As debate kicked off on his rent control measure, At-Large Councilmember Robert White issued a warning to his colleagues.
“There is an absolute lack of data here. We are working today on a pile of assumptions,” White said on May 30. “That is why we have to be particularly careful not to do anything that may have a worse outcome.”
The D.C. Council was in its first hour of discussing how much landlords should be allowed to raise rent at buildings subject to rent control, and there was a clear split in the room. Councilmembers were considering dueling amendments to White’s bill, one of which Ward 2 Councilmember Brooke Pinto was rewriting on the spot to reflect a colleague’s recommended changes.
Yet, lawmakers agreed a misstep could have grave effects: High rents could push tenants into homelessness, while low rent increases could push landlords to sell their buildings. Councilmembers stressed they wanted to get the policy right, as it would impact the housing of tens of thousands of Washingtonians who live in rental buildings constructed before 1976.
Legislators also agreed they didn’t have all the information needed to make the decision — the consequence of a long-stalled technology project that is only now in its final stages.
“There was an advocate here for landlords earlier and I asked, ‘How many of your members have rent-controlled units?’” Ward 5 Councilmember Zachary Parker said. “They weren’t able to answer me, and to me, that was concerning.”
“Our challenge here is there’s a lot of information we don’t know, including about landlord costs,” Ward 3 Councilmember Matthew Frumin added. “We need to settle on a number or a set of numbers that will be fair to everyone.”
That was proving to be difficult. D.C. renters who live in rent-controlled units were initially going to be subject to rent increases of up to 8.9%, largely because of high inflation. The council agreed that was too high and, after a chaotic decision to postpone the matter, voted a week later to cap rent increases for 2023 at 6% for most rent-controlled units and 4% for elderly and disabled tenants, starting July 1. Over 2023 and 2024, cumulative rent increases are capped at 12% and 8%, respectively.
The absence of meaningful data regarding rent control in the District isn’t a new issue. Despite a council mandate to the D.C. Department of Housing and Community Development (DHCD) eight years ago for a database of all rent-stabilized apartments, D.C. still doesn’t have information about how many units there are, the conditions of the units or how much tenants are currently paying. This information could have helped lawmakers decide how much they could cap rent increases without risking the loss of more rent-controlled units, White said.
The Office of the Tenant Advocate (OTA), an independent agency tasked with building the database after DHCD failed to do so, now promises the resource will be available by the end of the year. Lawmakers hope this will give them the information they need the next time they talk about reforming rent control.
Lacking necessary information
Rent control is one tool D.C. uses to make housing more affordable, although the policy’s critics argue it overly interferes with the housing market. In rent-controlled units, rent increases are regulated by the D.C. government and are generally smaller than landlords would otherwise charge.
This form of rent stabilization in D.C. dates to passage of the Rental Housing Act of 1985, which limited rent increases for most apartments built before 1976.
But there’s no firm number available on how many apartment units that totaled. Estimates from the Urban Institute at the time and from the D.C. Policy Center in the present day have ranged from 85,000 to 125,000.
Nearly 40 years later, there is still no definitive list of rent-controlled units. In a 2020 rent control study, Yesim Sayin, executive director of the D.C. Policy Center, estimated that about 73,000 out of the total 124,000 apartments in D.C. were subject to rent control. Sayin said the organization looked at all the available information about the number of buildings constructed before 1976 to evaluate how many apartments would be included. But it’s a hard number to confirm, since units that were originally under rent control can fall out if they’re converted into condos, demolished or subsidized by the government.
“With rent control, you don’t see what you don’t see,” Sayin added.
While DHCD does have a database with individual documents for some buildings, the contents are incomplete and do not provide a comprehensive look at rent control in D.C.
In 2015, the council directed DHCD to create a separate, publicly available database of rent-controlled units — an online tool that would include the address of units, base rent and history of rent increases.
Although the database was slated to be finished within a year, DHCD made little progress, WAMU/DCist reported in 2020. The council eventually shifted responsibility for the database to OTA. After a contract was awarded late, OTA planned to have it ready in 2021.
That timeline was derailed, however, by the subsequently divided Department of Consumer and Regulatory Affairs, which withheld essential data from OTA, Washington City Paper reported in 2022. Moreover, OTA said it had to update the database after D.C. revised its rental housing laws in 2021.
OTA now says the database is complete, and officials are in talks to transfer it into DHCD’s Rental Accommodations Division. Once that is finished, it will take a few months to launch. The first iteration will likely exclude information on code violations, the condition of buildings, past rent increases and average tenant incomes.
Setting the rent increase
Advocates and lawmakers say that while the new database will be a huge step forward, there is likely to still be key information missing even after it is completed.
During last month’s rent control debate at the D.C. Council, some landlords claimed their units would fall into disrepair and that they might be forced to sell their properties if the city lowered the legally allowable rent increases, White said. They cited the rising cost of utilities and labor, as well as the impact of D.C.’s blanket freeze on rent increases during the pandemic. White, however, said he wanted to see building cost and profit information.
“We can’t just take their word for it,” White said in an interview. “The landlord community is going to have to step up their data game.”
White, who chairs the Housing Committee, and other councilmembers expressed concern that limiting rent increases too much could indeed drive landlords to sell their properties. But without information on the state of the buildings, the scope of needed repairs or the landlord’s profit margins, lawmakers said that breaking point was unclear.
“Therein lies the problem of rent control, because when you’re limiting rent, you’re limiting profits, and if there’s something else that’s profitable to do, people will convert a building into that something else,” Sayin said. “They can do whatever they want with their money — they can sell the building and invest in [treasury bonds] and never have to worry about another tenant, another building employee who didn’t show up on time.”
A solid number on how many rent-controlled units D.C. has already lost might help indicate at what point landlords are likely to sell their units altogether. In the absence of any definite number, Sayin estimates that rent-controlled units have decreased between 15% and 30% since the law was implemented.
“The higher the allowable increase, the more likely the building will remain in rent control because the owner is making a return,” Sayin said. “And the lower that rate increase is, the tenants benefit more, obviously, at least in the short run. But in the long run, they may find themselves in buildings that are not very well maintained.”
“Someone pays in some way — it’s just that we don’t see that, so we legislate without that knowledge,” she added.
There’s reason to believe landlords exaggerate these concerns, said Eliana Golding, senior policy analyst at D.C. Fiscal Policy Institute. In some buildings, tenant organizers have been asking for repairs for years without success. Landlords can raise rents even outside the cap if they prove they need to, or can apply for funds that help with repairs and preservation.
Partially because of a lack of information from landlords on issues such as maintenance, the council relied on data from the tenant side, Ward 4 Councilmember Janeese Lewis George said over email. Frumin also noted in an interview that there were clear indications tenants needed relief — rents, for instance, were set to rise far above wage growth.
Lewis George pushed for the council to look at other factors as well, like the increased cost of living, rents in market-rate housing, and what other nearby jurisdictions have done to help tenants. “We can’t center profit over the needs of families on the brink of being pushed out of D.C.,” she wrote.
If the council had better information, White said, legislators might have been able to tailor rent increases to the kind of buildings that need them most, while broadly protecting tenants.
“The preference usually is to use a scalpel rather than a sledgehammer, but without any specific data, we couldn’t use a scalpel,” he said.
Future rent control reform
During last month’s debate, lawmakers were also hoping to avoid incentivizing landlords to target rent-controlled units to voucher holders.
The D.C. Housing Authority (DCHA) administers housing vouchers and determines the value of each voucher. Recent findings by the U.S. Department of Housing and Urban Development show DCHA has failed to take the necessary steps to ensure the housing vouchers it administers are valued at market rate. Some landlords of rent-controlled properties have been accused of taking advantage of this arrangement by intentionally delaying maintenance on their units to drive out tenants in favor of voucher holders to turn a higher profit.
Frumin has already introduced a bill that would subject apartments rented with vouchers to rent stabilization. Lawmakers are still unsure how many units this would impact.
Frumin is already hearing some of the same concerns about his bill that landlords previously raised about capping rent increases, but he says he needs to see the data.
In support of various rent control reforms, OTA’s Chief Tenant Advocate Johanna Shreve in March called for the city to limit allowable rent increases each year to just inflation. Adding an additional 2%, as the city does now, “compounds the cost of housing across 20 years,” she testified, eventually making units unaffordable.
For more than a decade, Shreve has urged the city to require that landlords set aside a certain portion of their revenue each year in “replacement reserve accounts,” which would go toward maintenance and other costs. This is a standard industry practice that keeps the financial burden from falling on tenants, according to OTA.
Advocates like Golding also hope to limit rent increases further while also making it harder to remove units from rent control. They also want to expand the number of rent-stabilized units by making the law applicable to buildings constructed in the 1980s and beyond.
“Because we know that the amount of rental housing stock that is rent-stabilized is diminishing every year, we need to adjust our policies such that more units can fall under that program,” she said.
This article was co-published with The DC Line.
Annemarie Cuccia covers D.C. government and public affairs through a partnership between Street Sense Media and The DC Line. This joint position was made possible by The Nash Foundation and individual contributors.