Rental Control Reform Amendment Act of 2006, Bill 16-457

Mayor Williams’s rent control legislation package, as of February 15, 2006
Mayor Williams letter to Councilmember Graham	Bill 16-
Summary of bill	Deputy Mayor Stanley Jackson letter to Councilmember Graham
Councilmember Graham letter to rent control group	Memorandum from the Office of the Attorney General on proposal

Additional materials
Councilmember Graham press release
Mayor Williams press release	Mayor's office side-by-side comparison

ANTHONY A. WILLIAMS
MAYOR

February 6, 2006

The Honorable Jim Graham
Chairman, Committee on Consumer and Regulatory Affairs
Council of the District of Columbia
1350 Pennsylvania Avenue, NW, Suite 105 Washington, DC 20004

RE: Rental Control Reform Amendment Act of 2006

Dear Councilmember Graham:

I am pleased that the Committee on Consumer and Regulatory Affairs remains willing to consider my rent control proposal for its committee print, per your January 18, 2006 memorandum (attached). As promised, please find the legislative component of my proposal attached for your review along with an executive summary. The proposal includes suggestions offered by members of the Committee's rent control working group. You will he pleased to know that the tenant advocates were enthusiastically supportive of the revised proposal, particularly with respect to the gradual abolition of the District's rent ceiling system.

Both the Executive and the Committee have benefited from meeting with concerned groups. As your memorandum indicates, the Committee agrees to continued dialogue on the abolition of the District's rent ceiling system. Therefore, I am also writing to request that the Committee postpone its February 8, 2006 markup of Bill 16-457, the "Rental Control Reform Amendment Act of 2406" by one week. This additional week will 1) allow us to discuss my proposal in detail; 2) afford the Committee the opportunity to speak with tenants and landlords about the legislation; and 3) allow the Committee to advance a comprehensive solution to the District's rent control program for full Council review.

Thank you for affording me the opportunity to assist the Committee with its efforts to remedy current concerns with the District's rent control system. My staff is available to meet with you for further discussion.

Sincerely,
Anthony A. Williams

Enclosures

Councilmember Graham

A BILL IN THE COUNCIL OF THE DISTRICT OF COLUMBIA

Councilmember Graham introduced the following Bill, which was referred to the Committee on _____.

To amend the Rental Housing Act of 1985 to amend the definition of base rent, to provide for the elimination of rent ceilings, to preserve previously perfected rent ceiling adjustment and limit their implementation, to limit the amount of any rent charge adjustment, other than a petition-based adjustment, that may be implemented on an occupied unit to 8% of the current rent charged or to 4% if occupied by a qualified elderly tenant or qualified disabled tenant plus in each case the adjustment of general applicability, to amend the vacancy adjustment provisions to allow the housing provider to raise the rent charged of a vacant rental unit by 10% or to the highest comparable within that building, subject to a limit of 50% of the current lawful amount of rent charged and subject to specified exceptions, to terminate the Unitary Rent Ceiling Adjustment Act, and to limit to one per year the number of increases in rent charged, and for other purposes.

BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, that this act may cited as the "Rental Control Reform Amendment Act of 2006".

Sec. 2. The Rental Housing Act of 1985, effective July 17, 1985 (D.C. Law 6-10; D.C. Official Code §42-3501-01, et seq.), is amended as follows:

(a) Section 103(4) (D.C. Official Code §42-3501.03(4)) is amended to read as follows:

"(4) ‘Base rent’ means that rent legally charged or chargeable on April 30, 2006, for the rental unit which shall be the sum of rent charged on September 1, 2004, and all legal rent increases authorized for that rental unit by this Act (the Rental Housing Act of 1985) on or before April 30, 2006, by prior rent control laws or any administrative decision issued under those laws, and any rent increases authorized by a court of competent jurisdiction.".

(b) Section 202(a)(3) (D.C. Official Code §42-3502.02(a)(3)) is amended by striking "rent ceiling" and inserting "rent charged" in its place.

1. By striking the date "July 17, 1985" wherever it appears and replacing it with "the effective date of the Rental Control Reform Amendment Act of 2006" in its place;

2. by striking "and" at the end of number (5);

3. by replacing the period at the end of number (6) with "; and"; and

4. by adding the following number (7) to read as follows:

"(7) Any granted or perfected rent ceiling adjustments which remain in effect under the provisions of this chapter and are preserved."

(d) Section 205(g) (D.C. Official Code §42-3502.05(g)) is repealed.

(e) Section 206 (D.C. Official Code §42-3502.06) is amended as follows:

(1) The title of §42-3502.06 is renamed "Rent charged";

(2) Subsection 206 (a) is amended by striking "April 30, 1985" and inserting "April 30, 2006" in its place;

(3) Subsections 206 (b) and (c) are amended by striking "rent ceiling" wherever it appears and inserting "rent charged" in its place and by adding the following sentence at the end of Section 206(b):

"Any increase in rent charged pursuant to Section 206 (h) of this chapter shall be in addition to any increase in rent charged pursuant to this Section 206 (b)."

(4) Subsection 206 (d) is amended by striking the first sentence and inserting "If on the effective date of the Rental Control Reform Amendment Act of 2006 the rent being charged exceeds the allowable rent charged, that rent shall be reduced to the allowable rent charged effective the next date that the rent is due." in its place, and by adding the following sentence at the end of subsection 206 (d):

"Rent ceiling increases granted or perfected prior to the effective date of the Rental Control Reform Amendment Act of 2006 shall remain in effect and are hereby preserved, but may be implemented as increases in the rent charged as provided in and subject to the limitations in Section 206(h)(3) and Section 213 (d)(2).";

(5) Subsection 206 (e) is amended to read as follows:

"(e) A tenant may challenge a rent adjustment implemented under any section of this chapter by filing a petition with the Rent Administrator under § 42-3502.16. No petition may be filed with respect to any adjustment in the rent charged, under any section of this chapter, beyond the applicable time limit stated in Section 206 (h) of this chapter and no petition may be filed with respect to any adjustment in the rent ceiling, under any section of this chapter, more than 3 years after the effective date of the adjustment in the rent ceiling, except that a tenant must challenge the new base rent as provided in §42-3501.03(4) within 1 year from the date the housing provider files his base rent as required by this chapter.";

(6) Subsection 206 (f)(2)(A) is amended by striking "$40,000" and inserting "$55,600" in its place;

(7) Subsection 206 (f)(2)(B) is amended by striking "$40,000" and inserting "$55,600" in its place;

(8) A new subsection 206 (h) is added to read as follows:

"(h)(1) The rent charged and the increases therein shall be controlled as provided in this subsection.

(2) No adjustment in rent charged for a rental unit in such housing accommodation shall exceed (i) for an elderly tenant or a disabled tenant, as defined in and determined by the Rent Administrator pursuant to the procedures applicable under Section 206(f) (D.C. Code §42-3502.06(f)), 4% of the prior rent charged of the rental unit, or (ii) for all other tenants, 8% of the prior rent charged of the rental unit, in each case (i) and (ii) plus the adjustment of general applicability under Section 206 (b) of this chapter, and any unimplemented portion of such percentages during the applicable year cannot be preserved and carried over to a subsequent year. No adjustment in rent charged may be implemented until a full 12 months have elapsed since a prior adjustment in rent charged. Any adjustment in rent charged under this subsection 206 (h), under Section 208(h), under Section 213, or any other provision of this chapter, need not be based upon and shall not require any corresponding rent ceiling adjustment.

(3) The foregoing limitations in subsection (h)(2) and the limitations in Section 208 (h) and of Section 213 of this chapter shall not apply to an adjustment in the rent charged that implements a decision of the Rent Administrator pursuant to a petition under §42-3502.10, §42-3502.11, §42-3502.12, or §42-3502.14, or a voluntary agreement under § 42-3502.15, including any such decision or voluntary agreement granted on or after the effective date of the Rental Control Reform Amendment Act of 2006, and including any such decision or voluntary agreement as to which the rent ceiling adjustment was granted prior to the effective date of the Rental Control Reform Amendment Act of 2006 to the extent such rent ceiling adjustment was not implemented prior to the adjustment in rent charged pursuant to this subsection 206 (h) (3). Such rent ceiling adjustments remain in effect and are hereby preserved for implementation pursuant to this chapter. In proceedings under any of §§42-3502.10, 42-3502.11, 42-3502.12, 42-3502.14 or a voluntary agreement under §42-3502.15, the Rent Administrator shall determine the adjustment to the rent charged, and not the rent ceiling, according to the provisions of those sections. The percentages 20% in Section 210(c)(1), and 15% in Section 210(c)(2) and 125% in Section 214(a) shall be calculated as percentages of the rent charged. Unimplemented portions of increases in the rent charged under all petitions approved by the Rent Administrator described in this subsection may be preserved and carried over to subsequent years.

(4) The foregoing limitations in subsection (h)(2) shall not apply in the event a rental unit in such housing accommodation is vacated by the tenant, in which event any increase in the rent charged for the rental unit during the initial leasing period following the vacancy shall be determined as provided in Section 213 of this chapter.

(5) A housing provider shall be required to file, with the Rent Administrator, a copy of each rent charge increase served on a tenant and the implementation of any preserved rent ceiling increase under section 213(d). Failure to file shall not be construed to invalidate such increases. The housing provider shall maintain copies of all notices of adjustments in the rent charged during the period of the applicable limitations period under Section 206(e) or Section 206(h) and shall produce such records to the Rent Administrator upon request.

(6)(a) A tenant in occupancy may challenge any increase in the rent charged for his or her rental unit, provided that no petition may be filed with respect to any such adjustment in the rent charged, under any section of this chapter, (i) more than 3 years after the effective date of the adjustment, as to any adjustment prior to the effective date of the Rental Control Reform Amendment Act of 2006, or (ii) more than 1 year after the effective date of the adjustment, as to any adjustment on or after the effective date of the Rental Control Reform Amendment Act of 2006.

(b) When the rental unit becomes vacant after the initial leasing under subsection (h)(4) no petition shall be filed as to the initial rent charged to a tenant leasing the vacant unit on any ground other than that a rental unit used as a substantially identical rental unit was not substantially identical to the vacant unit, and in any event such petition shall not be filed more than 1year after the date the lease is signed. For increases thereafter, subsection (h)(6) (a) shall apply."

(f) D.C. Official Code §42-3502.07 is repealed.

(g) Section 208 (a) (2) (D.C. Official Code §42-3502.08 (a)(2)) is amended by striking "September 1, 1983" and inserting "April 30, 2006" in its place.

(h) Section 208(h) (D.C. Official Code §42-3502.08(h)) is amended to read as follows:

"(h) No adjustment in rent charged shall exceed (i) as to an elderly or disabled tenant, as defined in and determined by the Rent Administrator pursuant to the procedures applicable under Section 206(f) (D.C. Code §42-3502.06(f)), 4% of the prior rent charged of the rental unit, or (ii) for all other tenants, 8% of the prior rent charged of the rental unit, in each case (i) and (ii) plus the adjustment of general applicability under Section 206 (b) of this chapter. The foregoing limitation shall not apply to the rent charged for a rental unit during the initial leasing period following a vacancy, and shall not apply to an adjustment in the rent charged that implements a rent charged adjustment or preserved rent ceiling adjustment pursuant to a petition under § 42-3502.10, § 42-3502.11, §42-3502.12, or § 42-3502.14, or a voluntary agreement under §42-3502.15."

(i) Section 208(g) (D.C. Official Code §42-3502.08(g)) is amended by striking the phrase "180 days have" and adding the phase "12 months have" in its place.

(j) The title of Section 209 (D.C. Official Code §42-3502.09) is renamed "Rent charged upon termination of exemption and for newly covered rental units".

(k) Section 209 (D.C. Official Code §42-3502.09) is hereby amended by striking "rent ceiling" wherever it appears and inserting "rent charged" in its place.

(l) Section 210 (D.C. Official Code §42-3502.10) is hereby amended by striking "rent ceiling" wherever it appears and inserting "rent charged" in its place, except in subsection (c)(3).

(m) Section 211 (D.C. Official Code §42-3502.11) is hereby amended by striking "rent ceiling" wherever it appears and inserting "rent charged" in its place.

(n) Section 212 (D.C. Official Code §42-3502.12) is hereby amended by striking "rent ceiling" wherever it appears and inserting "rent charged" in its place.

(o) Section 213(a) (D.C. Official Code §42-3502.13(a)) is amended to read as follows:

"(a) When a tenant vacates a rental unit on the tenant's own initiative or as a result of a notice to vacate for nonpayment of rent, violation of an obligation of the tenant's tenancy, or use of the rental unit for illegal purpose or purposes as determined by a court of competent jurisdiction, the rent charged may, at the election of the housing provider, be adjusted either (1) to an amount not to exceed the current lawful amount of rent charged a substantially identical rental unit in the same housing accommodation (except as provided in subsection 213(d)), provided that the increase in the rent charged for the vacant unit shall not exceed 50% of the current lawful amount of rent charged for the vacant unit, or (2) by an increase of 10% of the current lawful amount of rent charged for the vacant unit, except that no increase under this section shall be permitted unless the housing accommodation has been registered under §42-3502.05(f). Any unimplemented portion of such adjustment to the rent charged cannot be preserved and carried over to a subsequent year."

(p) Section 213 (D.C. Official Code §42-3502.13) is hereby further amended by adding a new subsection 213 (d) to read as follows:

"(d)(1) When a unit becomes vacant, the housing provider may petition the Rent Administrator to increase the rent charged on that unit, in addition to the increase permitted by Section 213(a), by the sum of the unimplemented portions of each annual adjustment of general applicability pursuant to subsection 206(b) of this act, each to be calculated as follows, without a hearing: (1) the rent charged for that unit at the time the adjustment of general applicability was taken and perfected shall be multiplied by the corresponding annual adjustment of general applicability, and (2) any portion of the adjustment of general applicability previously implemented shall be subtracted from the product. The maximum assessment shall be the sum of each such difference, and may be added to a vacancy increase pursuant to Section 213(a). The Rent Administrator shall consider separately each annual calculation and shall deny any portion of the assessment absent proof that the adjustment of general applicability was properly taken and perfected, and that the amount of the assessment sought was previously unimplemented. The housing provider shall not impose any assessment, in whole or in part, on any tenant not notified in writing prior to signing a lease of the assessment granted by the Rent Administrator under this subsection (d) (1) or of the assessment requested in a petition pending pursuant to this subsection (d) (1). Nothing in this subsection shall be construed so as to deny the tenant any right granted under section 208(e) of this act.

(2) When a rental unit becomes vacant, without petitioning the Rent Administrator the housing provider may increase the rent charged on that vacant unit, in addition to the increase permitted by Section 213(a), as provided in this subsection 213(d)(2). If the increase calculated under subsection 213(a)(1) is less than 50% of the current lawful rent charged for the vacant unit, the housing provider may further adjust the increase in the rent charged for the vacant unit, up to an amount equal to 50% of the current lawful rent charged for the vacant unit, by implementing all or any portion of the aggregate amount of rent ceiling increases preserved by the housing provider. Rent ceiling increases referred to in the preceding sentence are any rent ceiling increases perfected by the housing provider prior to the effective date of the Rental Control Amendment Act of 2006 to the extent previously perfected and unimplemented. Such rent ceiling increases perfected and unimplemented prior to the date of the Rental Control Amendment Act of 2006 remain in effect and are hereby preserved, but their implementation is limited as provided in this chapter."

(q) Section 213 (D.C. Official Code §42-3502.13) is hereby further amended by adding a new subsection 213(e) to read as follows:

"(e) The housing provider and the tenant to whom the vacant unit is relet shall execute and attach to the lease an addendum, in which the housing provider shall disclose the rent charged adjustments on which the initial rent charged stated in the lease is based; provided that the housing provider is not required to include in the addendum any rent charged adjustments which became effective prior to the applicable limitations period in Section 206(e) or Section 206(h). Upon written request by the tenant at the time such addendum is signed, the housing provider shall provide to the tenant copies of all notices of such rent charged adjustments on which such initial rent charged is based."

(r) Section 214 (D.C. Official Code §42-3502.14) is hereby amended by striking "rent ceiling" wherever it appears and inserting "rent charged" in its place.

(s) Section 215 (D.C. Official Code §42-3502.15) is hereby amended by striking "rent ceiling" wherever it appears and inserting "rent charged" in its place.

(t) Section 216 (D.C. Official Code §42-3502.16) is hereby amended by inserting "or rent charged" after "rent ceiling" wherever it appears.

(u) Section 901 (D.C. Official Code §42-3509.01) is hereby amended by striking "rent ceiling" wherever it appears and replacing it with "rent charged."

Sec. 3. Petitions filed prior to the effective date of these amendments shall be decided pursuant to the provisions of this chapter (the Rental Housing Act of 1985) prior to these amendments.

Sec. 4. The Council adopts the fiscal impact statement in the committee report as the fiscal impact statement required by section 602(c)(3) of the District of Columbia Home Rule Act, approved December 24, 1973 (87 Stat. 813; D.C. Official Code §1-206.02(c)(3)).

Sec. 5. This act shall take effect following approval by the Mayor (or in the event of veto by the Mayor, action by the Council to override the veto), a 30-day period of Congressional review as provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 24, 1973 (87 Stat. 813; D.C. Official Code §1-206.02(c)(1)), and publication in the District of Columbia Register.

RENTAL CONTROL REFORM AMENDMENT ACT OF 2006
Executive Summary

The Executive’s rent control proposal incorporates the desires of tenants, housing providers and the District’s rental housing administration by converting the current rent ceiling system into a rent charged system. The following summary details the ways in which the Executive’s approach benefits all parties.

Tenant Benefits

Clear and Affordable Rents

Rents can only increase once a year for a tenant.
Housing providers are limited to charging annual rent increases of 8% plus the annual CPI.
Tenant incomes will be certified for vacant units so that they will pay 30% of their income for rental housing.
Elderly and disabled tenants now will receive greater protection under rent control. Annual rent increases to elderly, disabled and certain other qualified current tenants earning less than $55,600, are limited to:
- 4% plus CPI for elderly and disabled tenants
- 2% plus CPI if the rent ceiling and rent charged, for the tenant’s current apartment, are the same, under the current rent control program.

Elimination of Rent Ceilings Over Time

Rent ceilings are frozen, will never increase, may only be used on a limited basis, and will eventually disappear.
Increases in the rent charged based on existing rent ceilings can only be taken on vacant units.
Upon vacancy, existing rent ceilings cannot be used to exceed 50% of the current rent charged for a rental unit, even when a comparable unit is used to calculate the rent increase.

Standard Vacancy Rent Increases

Rents on vacant units cannot increase by more than 10% or are capped at 50% of the current rent charged when a comparable unit is used to calculate the rent increase.
Perfected and unimplemented rent ceiling increases can only be used to reach, not exceed the 50% cap on vacancies.

Extended Contest Period

Tenants have 1 year to challenge base rents.
Tenants can go back 3 years to challenge preserved rent ceiling increases.
Tenants have 1 year to challenge all rent charged increases or 3 years if the increase is based on fraud.
Housing providers are required to provide the Rent Administrator, upon request, documents substantiating rent increases.

Accessible Government Liaison

The District’s new Tenant Advocate will assist tenants in learning and understanding the new rent control system.

Increased Disclosure and Participation

Housing providers are required to provide the full calculation of new rent charged to tenants, in writing.
Housing providers are required to inform current and future tenants of all rent increases, in writing.
Tenants continue to retain all existing rights to a hearing when housing providers file for special petitions and voluntary agreements.

Housing Provider Benefits

Consistent Petition Programs

The District’s petition processes and voluntary agreement programs remain intact.
Formerly approved petitions and voluntary agreements will be honored.

Ability to Upgrade Units

Housing providers are given adequate means to improve units upon vacancy by long-term tenants.

Carryover Perfected Increases

Housing providers may carry over rent ceilings that were perfected and unimplemented before the effective date of this new system.

Rental Housing Administration Benefits

Ease and Consistency

Establishment of a clean and manageable rent control system.

Comparable Unit Listing

Housing providers are required to file a listing of all comparable units.

Shift in Burden of Production

Housing providers are required to verify and justify all rent adjustments.
Housing providers are required to file annual rent increase notices with the District government.

Protection Against Litigation

Housing providers may carry over rent ceilings that were perfected and unimplemented before the effective date of this new system.

Government of the District of Columbia
1350 Pennsylvania Avenue, N.W., Suite 317 • Washington, D. C. 24004 • Tel. (202) 727-6365 • Fax (202) 727-6703

Stanley Jackson
Deputy Mayor for Planning and Economic Development

January 13, 2006

The Honorable Jim Graham
Chairman
Committee on Consumer and Regulatory Affairs
Council of the District of Columbia John A. Wilson Building
1350 Pennsylvania Avenue, NW, Suite 105
Washington, DC 20004

Re: Rent Control Amendment Proposal

Dear Councilmember Graham:

In our testimony regarding the "Rent Control Amendment Act of 2005", we expressed our interest in submitting a proposal that would serve as a compromise between the elimination of the highest comparable rent option to establish rent on a vacant apartment and the current regime. We have met with tenants and their representatives as well as landlords and their representatives, considered the interests of the Department of Consumer and Regulatory Affairs in administering the rent control system, and worked to craft a proposal that balances all of these interests. We propose a regime comprised of the following elements.

New Base Rent - Elimination of the rent ceiling system and establishing new base rents, defined as rent legally charged or chargeable on April 30, 2006, for the rental unit which shall be the sum of rent charged on September 1, 2004, and all rent increases authorized for that rental unit by prior rent control laws or any administrative decision issued under those laws, and any rent increases authorized by a court of competent jurisdiction;
Maximum Annual Rent Increases - Provides for annual adjustments in rent charged which cannot exceed 8% plus the annual Consumer Price Index (CPI) and which limits rent increases for the elderly and disabled to 4% plus the annual CPI;
Standard Vacancy Increases - Provides that vacancy increases may be either 10% of the rent charged for that unit or the existing rent charged for a comparable unit up to 50% of the previous rent charged for that unit;
Extended Contest Period - Tenants have 1 year to challenge rent charged as stated in the lease and the current 3 year limitation for challenging a rent adjustment remains in place; and
Registration ]Period - Landlords will have to file new registration of the base rent as well as a list of comparable units within each building for which a registration is filed.

The elimination of the rent ceiling system will serve to simplify the administration of the rent control regime as well as address the concerns of tenants fearing sudden increases based on extremely high rent ceilings. It will also serve to simplify the duties of landlords in maintaining records, and performing onerous filings in order to secure rent ceilings that the market may never allow them to reach in rent charged.

The annual adjustment has met the reasonableness standard from our conversations with both the landlords and the tenants. The vacancy increase based on comparable rent charged with a cap was specifically articulated as acceptable by tenants. The 50% cap on the rent increase balances the need to preserve affordability of the unit and the need of the property owner to make repairs typically needed after the departure of a long-term tenant. The needs are balanced without phasing units out of the rent control regime at a rapid pace, as the use of comparable unit pricing without a cap.

Finally, the one year period allows tenants enough time to challenge the new base rents while giving property owners a sense of finality. The registration of the comparable units at the same time as the base rent filing will serve to bolster the notice provisions and were specifically requested by tenants.

We appreciate the opportunity to present this proposal to you. Should you have any questions, please feel free to contact our lead on this policy issue, Lisa R. Hodges at 202-724-7152.

Sincerely,
Stanley Jackson
Deputy Mayor for Planning and Economic Development

MEMORANDUM

TO: Rent Control Working Group
FROM: Councilmember Graham
DATE: January 18, 2006
RE: New rent control reform proposals per Mayor's suggestions

Since our last meeting, there has been an important development. The Mayor has submitted a proposal for consideration. I have carefully reviewed this proposal (see attached) and there are several concepts which 1 am prepared to incorporate into the legislation:

It does make sense to adopt a simpler, more direct approach to the replacement of the soon-to-be repealed existing vacancy high comparable. Rather than any other idea previously considered, I think it is advisable to simply establish a percentage increase, whether relating to the prior rent charged for that unit OR to the highest comparable rent charged, should one exist. I now advance the following specific proposal: vacancy increases may be either 10% of the prior rent charged for that vacant unit or the existing rent charged for a comparable unit up to 30% of the prior rent charged for the vacant unit.
In addition, 1 am willing to agree to other aspects of the Mayor's proposal. As I stated at last week's working group session, I want to reduce the annual increase on an occupied unit to 8% of the existing rent charged. The Mayor's proposal agrees with this approach. I also agree with his 4% figure as the maximum rent increase for elderly and disabled tenants. However, I cannot accept the Mayor's idea of adding a CPI increase to the 8% or the 4% contemplated annual increases

I would appreciate further discussion on the issue of the abolition of the rent ceiling system. The outcome of that discussion will determine my views on the remaining element of the Mayor's proposal.

I am very pleased that the Mayor and I have found this common ground, which I hope will be acceptable to others.

To: Alicia Lewis, Executive Office of the Mayor
Subject: Re: Mayor's Revised Rent Control Proposal
From: [Redacted by Mayor's Office], (OAG) [Office of the Attorney General]
[undated]

Hi Alicia,

I've reviewed the relevant statutes and here's what I've found:

1. The definitions of "elderly tenant" and "disabled tenant" appear for the first time in the context of exemptions from capital improvement rent increases in section 2 of the Rental Housing Act of 1985 Elderly and Disabled Tenant Rental Housing Capital Improvement Relief Amendment Act of 1992, effective September 29, 1992, D.C. Law 99-154, 39 DCR 5673, protection of elderly and disabled tenants at up to $40,000. The original rent control law, the Rental Housing Act of 1985, effective July 17, 1985, D.C. Law 6-10, 32 DCR 3089, did not contain an exemption for capital improvement increases for elderly or disabled tenants, so the income level for this exemption was established for the first time in 1992.

2. Section 208 of the Rental Housing Conversion and Sale Act of 1980, effective September 10, 1980, D.C. Law 3-86, 27 DCR 2975, afforded protection from eviction related to condominium conversion to elderly tenants who were heads of household, 62 years of age or older, and had an annual income of less than $30,000 per year. Section 2(e) of the Rental Housing Conversion and Sale Act of 1980 Amendments and Extension Act of 1983, effective November 5, 1983, D.C. Law 5-38, 30 DCR 4866, increased this income level to $40,000 per year.

3. The Council's decision to apply a $40,000 income level in 1992, without updating this amount for inflation at that time, could have reflected a conclusion that this level afforded sufficient protection at that point for elderly tenants who were not facing eviction but had units available for rent increases as a result of capital improvements.

Hope this is helpful. Let me know if I can provide any further assistance.

COUNCILMEMBER JIM GRAHAM
DISTRICT OF COLUMBIA
WARD ONE

PRESS RELEASE

FOR IMMEDIATE RELEASE
February 16, 2006

Contact: Alan Heymann
(202) 724-8031

GRAHAM TO MOVE TOUGHER RENT CONTROL TOMORROW

Washington, DC – The first significant strengthening of rent control in 20 years will come to its first Council vote tomorrow. The bill would limit rent increases to once a year, and would finally place a cap on how much rents can be increased in rent-controlled buildings. It would also abolish the ability of landlords to take vacant apartments with affordable rent and convert them into luxury apartments with market-rate rents.

“For rent control to be meaningful, it has to keep apartments affordable,” said Councilmember Jim Graham (D-Ward One), lead author of the bill and chair of the Committee on Consumer and Regulatory Affairs. “There are thousands of units across the District that are unaffordable but still under rent control. We’re proposing to tighten up a system that in many cases hasn’t controlled anything at all.”

Under current law, a landlord can take an empty unit and raise the rent to match the highest comparable unit in the building. The rent control bill would eliminate this possibility and replace it with a maximum 30% increase in most cases.

A “rent ceiling” is the maximum rent that a landlord can charge by law. This figure can rise far beyond even the market rate for an apartment. Current law allows a landlord to raise the rent every 6 months and up to the rent ceiling. The rent control bill would limit rent increases to once every year, and to 8% per year for most people, 4% per year for the elderly and disabled. The bill does not allow rents to be raised 8% per year – it simply limits the frequency and size of increases. Landlords will still need to show a valid, independent reason for each rent increase.

Twelve of 13 councilmembers joined Councilmember Graham in co-introducing or co-sponsoring B16-457. The Committee on Consumer and Regulatory Affairs will vote tomorrow on this and four other bills:

B16-048 would require landlords to show how rent ceilings were calculated whenever asked by a current or potential tenant.
B16-051 would allow tenants to challenge improper rent increases back to 1985, rather than for just the past three years, and to collect damages for improper rent increases for the past three years.
B16-109 would give tenants information they need to know before signing a lease, including the rent ceiling amount, all rent control rules and notice of any reported housing code violations.
B16-458 would further protect tenants’ rights to organize by guaranteeing tenants and tenant organizers use of public space and facilities and establishing stricter penalties for attempting to retaliate against tenants.

Government of the District of Columbia
Executive Office of the Mayor

Office of Communications

FOR IMMEDIATE RELEASE:
THURSDAY, FEBRUARY 16, 2006

CONTACT: VINCE MORRIS
202-727-5011
SHARON GANG
202-727-5011
VALCA VALENTINE
(DM – P&ED)
202-727-4707

Mayor’s Rent Control Proposal Addresses Both Tenant and Housing Provider Concerns

(Washington, DC) At his weekly press briefing yesterday, Mayor Anthony A. Williams urged members of the DC Council’s Committee on Consumer and Regulatory Affairs to support the Administration’s rent control proposal.

“Rent control has always been a sensitive issue, and I want to make clear that I remain committed to preserving rent control in our city,” said Mayor Williams. “But over the years, rent control has been used by some people to get a housing bargain while other more disadvantaged families and individuals struggle to find housing. The centerpiece of my plan would impose means-testing on this process.”

Mayor Williams continued: “Means testing is used in health care, housing, education and dozens of other programs. I believe it should be used for rent control also. It will help ensure that our price-controlled apartments are more accessible to the people who need them the most.

“It’s important that we continue to identify ways to preserve the District’s affordable housing opportunities,” said Mayor Williams. “My proposal does so in a way that benefits tenants while ensuring that the District remains an attractive rental housing market to people of all income levels.”

Mayor Williams’ proposal includes provisions that would:

Simplify the current rent control rules;
Provide clear limits on rent increases;
Protect seniors, disabled tenants and other qualified tenants against excessive rent increases;
Ensure that affordable vacant units are made available to lower- to middle- income households;
Enhance tenant rights to challenge newly established base rents and rent increases;
Improve the administration of the rent control program; and,
Slow the loss of affordable rental housing units in the District.

“This effort represents a careful balance between the needs of tenants and the interests of the building owners,” said Mayor Williams. “I sincerely hope that the Council, especially Councilmember Jim Graham, will work with me to put these proposals into law.”

Side-by-Side Analysis of Mayor’s Proposal Compared to Current Rent Control Rules

Current Rent Control Rules	Mayor’s Proposal
Rents may be increased twice a year.	Rents can only increase once a year.
Housing providers may implement perfected rent ceiling increases which could more than double current rent charged.	Housing providers are limited to charging annual rent increases of 8% plus the annual CPI.
No protections for elderly and disabled tenants against substantial rent increases.	Annual rent increases to elderly, disabled, and certain other qualified current tenants earning less than $55,600, are limited to: 4% plus CPI for elderly and disabled tenants 2% plus CPI if the rent charged is equal to the rent ceiling.
No income eligibility requirement for rent controlled units, meaning affordable units are made available to tenants without consideration of need.	Low-income tenants will be certified for vacant units so that they will pay 30% of their income for rental housing.
No limit on rent ceiling increases which leads to rent ceilings, in some cases, being significantly in excess of rent charged.	Rent ceilings are frozen, will never increase, may only be used on a limited basis, and will eventually disappear.
Rent ceiling increases can be taken on occupied and vacant units.	Increases in the rent charged based on existing rent ceilings can only be taken on vacant units.
Rent ceilings on vacant units can be fully applied, leading to the loss of affordable units.	Upon vacancy, existing rent ceilings cannot be used to exceed 50% of the current rent charged for a rental unit, even when a comparable unit is used to calculate the rent increase.
Rents can be increased by 12% or to the highest comparable unit in the building.	Rents on vacant units cannot increase by more than 10% or are capped at 50% of the current rent charged when a comparable unit is used to calculate the rent increase.
Tenants may no longer challenge original base rents.	Tenants have 1 year to challenge newly established base rents.
Tenants can go back 3 years to challenge preserved rent ceiling increases.	Tenants can go back 3 years to challenge preserved rent ceiling increases.
Tenants have 3 years to challenge all rent charged increases.	Tenants have 1 year to challenge all rent charged increases or 3 years if the increase is based on fraud.
Department of Consumer and Regulatory Affairs is required to maintain all rent control records.	Housing providers are required to provide the Rent Administrator, upon request, documents substantiating rent increases.
Housing providers are required to maintain documentation of rent charge increases.	Housing providers are required to provide the full calculation of new rent charged to tenants, in writing. Housing providers are required to inform current and future tenants of all rent increases, in writing.
Tenants have right to a hearing when housing providers file for special petitions and voluntary agreements.	Tenants continue to retain all existing rights to a hearing when housing providers file for special petitions and voluntary agreements.

Office of Policy and Legislative Affairs Executive Office of the Mayor
(as of 2/15/06)

Rental Control Reform Amendment Act of 2006 Bill 16-457 February 15, 2006

RENTAL CONTROL REFORM AMENDMENT ACT OF 2006 Executive Summary