The District’s rent control law is set to expire at the end of 2020. Roughly 45% of the city’s rental units are currently price-stabilized and the D.C Council is considering a 10 year extension, but some housing activists and tenants’ rights organizers say the legistlation needs a comprehensive overhaul.

Is rent control an affordable housing policy? And can it be used as a tool to alleviate the affordable housing shortage in the city? Or is it simply exacerbating the problem? We’ll find out what rent control, or its fading away, mean for D.C. residents.

Produced by Margaret Barthel

Guests

  • Victoria Gonçalves Bilingual Tenant Organizer, Latino Economic Development Center
  • Ally Schweitzer Business and Development Reporter, WAMU 88.5; @allyschweitzer
  • Randi Marshall Vice President of Government Affairs at the Apartment and Office Building Association; @RandiKMarshall

Transcript

  • 12:32:18

    KOJO NNAMDIWelcome back. The District's rent control law covers nearly half of the rental units in D.C., preventing landlords from making extreme rent increases on those properties. The current law is set to expire in 2020, but a new bill before the D.C. Council was extended another 10 years, until 2030. Housing advocates -- including D.C.'s new tenant union -- says that the current rent control law has loopholes, and they want the Council to close them in the new version.

  • 12:32:41

    KOJO NNAMDIWhat's next for rent control in the District? And is the policy one of the things fueling the affordable housing crisis? Joining me in studio to discuss this is Randi Marshall, vice-president for Government Affairs at the Apartment and Office Building Association. Thank you for joining us.

  • 12:32:55

    RANDI MARSHALLThank you for having me, Kojo.

  • 12:32:56

    NNAMDIVictoria Goncalves is a bilingual tenant organizer with the Latino Economic Development Corporation. Victoria, thank you for joining us.

  • 12:33:03

    VICTORIA GONCALVESThanks for being here.

  • 12:33:05

    NNAMDIAnd Ally Schweitzer is our -- that is WAMU's -- business and development reporter. She and her colleague Sasha Ann Simons are working on a new project, covering issues of affordability and cost of living in our region. Ally, always a pleasure.

  • 12:33:17

    ALLY SCHWEITZERAlways a pleasure, Kojo. Thank you.

  • 12:33:18

    NNAMDICongratulations on your new birth.

  • 12:33:20

    SCHWEITZERThank you.

  • 12:33:20

    NNAMDIThis is the first time you've been on the air since then.

  • 12:33:21

    SCHWEITZERMy baby's three months old.

  • 12:33:22

    NNAMDIThere you go. (laugh) Ally, exactly how does rent control work in the District? What exactly does it do, and which apartments does it affect?

  • 12:33:29

    SCHWEITZERSo, I think the best way to talk about rent control in the District is really to talk about it as rent stabilization. Let's be clear, it's not a cap on the total amount of rent that can be charged in an apartment building. It is a cap on the increases in rent at certain buildings in the District. So, it's about -- according to the Urban Institute -- roughly 45 percent of multifamily rental units in the city are under rent control. That's a rough estimate.

  • 12:33:54

    SCHWEITZERAnd so, basically, any buildings that are constructed prior to 1976 and are of a certain size. You know, if an owner has four or more units, they are subject to rent control if their buildings are a certain age. It does not apply to new construction. So, just be very clear, I mean, when we talk about rent control, that kind of harkens back to the way that rent control used to work in big cities, like New York City, for example, where you'd have actual ceilings on the amount of rent that could be charged. That is not the way that we should talk about it. Now, it really is about rent stabilization.

  • 12:34:28

    NNAMDIA lot of people have this mental image of rent control, someone who's held onto a great apartment for decades and who's paying little or nothing for it. But it sounds like that's not the whole picture. In the course of your reporting, have you encountered misconceptions about how rent control works?

  • 12:34:43

    SCHWEITZERYeah, I think some folks continue to think that there's this phenomenon of, you know, grandma living in a rent-controlled apartment for 70 years, and her rent's 400 bucks a month. I mean, I think I've heard some anecdotal -- I've heard some stories about, like, along those lines, you know, from landlords over the years. But we don't really know if that's happening on a large scale, because, obviously, we don't have access to everybody's income information in these apartment buildings. We don't know how much money people are making, necessarily. So, it's something that you hear, anecdotally. But for the most part, I just really have no idea how widespread that actually is.

  • 12:35:15

    SCHWEITZERAnd the other thing that is important to note is that while that is possible, you could have somebody sitting in a rent-controlled unit for decades and maintaining a fairly low rent because of that, you also have -- in the District, the way that the rent control law is written, and when that apartment becomes vacant, the landlord can raise the rent. And this is a pretty high-turnover city. We have a lot of folks moving in and out. A lot of landlords take vacancy increases. When somebody moves out, they can raise the rent.

  • 12:35:40

    NNAMDIAs a part of your story, you talked to a woman who was living in a non-rent-controlled apartment and recently had to deal with a huge rent hike. Tell us about Shirley's experience.

  • 12:35:49

    SCHWEITZERSo, I talked to this really fascinating woman named Shirley Tabb, who actually got in touch with me. She emailed me, because I had put out a call on Twitter asking for folks to get in touch with me if they lived in rent-controlled buildings. And she emailed me that day, saying, yeah, me. I just found a unit. I got kicked out of my old one -- not kicked out. She wasn't evicted. She had to leave her two-bedroom on K Street Northwest...

  • 12:36:08

    NNAMDIBecause they jacked the rent up by $800 a month.

  • 12:36:09

    SCHWEITZERThe rent went up 800 bucks. By the way, I was not able to actually confirm that with the landlord. They didn't return my calls. But she, according to Shirley Tabb, $800 was her increase, and she said, no way. You know, she had been paying about 2,100 -- by the way, not a low rent. She then was asked to pay 800 more. She says, I can't do it. She found a rent-controlled apartment, Waterside Towers in Southwest, right by the Wharf Arena Stage. Great location. (laugh)

  • 12:36:34

    NNAMDIMm-hmm, been in that building.

  • 12:36:35

    SCHWEITZERYeah, right. And, you know, she said the rent here is about what it was in my old place, and it's rent-controlled. So, I have a more consistent -- you know, I can expect -- you know, I can plan, financially. You know, this is a person who's middle-income, by the way.

  • 12:36:46

    NNAMDII was about to say, Shirley has a stable, well-paid job. So, is it fair to call rent control an affordable housing policy?

  • 12:36:55

    SCHWEITZERNo, and I think that's really -- I think that's part of the problem in the conversation about rent control, is because it's often talked about as an affordable housing policy. Well, let me tell you, I mean, if we're looking at rent control as an affordable housing policy, it's a pretty bad one. I mean, it's not the right way to think about it, because just because an apartment is rent stabilized does not mean it's cheap or affordable.

  • 12:37:15

    SCHWEITZERI mean, speaking from personal experience, I lived in a rent-controlled building in Georgetown for a couple of years. My husband and I were paying a lot, okay. Let me tell you, wasn't cheap. (laugh) We knew how much the rent could go up, but even when it did go up, it was pretty expensive. So, it's not actually intended to keep rents low, necessarily. It's really just about limiting shocks to individual tenants from year to year when their leases are renewed.

  • 12:37:40

    NNAMDIVictoria, how would you answer the same question? Considering that rent control can benefit people at any income level, would you still consider it an affordable housing policy?

  • 12:37:49

    GONCALVESI think it's complicated, right, like Ally was saying. Just because a building is rent-controlled doesn't mean that it's affordable to everybody. But what rent control is really about, it's about stability. And stability is what helps people create communities. It's what helps people be able to stay in their home, and prevents displacement.

  • 12:38:07

    GONCALVESWhat we want to do by strengthening rent control laws is make sure that we don't have another 20,000 black D.C. residents that are pushed out of the city. This is about displacement, and making sure that we are putting a band aid on, you know, the problem of low-income people being displaced out of the city.

  • 12:38:28

    NNAMDI(overlapping) And when you say we, you're part of the Reclaim Rent Control Campaign. That's who you're speaking on behalf of when you say we. It's advocating for some changes to the current law. Tell us about some of those changes and why you think they're important.

  • 12:38:40

    GONCALVESYeah. So, you know, rent control is a law that was written more than 30 years ago. And the status quo just isn't enough right now. We are happy that the Council is onboard to reauthorize it, but we think that we need to dramatically expand and strengthen rent control. Like Ally was mentioning, there are loopholes in the law that incentivize eviction and incentivize neglect. That is leading to displacement.

  • 12:39:09

    GONCALVESYou know, we've lost 38 percent of rent-controlled housing since the law was passed, so we want to expand rent control to include buildings built before 2005. We want to close those loopholes, like I said. We want to take away the additional 2 percent in addition to inflation that comes with rent control increases. Because, right now, the rent is increasing faster than other things in people's lives.

  • 12:39:35

    NNAMDIWe also want to strike down the exception for buildings with four units or less. Why?

  • 12:39:40

    GONCALVESSo I, for example, live in a four-unit building. There are thousands of tenants in the city that live in four-unit buildings. And, you know, we think that they should have this protection, as well. My rent rose $200 this year, and if that happened again next year, I wouldn't be able to afford to live where I live.

  • 12:40:03

    NNAMDIRandi, you represent the Apartment and Office Building Association. Are there changes to the existing rent control law that you would like to see?

  • 12:40:10

    MARSHALLAbsolutely. Rent control currently in the District, like Ally was saying, really focuses on anti-gouging policies. And what we would really like to see is a push to limit rent control, really. We think it's a failed policy. We'd like to see the Council focus more on housing affordability.

  • 12:40:35

    NNAMDIYou're not saying that you would like to see gouging allowed. Is that what you're saying? (laugh)

  • 12:40:37

    MARSHALLNo, (laugh) anti-gouging.

  • 12:40:41

    NNAMDIOkay.

  • 12:40:42

    MARSHALLYeah, we would like to see the Council focus on affordability. I mean, really, what's happening is you're having low and middle-income renters having to compete with high-income renters for the same rental housing market, And we think that's a larger problem. You're having folks being priced out of housing. And what we would like to see is more funding, more policies that actually have something to do with housing affordability and increasing the housing supply.

  • 12:41:13

    NNAMDIIn addition to that, what are some of the major challenges that your members face, in your view, under the current law?

  • 12:41:19

    MARSHALLYou know, it's really interesting. Many of the things that Victoria was just talking about, talking about an increase in utilities and all the other expenses that any homeowner or any renter actually experience, happen on a larger scale for our large housing providers under rent control. And, you know, you have utilities going up 11 and 12, 15 percent. You have property taxes that are increasing 25, 30, 40 percent. And they have a limitation on what they're able to raise. And so they're having to make these decisions on accounting magic on trying to make sure that these buildings are able to still operate. And so it's much harder to operate a rent-controlled building than a market rate.

  • 12:42:11

    NNAMDIHere is Christian, in Silver Spring, Maryland. Christian, you're on the air. Go ahead, please.

  • 12:42:16

    CHRISTIANHey, Kojo. I'm a big fan. Thanks for having me on. I was wondering if your guests had noticed that, in rent-controlled practices, that did this in any way incentivize landlords to have higher turnover, such as offering leases with shorter amounts or forcing people out so that they could take advantage of...

  • 12:42:39

    NNAMDI(overlapping) Funny you should mention that, because, Ally Schweitzer, some of your reporting dealt with what advocates might call loopholes in the law, provisions that they say allow landlords to get around rent-control protections. One of those provisions deals with voluntary agreements. What the heck are those?

  • 12:42:55

    SCHWEITZERYeah, this is really interesting. So, I had heard about voluntary agreements in a very different context before, but then talking to folks like Victoria, I learned more about how some of these voluntary agreements can be used. So, essentially, D.C.'s law allows a landlord to say, hey, tenants, I want to raise your rent because I want to put in, say, a nice new laundry room or our new gym or something. But I've got to raise your rent to do that. Can I get a majority of tenants in this building to agree to a rent increase in order to fund, you know, certain repairs, renovations, things like that.

  • 12:43:22

    SCHWEITZERIt's supposed to be a way of negotiating with your tenants, if you're a landlord. You know, say, look, I'm going to raise the rent but in exchange you're going to get this. So, it's supposed to be that type of agreement. The way that I've heard that -- and I heard this from the Legal Aid Society, I heard this from Victoria -- is the way that some landlords are using these is really creative, right. They're basically saying to tenants, look, I don't want to raise the rent on you. I don't want current tenants to have to pay more, but I do want my future tenants to have to pay more.

  • 12:43:51

    SCHWEITZERAnd, you know, so, how about you sign this voluntary agreement agreeing to raise the rent on people who are not you, (laugh) people who are going to move in after you. And tenants kind of look at that and say, well, I have no intention of moving so, sure. I'll sign that agreement. What's the big deal? So, the Legal Aid Society has found that the tenants are agreeing to basically up-charge future tenants at rates much higher than they would probably agree to if they had skin in that particular game.

  • 12:44:20

    NNAMDIOn the assumption that they're not going anyplace.

  • 12:44:21

    SCHWEITZERThat they're not going anywhere, but then, according to Victoria -- and she can speak more to this -- is that that then incentivizes the landlord to find any number of ways to kind of push those tenants out in order to -- because now they have this rent increase locked in for the future. So, this is a loophole with the volunteer agreements.

  • 12:44:38

    NNAMDIVictoria?

  • 12:44:39

    GONCALVESYeah. So, I'm glad you mentioned the Legal Aid Society. Their research found that the average voluntary agreement rent increase was $1,500. So, you know, no tenant would agree to raise their own by $1,500. But if a landlord knows that if I get this person out, the next person will start paying $1,500 more a month. That is absolutely an incentive that they have to evict that person by any -- you know, they find a lot of creative ways to evict people.

  • 12:45:09

    GONCALVESAnd one of them is through neglect. We see that in buildings where a voluntary agreement happened. The newer tenants will have brand-new apartments. They'll have, you know, completely renovated units. And those newer tenants are usually whiter, wealthier and younger. And the older tenants who are paying the lower rent have units that are falling apart. And the landlord ignores their requests to make repairs.

  • 12:45:33

    NNAMDIRandi Marshall, is the Apartment and Office Building Association in support of maintaining voluntary agreements?

  • 12:45:40

    MARSHALLYeah. You know, voluntary agreements are actually -- they're outlined -- their statutory process is outlined. Like Ally was talking about, it allows for housing providers and tenants to negotiate what type of upgrades. So, not only to units, but we're talking about upgrades to building-wide systems. Building-wide systems account for about 80 percent of redevelopment costs for buildings. And one of the ways that we can make sure that the operation of the building is maintained is subsidizing these lower rents for legacy tenants with higher rents for vacant units that actually come onboard. It allows for folks who have limited incomes who've been able to benefit from these lower rents to stay in place. And we think that that's important.

  • 12:46:37

    NNAMDIAre you at all concerned that that provision could nevertheless be exploited as a way around rent control?

  • 12:46:43

    MARSHALLYou know, the funny thing is, me and Victoria actually know each other. We've been working pretty closely together, tenant advocates with AOPA other housing providers discussing maybe some of the concerns, bad actors that participate in the voluntary agreement scheme. But, ultimately, we see it as a valuable tool.

  • 12:47:05

    MARSHALLThere's about 20 voluntary agreements that are actually filed a year, so this is not something that is widely used. This is not some sort of a tool that is being aggressively abused. This is an actual tool that is actually government reviewed and government approved. The Rental Housing Commission has to approve these proposals. So, you know, there's a process to this, but, you know, I am in agreement that, you know, there are always ways that we can tighten up the regs.

  • 12:47:35

    NNAMDIHere's Starr in Washington, D.C. to talk about her personal experience. Starr, your turn.

  • 12:47:39

    STARRThank you very much for taking my call. I'm a senior. I've lived in my apartment complex for over 20 years in the Mount Pleasant area. It's very diverse, ethnically. It's been low-to-moderate incomes.

  • 12:47:54

    NNAMDI(overlapping) Is it rent controlled?

  • 12:47:55

    STARRYes, but we are seeing many of the ways that your guests are describing of the landlords finding loopholes. One thing that they do has already been mentioned, and that is that for older tenants, they don't give us any upkeep, because when younger people who are more solvent -- and white, often -- move in, they can charge them higher rent, so they give them renovated apartments.

  • 12:48:23

    NNAMDISo, what's the purpose of not up-keeping the apartments of older residents?

  • 12:48:27

    STARRYes, in order to drive us out, so that -- because they can always charge the new people more. But there's another aspect of this that has to do with racism. If the people moving in, the new tenants these days, if they are people of color, what the landlords do is almost immediately stop giving them any kind of upkeep. They'll move into a renovated apartment. They often have young children. If they have complaints about mold, which is common, the mold is not eradicated. It's simply painted over.

  • 12:48:57

    NNAMDI(overlapping) I interrupt you only because we're running out of time very rapidly. But it underscores the argument, I guess, that Victoria Goncalves was making about what happens with some landlords. And I'm pretty sure that Randi's going to say that that's not necessarily all or how the majority of landlords in the city operate.

  • 12:49:14

    MARSHALLAbsolutely.

  • 12:49:15

    NNAMDIAnd I need to move on, because, Ally, beyond the particulars of the rent control law, there's also a philosophical debate about whether or not rent control can be damaging to the overall goal of greater affordability. What does the research indicate about whether or not rent control has an effect on developers building more units?

  • 12:49:32

    SCHWEITZERYeah, this is one of the main economic arguments against rent control, and that is essentially research out of Stanford University has indicated that it could have a dampening effect on housing construction. Say, if rent control is expanded to apply to new housing stock, as opposed to older construction, it could disincentivize developers from building more housing. And, of course, that's a huge problem when we're looking at a housing market that, right now, is really suffering from a lack of supply.

  • 12:49:58

    SCHWEITZERHowever, this doesn't really apply here, necessarily, because rent control really only does apply to old construction. And according to the Urban Institute, there was some empirical work that was done in the District that didn't really show much of a relationship between rent control and construction. In fact, I think that probably a bigger disincentive to new construction is resistance to development in the D.C. area and appeals through the D.C. Court of Appeals. And that's the kind of thing that the comprehensive plan amendments this week are supposed to address. So, I don't necessarily think that that argument that it dampens housing construction is really applicable to the Washington region.

  • 12:50:35

    NNAMDII was about to say, what's next for the Council on rent control?

  • 12:50:40

    SCHWEITZERSo, Anita Bonds introduced a bill that would reauthorize rent control through 2030. Currently, it's set to expire at the end of next year. It's almost guaranteed to pass. It would be probably not very politically prudent for members of the Council to shoot down an extent to rent control, because we're talking about something like a 68,000 estimated housing units that are under rent control currently. That's a lot of voters. (laugh)

  • 12:51:03

    NNAMDIAnd that's a lot of time that we used up there, because now we have no more. We'll just have to see how this plays out. Ally Schweitzer is WAMU's business and development reporter. Ally, always a pleasure. Thank you for joining us.

  • 12:51:15

    SCHWEITZERAlways a pleasure. Thank you.

  • 12:51:15

    NNAMDIVictoria Goncalves is a bilingual tenant organizer with the Latino Economic Development Corporation. Victoria, thank you for joining us.

  • 12:51:22

    GONCALVESThank you for having me.

  • 12:51:23

    NNAMDIAnd Randi Marshall is the vice president for government affairs at the Apartment and Office Building Association. Randi Marshall, thank you for joining us.

  • 12:51:30

    MARSHALLThank you.

  • 12:51:30

    NNAMDIThis conversation about rent control in D.C. was produced by Margaret Barthel. And our Virginia election series was produced by Cydney Grannan. Coming up tomorrow, we'll find out how community land trusts are being used as a tool against gentrification. And it's a big week for professional sports in the city -- except for one team, that is. The Mystics and others are doing well. We'll have the latest on D.C.'s sports moment. That all starts tomorrow, at noon. Until then, thank you for listening. I'm Kojo Nnamdi.

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