DC At Issue - January 2022
Multifamily/Commercial
Mayor Bowser Declares a Limited Public Health Emergency
On Tuesday, January 11, 2022 Mayor Muriel Bowser declared a limited public health emergency in the District to address concerns related to healthcare capacity. While the executive order doesn’t include any language impacting evictions, rent increases or other issues related to commercial and/or multi-family property management, we wanted to bring it to your attention.
Member Action: At this point it is not expected that the emergency will be extended, but AOBA’s Government Affairs Team will continue to monitor the issue and provide more information as it comes available. If you have questions, please contact Eric J. Jones, MSF
Mayor’s Office & DMPED Launch Request for Information (RFI) to Explore Converting Commercial Properties to Residential
On Tuesday, December 14, 2021 Mayor Bowser, in conjunction with the Deputy Mayor for Planning & Economic Development (DMPED), the Office of Planning (OP) & the Department of Housing & Community Development (DHCD), released the Housing in Downtown Request For Information (HID RFI). The RFI seeks to obtain input from current and prospective property owners on the design of a programmatic approach incentivizing commercial to residential property conversions in Central Washington, with an emphasis on the Central Business District.
The RFI is based on anticipated high office vacancy rates in the Central Business District, which present an opportunity to analyze the viability of transitioning traditional office-centric downtown to include more residential buildings. Per information provided by DMPED the central business District is currently 92% commercial & 8% residential, which is out of line with other submarkets throughout the region. The goal of the RFI is to:
- Encourage conversion of commercial space (including office, hotel, or retail) to residential in Central Washington to increase vibrancy and offset potential declines in commercial property tax revenue; and
- Increase affordable and workforce housing units downtown.
Member Action: DMPED has asked that members who are interested respond to the RFI by 5pm on Friday, January 28, 2022 via their website. Members with questions are asked to contact Eric J. Jones, MSF.
January 15, 2022, Marks Effective Date of New Covid Vaccination Entry Requirements
Mayor Muriel Bowser’s VaxDC Team recently released updated guidance on vaccine entry requirements that are effective January 15, 2022. Read the full order here.
AOBA publicly applauded how the new rules were rolled out. Of particular importance to members are two clarifications regarding gyms and fitness centers. Private gyms and fitness centers in both multifamily and office buildings, available only to residents and office tenants, are exempt from the verification requirement.
In addition to the gym/fitness center clarification, AOBA reminded the government that many of the regulations placed on businesses during the last two years have been done by emergency fiat. Businesses crave predictability and consistency. Having little to no time to come into compliance hits us hard. Conducting policy in a deliberate fashion, as was done in this case, avoids unnecessary confusion for both businesses and the public.
Member Action: AOBA members are encouraged to continue to bookmark https://coronavirus.dc.gov/vaxdc. If you have any questions on how to implement a certain rule, do not hesitate to contact your advocates Katalin Peter, Esq.on the multifamily front and Eric Jones, MSW on the commercial front at.
DC Tax Review Commission: Are Real Estate Taxes on the Table?
Once every 10 years, DC’s Tax Revision Commission submits a report with tax code revision recommendations. As the next Tax Revision Commission is slated to move forward this year, the business community has urged the Council to use the Tax Revision Commission as a tool to review the city's entire tax regime. While certain taxes have unfortunately already moved forward on high-income earners, distinct real estate taxes are still slated to be reviewed by the Tax Commission.
Member Action: Members interested in serving on the Tax Review Commission to hold the line on real estate taxes during these delicate times, please contact Eric J. Jones, MSF
Multifamily
DC Receives $17.7 Million in Additional Rental Assistance
DC, similar to other large metropolitan jurisdictions, used up its rental assistance funds at the end of last year. Now, the US Treasury has given DC an additional $17.7 million allocation.
AOBA members supported the Mayor and Council’s advocacy efforts to acquire more funding. While this additional allocation is helpful, AOBA staff expects it to serve residents affected by COVID-19 for only a short period of time. Rental assistance is currently the best way for residents and housing providers negatively impacted by COVID-19 to recover economically. We will continue to advocate for more emergency rental assistance from local sources, such as the District’s own Emergency Rental Assistance Program (ERAP).
Permanent Eviction Record Sealing Bill Moves Forward at the Council
AOBA members have been complying with Emergency and Temporary legislation related to eviction record sealing during the past year. See legislation here & here.
The DC Council is now considering passing permanent legislation, the Eviction Record Sealing Amendment Act, that includes certain aspects of the emergency versions. The following are the five critical provisions within the Act and AOBA’s position on them (in italics):
- A valid rental registration is required to file an eviction. AOBA members support this codification.
- Eviction proceedings that find in favor of the housing provider are sealed 3 years after final resolution. AOBA understands the importance of sealing an eviction record after a certain amount of time. AOBA believes this number must be 7 years, similar to derogatory information reported on your credit file. DC has the most favorable tenant laws in the nation. If someone has a legitimate eviction on their record, that indicates a considerable level of financial risk exists if this applicant is accepted, something housing providers should be able to take under consideration.
- When a HP intentionally bases an adverse action against a prospective tenant on an eviction court record that they know to be sealed, the tenant may pursue civil action in Superior Court. Upon prevailing, the tenant would be entitled to reasonable attorney fees, incidental damages; and equitable relief as may be appropriate. AOBA feels that so long as the sealing is after 7 years, this is acceptable.
- Tenant application fees cannot be greater than $35 or the actual cost of obtaining info for a screening a prospective tenant. AOBA members wholly disagree with this provision. There is a cost of doing business, within reason, and just like any other industry it takes time and resources to conduct proper checks. Third parties are responsible for these costs and the Council should not be engaged in price setting. It is a very dangerous precedent.
- Any housing provider who violates tenant screening provisions shall be subject to a civil penalty for each violation not to exceed $1,000. AOBA feels so long as the above items are clarified, the fine should be only for a willful violation.
AOBA Member Action: Staff asks members to read the bill in its entirety here and submit any comments to Katalin Peter, Esq.. This is a key piece of rental related legislation for multi-family providers this session and will certainly impact your operations.
Mayor Announces Cash 2 Covenant Program to Accelerate Affordable Housing Development in Upper Northwest
Mayor Muriel Bowser released her Housing Equity Plan two years ago, with the goal of creating 36,000 new units by 2025. In the time since, her office says the city has produced more than 20,000 housing units. The growth in affordable units however has been relatively slow.
In response, the Mayor’s office announced a program on December 16 to help rectify this underproduction, focusing on the District’s wealthier areas where affordable housing is difficult to build. The program, called Cash 2 Covenant, will allow housing providers to convert vacant market-rate units into units affordable to residents making up to 80% median income. DHCD, which will run the program, will provide a financial incentive to mark units as affordable for about 15 years, though that has not been finalized. It is also unclear what type of financial incentive will be provided.
While this may yet be an attractive proposition for housing providers with units that have been vacant for long periods, the program in theory relies on there being many vacant market rate units available. Moreover, at first glance it appears the incentives would have to be overwhelmingly favorable, especially given the context of rising operational costs, the current market recovery, and neighborhood opposition.
AOBA Member Action: Staff is looking for member feedback on this program. Areas of interest include the level of incentives necessary to entice member engagement with the program and if the program could facilitate the production of a significant number of units.