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D.C. Municipal Regulations (Last Updated: September 13, 2017) |
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Title 14. HOUSING |
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Chapter 14-22. INCLUSIONARY ZONING IMPLEMENTATION |
Section 14-2218. DETERMINATION OF MAXIMUM RESALE PRICE
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2218.1 The Maximum Resale Price (“MRP”) for a subsequent sale of a For Sale Inclusionary Unit shall be determined through use of the formula MRP = (P x ( F) + V (“Formula”), where:
(a)P = the price the Owner paid for the Inclusionary Unit;
(b)V = the sum of the value of the Eligible Capital Improvements and Eligible Replacement and Repair Costs, as determined by the Department of Housing and Community Development pursuant to this section; and
(c)F = the sum of the Ten Year Compound Annual Growth Rates of the Area Median Income (“AMI”) from the year of the Owner’s purchase of the Inclusionary Unit to the year of the sale of the Inclusionary Unit by the Owner. This sum may be expressed:
(1)As the result of the formula F = (1 + [((AMI Year m /AMI Year m-10) ^ (1/10) -1) +…((AMI Year k /AMI year k-10) ^ (1/10) -1) / n]) ^ n, where m = the year in which the Inclusionary Unit was purchased by the Owner, k = the year in which the Inclusionary Unit is sold by the Owner, and n = the number of years the Inclusionary Unit is owned by the Owner; or
(2)As published by the Department of Housing and Community Development.
2218.2 For the purposes of determining the value of “V” in the Formula, the following improvements made to an Inclusionary Unit after the date of purchase may be included at the percentage of cost indicated, to the extent they are permanent in nature and add to the market value of the property:
(a)Eligible Capital Improvements, which will be valued at 100% of reasonable cost, as determined by the Department of Housing and Community Development; and
(b)Eligible Replacement and Repair Costs, which shall be valued at 50% of reasonable cost, as determined by the Department of Housing and Community Development.
2218.3 Ineligible costs shall not be included in the determining the value of “V” in the Formula.
2218.4 The value of improvements may be determined by the Department of Housing and Community Development based upon documentation provided by the Inclusionary Unit Owner or, if not provided, upon a standard value established by the Department of Housing and Community Development.
2218.5 The Department of Housing and Community Development may disallow an Eligible Capital Improvement or Eligible Replacement and Repair Cost if the Department of Housing and Community Development finds that the improvement diminished or did not increase the fair market value of the Inclusionary Unit.
2218.6 The Department of Housing and Community Development may reduce the value of a capital improvement if there is evidence of abnormal physical deterioration of, or abnormal wear and tear to, the capital improvement.
2218.7 The Owner shall permit a representative of the Department of Housing and Community Development to inspect the Inclusionary Unit upon request to verify the existence and value of any capital improvements that are claimed by the Owner.
2218.8 No allowance shall be made in the Maximum Resale Price for the payment of real estate brokerage fees associated with the sale of the Inclusionary Unit.
2218.9 The value of personal property transferred to a purchaser in connection with the resale of a For Sale Inclusionary Unit shall not be considered part of the sales price of the For Sale Inclusionary Unit for the purposes of determining whether the sales price of the For Sale Inclusionary Unit exceeds the MRP.