4196140 Zoning Commission Second Notice of Proposed Rulemaking: Case No. 04-33F (Text Amendments: PUDs & Inclusionary Zoning - Termination of Affordability Controls upon Foreclosure)

ZONING COMMISSION FOR THE DISTRICT OF COLUMBIA

SECOND NOTICE OF PROPOSED RULEMAKING

Z.C. Case No. 04-33F

(Text Amendments: PUDs and Inclusionary Zoning – Termination of Affordability Controls upon Foreclosure)

 

The Zoning Commission for the District of Columbia (Commission), pursuant to the authority set forth in § 1 of the Zoning Act of 1938, approved June 20, 1938 (52 Stat. 797; D.C. Official Code § 6-641.01 (2008 Repl.)) hereby gives notice of its intent to amend §§ 2409, 2602, and 2603 of the Zoning Regulations of the District of Columbia, Title 11 of the District of Columbia Municipal Regulations (DCMR). The Commission previously gave notice of its emergency adoption of amendments to these provisions and its intent to adopt those amendments through a notice of emergency and proposed rulemaking published in the December 7, 2012 edition of the D.C. Register at 59 DCR 14073.  

 

Among other things, the originally proposed amendments would add new §§ 2409.11 and 2602.10 that, under certain circumstances, provided for the automatic termination of affordable housing controls imposed by an order granting a planned unit development or by the Inclusionary Zoning regulations set forth in Chapter 26.  One of the circumstances that would trigger automatic termination is when title to the mortgaged property is transferred by foreclosure or deed-in-lieu of foreclosure. 

 

Through its Hearing Report dated January 14, 2013, the Office of Planning recommended restricting the termination of the affordability requirements in these circumstances to just the first mortgagee, based on the potential for harm from predatory lenders. The Commission approved that change and authorized the publication of this notice of proposed rulemaking.  The Commission did not also take emergency action and therefore the broader version of the amendments will remain in effect until March 19, 2013 or upon the publication of a Notice of Final Rulemaking in the D.C. Register, whichever occurs first.

 

Final rulemaking action shall be taken in not less than thirty (30) days from the date of publication of this notice in the D.C. Register.

 

Chapter 24, PLANNED UNIT DEVELOPMENT PROCEDURES, § 2409, IMPLEMENTATION, is amended by adding new § 2409.10 and 2409.11 to read as follows:

 

2409.10           The Zoning Administrator shall not approve an application for a certificate of occupancy for a PUD if the order approving the PUD includes a condition requiring the provision of affordable housing unless the owner has executed monitoring and enforcement documents with the District of Columbia, which will bind the owner and all successors in title to abide by such terms as the District considers necessary to ensure that the affordable housing will be constructed, marketed, sold, re-sold, rented, and occupied, so as to be affordable to the target households during the specified control period and safeguarded regarding foreclosure.

 

2409.11           A condition in an order approving or modifying a PUD that requires the provision of affordable housing shall automatically terminate if title to the mortgaged property is transferred following foreclosure by, or deed-in-lieu of foreclosure to, a mortgagee in the first position, or a mortgage in the first position is assigned to the Secretary of the U.S. Department of Housing and Urban Development provided the owner has executed monitoring and enforcement documents per the requirements of § 2409.10.

 

Chapter 26, INCLUSIONARY ZONING, is amended as follows:

 

Section 2602, APPLICABILITY, is amended as follows:

 

By amending § 2602.4 to add a reference to new §§ 2602.10 and 2603.6, so that the provision will read as follows:

 

2602.4             Except as provided in §§ 2602.5, 2602.10, 2603.5, 2603.6, and 2607.1(c) or the Act, all inclusionary units created pursuant to this chapter shall be leased or sold only to eligible households for so long as the inclusionary development exists.

 

By adding a new § 2602.10 to read as follows:

 

2602.10           The requirements of this chapter shall automatically terminate if title to the mortgaged property is transferred following foreclosure by, or deed-in-lieu of foreclosure to, a mortgagee in the first position, or a mortgage in the first position is assigned to the Secretary of the U.S. Department of Housing and Urban Development.

 

Section 2603, SET-ASIDE REQUIREMENTS, is amended by adding a new § 2603.6 to read as follows:

 

2603.6             Notwithstanding § 2603.5, nothing shall prohibit the Mayor or the District of Columbia Housing Authority to acquire title to inclusionary units in a for-sale inclusionary development if any of the following circumstances exist:

 

            (a)        There is a risk that title to the units will be transferred by foreclosure or deed-in-lieu of foreclosure, or that the units’ mortgages will be assigned to the Secretary of the U.S. Department of Housing and Urban Development; or

 

(b)        Title to the units have been transferred by foreclosure or deed-in-lieu of foreclosure, or the units’ mortgages have been assigned to the Secretary of the U.S. Department of Housing and Urban Development

 

All persons desiring to comment on the subject matter of the proposed rulemaking action should file comments in writing no later than thirty (30) days after the date of publication of this notice in the D.C. Register.  Comments should be filed with Sharon Schellin, Secretary to the Zoning Commission, Office of Zoning, 441 4^th Street, N.W., Suite 210-S, Washington, D.C. 20001, or via email at [e-mail].  Ms. Schellin may also be contacted by telephone at 202-727-6311 or by email at [e-mail].  Copies of this proposed rulemaking action may be obtained at cost by writing to the above address.