6145646 Resolution 21-573, Rent Control Hardship Petition Limitation Emergency Declaration Resolution of 2016

A RESOLUTION

 

21-573 

 

IN THE COUNCIL OF THE DISTRICT OF COLUMBIA

 

July 12, 2016

 

To declare the existence of an emergency with respect to the need to amend the Rental Housing Act of 1985 to limit the amount of a hardship petition conditional rent increase to 5% of the rent charged, and to require that a rent adjustment be repaid by a housing provider to a tenant within 21 days of a conditional increase being amended.

 

RESOLVED, BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this resolution may be cited as the “Rent Control Hardship Petition Limitation Emergency Declaration Resolution of 2016”.

 

Sec. 2. (a) The District’s rent control regime is established by the Rental Housing Act of 1985; approximately 79,000 housing units are subject to the law, accounting for 66% of the rental housing stock in the District.

(b)   For units subject to rent control, annual rent increases are limited to a maximum of 10% for most tenants and 5% for seniors and individuals with disabilities. However, under the hardship petition process, a housing provider can apply to the Rent Administrator at the Department of Housing and Community Development to raise rents by more than the standard increase in order to achieve a 12% rate of return on the housing provider’s investment in the building. The hardship petition requires the housing provider to submit a schedule of income and expenses, which the Rent Administrator can use to calculate a new rent based on the 12% rate of return.

(c)    If a hardship petition is not decided within 90 days, the housing provider may automatically start collecting the entire rent for which the housing provider originally applied. As hardship petitions are rarely decided within the 90-day time period, conditional increases are frequently granted that result in rent increases of 50% to 100%.

(d)   These rent increases place a significant burden on low-income renters, increasing the likelihood of displacement and homelessness. For example, tenants of a building in Ward 7 were charged a 34% increase and were threatened with eviction if they did not pay the rent increase. Tenants were forced to file a lawsuit challenging the increase based on numerous housing code violations, and the dispute was prolonged for more than 4 years. During this time the higher rents were required to be paid into a court-mandated escrow account.

(e)    Although a conditional increase may ultimately be reversed, it is often too late for tenants who have been displaced by rent increases that housing providers were ultimately not authorized to charge. More than 88 hardship petitions were filed between 2007 and 2013, significantly raising the rent on thousands of District residents.

(f)    Without swift action by the Council to counter opportunities for abuse of the hardship petition process, additional tenants will likely be priced out of their homes.

(g)   This legislation would extend the authority of the Rent Control Hardship Petition Limitation Temporary Amendment Act of 2015, effective January 9, 2016 (D.C. Law 21-49; 62 DCR 13990), which will expire on August 21, 2016. D.C. Law 21-49 is identical to legislation moved in Council Period 20 by then Councilmember Bowser.

(h)   On March 17, 2015, permanent legislation, the Rent Control Hardship Petition Limitation Amendment Act of 2015 (Bill 21-146), was introduced by Councilmember Bonds along with Councilmembers Silverman, Nadeau, and Cheh. The bill was referred to the Committee on Housing and Community Development and a hearing on the bill was held on May 26, 2015.

(i)     After a wait of 4 months, the Committee on Housing and Community Development received from the Department of Housing and Community Development data on the past 5 years of hardship petitions, upon which informed policy decisions may be made in support of the permanent version of this bill. The data will be analyzed over the summer, which will allow the committee to mark-up the permanent version of this legislation in the fall.

(j)     It is necessary to move this emergency legislation so there will not be a gap in the law until the legislative process is completed for Bill 21-146.

 

Sec. 3. The Council of the District of Columbia determines that the circumstances enumerated in section 2 constitute emergency circumstances making it necessary that the Rent Control Hardship Petition Limitation Emergency Amendment Act of 2016 be adopted after a single reading.

 

Sec. 4. This resolution shall take effect immediately.