Testimony on FY26 Budget before Committee of the Whole
Good afternoon, Chairman Mendelson and the members of the Council of the District of Columbia. My name is Eric J. Jones, MSF, and I am here today as a fourth-generation Washingtonian and a Ward Four resident, who also has the honor of serving as the Vice President of Government Affairs, DC-Commercial, for the Apartment and Office Building Association of Metropolitan Washington (AOBA).
Founded over 50 years ago, AOBA serves as the primary membership organization for commercial office buildings and multifamily residential real estate in the Greater Washington, D.C. area. In the District, AOBA’s membership represents something in the area of 120,000 apartment units and more than 75 million square feet of commercial office space. Within the region, our members represent more than 150,000 million square feet of commercial office space and more than 450,000 residential units within the District, Maryland, and Virginia.
AOBA is federated with the Building Owners and Managers Association International (BOMA) and the local affiliate of the National Apartment Association (NAA). In line with our members’ commitment to providing sustainable, long-term solutions, AOBA’s staff includes a Director of Sustainability Policy and Strategy, along with a full-fledged utility group that, through the AOBA Alliance, facilitates low-cost energy procurement for the commercial building industry in DC, Maryland, Pennsylvania, and Virginia.
I am hereby submitting this testimony to the Committee of the Whole in response to the Fiscal Year 2026 Budget and the subsequent Fiscal Year 2026 Budget Support Act that Mayor Muriel Bowser has presented to the Council. Mr. Chairman and esteemed members, I commence by acknowledging the adage that “Budgets are Moral Documents,” with which I wholeheartedly concur. It is through this perspective that I endeavor to evaluate the items delineated in the six documents currently before us.
In particular, this testimony will focus on items within the FY 2026 Budget Support Act that we believe are vital to helping the District continue the positive growth we have begun to see following the COVID-19 pandemic. Additionally, some of these items will help signal that the District is listening and will encourage new investment in the District, which is needed now more than ever.
Title II. Economic Development
Within the Economic Title of the BSA, several recommendations are essential to the District’s continued growth and prosperity.
Subtitle C. Neighborhood Prosperity Fund – one of the most effective ways to uplift multi-family property owners, both small and large, is by investing in dynamic communities that offer enticing amenities. These improvements not only attract new residents but also encourage our current neighbors to remain. The “Neighborhood Prosperity Fund Amendment Act of 2025” aims to deliver essential resources to foster development and enhancements in communities that need them the most.
Subtitle D. Technology Ecosystem Grants – As the federal government reduces its presence in the region, the District must fill commercial spaces currently occupied by the feds. The “Technology Ecosystem Support Amendment Act of 2025” will provide financial incentives to attract technology companies to the District. This investment will offer resources for companies, enabling commercial landlords to fill vacancies and create a customer base for service providers. This initiative will generate job opportunities and foster entrepreneurial growth within the District.
Subtitle E. Vending – The “Vending Compliance and Modernization Amendment Act of 2025” will introduce much-needed changes to food truck and street vending regulations within the District. Since the conclusion of the COVID-19 Public Health Emergency, AOBA’s membership has urged the District government to utilize the regulatory process to encourage new uses for our public spaces. We believe that by clarifying the vending process, the District will not only be better equipped to track vendors in public areas but will also ensure equitable opportunities, which contribute to creating more vibrant communities.
Subtitle F. Tipped Minimum Wage – In November 2022, District voters approved Initiative 82, which was led by a national organization and promoted locally by a non-DC resident seeking to reform the way the restaurant industry operates and compensates its employees. While advocates promised that I-82 would have a net positive impact on our local restaurant industry, several years of research have shown otherwise.
As highlighted in the January 2025 study released by the Employment Policies Institute, “Initiative 82 Backfired on Workers.”[1] In particular, the report highlights nearly 4,000 jobs lost due to the implementation of I-82. Furthermore, the study notes that nearly 80% of all restaurants cut hours, laid off staff, or stopped hiring new employees. Additionally, as reported by the Restaurant Association of Metropolitan Washington (RAMW), more than 40% of local restaurants are on the verge of closing due to the costs directly associated with I-82. [2]
In June of this year, the Council voted to pause the implementation of I-82 for the reasons listed above. However, this pause must be made permanent, which the BSA would do. In particular, without this change, future economic development and our downtown recovery will be in jeopardy. Without a vibrant restaurant industry, many of our commercial buildings will lose their ground floors, making it more challenging to encourage tenants to renew or sign new leases.
While some view this as an individual restaurant issue and do not recognize its connection to the fiscal viability of our commercial corridors, empty storefronts will eliminate a source of income for commercial property owners and managers. The vacant spaces left by these businesses also decrease the value of commercial properties, which negatively impacts the District’s tax base. This is in addition to the loss of sales taxes and income taxes. Furthermore, studies have shown that reduced traffic in commercial corridors is associated with increases in crime.[3]
Subtitle N. Parking Benefit Equivalent Program – Contrary to the promises made when it was introduced nearly a decade ago, the parking cash-out program has done little to promote a return to downtown. As we continue to encourage employees to return to the office, employers must provide as many benefits as possible to facilitate this transition. This is why we strongly advocate for the inclusion of the "Parking Benefit Program Amendment Act of 2025," which aims to correct a legislative action that not only discouraged employees from returning to the office but also removed benefits that many employees negotiated at the time of hiring, without tangible alternatives.
Subtitle R. Robert F. Kennedy Campus Redevelopment – Over the past several years, the District has fully embraced the term “District of Champions.” In June 2024, DMPED released a study showing that major sports teams generated $5 billion for the District’s economy in the previous year. This figure is expected to grow as the Capitol One Arena undergoes modernization by Monumental Sports in partnership with the city. Meanwhile, our other football team, the DC Defenders, has just won the United Football League (UFL) Championship. The addition of teams like the Defenders, along with more games for groups such as the Washington Spirit, has encouraged others to view the District as a sports destination, as evidenced by the Club World Cup games currently being held at Audi Field.
The return of our football team to the Nation’s Capital presents an opportunity not only to grow our projected sports and entertainment revenue but also to redevelop an underutilized section of the District and provide more opportunities for individuals to live, work, and play in the area. Additionally, the tax benefits to the District’s bottom line will generate further resources that can be allocated across all Eight Wards. For this reason, we implore you to include and support the “Robert F. Kennedy Campus Redevelopment Act of 2025.”
"Subtitle V. Rebalancing Expectations for Neighbors, Tenants, and Landlords (RENTAL) Amendment Act of 2025” – the language included in the RENTAL Act represents possibly the most groundbreaking changes to the District’s multi-family landscape in a generation. From common-sense changes to rental housing laws, eviction reforms, and the Tenant Opportunity to Purchase Act, also known as TOPA, this legislation is long overdue.
Without the common-sense recommendations made after discussions with tenants, housing advocates, developers, investors, property owners, managers, and groups like AOBA, this legislation would not genuinely represent progress. As highlighted during the recent hearing on this legislation, the District has shifted from being the darling of the investment world to a pariah, primarily due to legislative mistakes over the past decade.4 Even with the completion of more than 36,000 housing units since 2019, which ranks highest in the nation, our housing industry is in crisis.5 The only way to right this ship is to include the “Rebalancing Expectations for Neighbors, Tenants, and Landlords (RENTAL) Amendment Act of 2025.”
Title VI – Operations and Infrastructure
In addition to the previously mentioned items under Economic Development, several key items within Title VI of the BSA are vital for supporting our overall goals as a city. The subsections are listed below:
Subsection G. Building Energy Performance Standards (BEPS) – while it is essential to ensure that the District continues to advance towards its environmental goals, this must be done strategically to ensure the long-term success of the program. Unfortunately, over the last several years, our approach has been to push ahead, even when issues have proven to continue, which is what finally led to the passage of recommendations by the BEPS task force at the end of 2024. Unfortunately, however, much of the push around BEPS has been from a purely academic standpoint, ignoring the financial realities of District property.
A BEPS task force raised this during the June 13 hearing on DOEE. During the Committee on Transportation and the Environment hearing, the task force member highlighted that the Council had recently passed an amendment providing an exemption for financial distress. Unfortunately, during this time, many properties have seen their values decrease, which would give an exemption to the current cycle.
Instead of simply allowing a large number of properties to obtain exemptions (once the Department of Energy and Environment (DOEE) releases regulatory language defining fiscal hardship), the BSA proposes a more logical solution. Extending the code cycle would provide much-needed relief to property owners and managers. Additionally, it would enable DOEE to finalize regulations and collaborate with the industry to foster a better understanding while also aiming to prevent the recurrence of previous mistakes.
It is through this lens that we ask the members to convey that the sustainable growth of the District should be approached pragmatically. Consequently, our economic development goals will be severely hampered without the passage of the “Building Energy Performance Standards Amendment Act of 2025.”
Subtitle H. Net-Zero Energy-Ready Buildings – As an industry, we believe that the passage of the “Net-Zero Energy Ready Building Code Amendment Act of 2025” would support Subtitle G. In particular, several concerns have been raised regarding the future implementation of Appendix Z. By providing this extension, it would allow the relevant changes to be made to Appendix Z as well as the relevant sections of the District’s current municipal code. Considering that the District is already behind in codifying its building code, this would provide an opportunity to further address concerns through the code process within the Construction Codes Coordinating Board (CCCB).
Subtitle I. Project Labor Agreements (PLAs–) – Finally, as discussed during the hearing on updates at the Capital One Arena, mandating PLAs on District-funded projects has done little to improve our financial standing. In addition to increasing costs, it has continued to exclude District-based companies and has done little to promote the hiring of our residents.
The passage of the “Project Labor Agreements Amendment Act of 2025” will enable the District to save funding, as demonstrated in numerous fiscal impact statements for projects with Project Labor Agreements (PLAs).[4] Furthermore, it will allow more local companies to bid on and work on projects, thereby increasing our tax base and providing additional opportunities for District residents. Lastly, it will enable us to utilize those cost savings to serve residents and businesses better while remaining fiscally prudent with tax funds.
Conclusion
Chairman Mendelson, as I previously mentioned, we all know that budgets are moral documents, but where do we go from here? Should we set aside our political leanings and philosophical views in the interest of ensuring that next year we, as a District, are in a better position, or should we follow the example of the current group of federal legislators and create a “Legislative Moral Hazard” regardless of the long-term consequences?