from raising any revenue at all—just not as much as they’d like. And is it really more important for the city to protect the profit margins of landlords than the livelihoods of thousands of its residents?
But Bowser isn’t engaging with these arguments for a good, old-fashioned debate about ideas and political priorities. She’s simply using budgetary tools to get her way, which happens to align with the preferences of a very politically influential sector of the city’s economy. As she employs a similar tactic to block the rollout of D.C.’s free Metrobus program, it’s an all-too-familiar outcome in the Wilson Building these days.