Examining DC Rent Control, Part II

In Part I of our interview on DC rent control, we covered the policy’s history and some of the arguments surrounding it. Now we shift our focus to the real-world impact of these laws and practical options for improving rent control in the District.

We are joined again by two longtime DC rent control experts: K. David Meit, CPM, principal at Oculus Realty, LLC, and Mark Policy, attorney at Greenstein DeLorme & Luchs, P.C.

Mark, do you think rent control laws have done more harm or good for DC renters? For DC landlords?

The focus should be on maintaining and improving the availability of housing, not on tenants and housing providers. The main problem with rent control in the District of Columbia is that it does not distinguish among renters – rich renters, poor renters, old renters, young renters, renters on Connecticut Avenue and renters in poor areas of the city are all treated alike under rent control. Some tenants need rent protection and many do not. This blunderbuss, broad scale approach creates unsupportable economics and a notoriously incomprehensible rent control system. It adversely affects the quality and availability of housing in the District of Columbia and sets tenants and housing providers at odds with one another – tenants vigorously demand the lowest rent and housing providers are therefore less inclined to invest further in an aged housing stock. That does no good for the tenants who have to live in this housing, or for the housing providers who supply this housing. Rent control also allows the District Government to pass the economic responsibility for housing onto housing providers, rather than creating District Government programs which use the tax dollars of all citizens as a whole to focus on subsidizing renters who truly do need assistance.

David, what do you think?

Rent control has only been good for the politicians. Neither housing providers nor renters benefit. DC rent control generally applies to rental housing built in or before 1975. Due to this, the largest stock of affordable housing is slowing falling apart due to age. With no incentive to invest in long-term repair and maintenance many properties will eventually become uninhabitable. The politicians would argue there are “petition” avenues housing providers may take to earn a return on capital investment. However, the time, money and expertise required to successfully navigate the arcane bureaucracy is not available to vast majority of small, mom and pop, property owners who own most of the housing covered by the Act. Furthermore, the “returns” offered through the petition process are often finite, offering no longer term value appreciation beyond the mere preservation of the asset.

In addition, due to the lack of any means testing, many high quality apartment homes in desirable neighborhoods are often rented at the fraction of their market value to those who least need it, such as first year associate at law firms earning over $100,000 per year. Teachers, firefighters and police rarely get the opportunity.

Mark, is rent control likely to go away in DC anytime soon?

No. Few attorneys use the unqualified answer “no”, but I just did.

David, what are some feasible steps we could take to improve the rent control situation for DC renters and landlords in the near term?

Housing is not an entitlement. However, society has collectively agreed it has an obligation to help those in need. Because of this, government is responsible for providing affordable housing. In DC, rent control unfairly singles out a specific set of housing providers (those who own pre-1973 building) and forces them to offer below market (and often below cost) housing. Government is shirking its responsibility under the current rent control regime.

To improve DC rent control, the City Council should look no farther than New York City. For example, NYC has preserved affordable housing for seniors through its Senior Citizen Rent Increase Exemption (SCRIE) program that reduces property taxes dollar for dollar in return for keeping rents affordable. In this case, the cost is born by the government (through reduced tax income), not the housing provider. In 1997 NYC also enacted means testing and high rent exemptions.

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Read Part I of our interview on DC Rent Control.

Have questions for our experts? Contact David here and contact Mark here.

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