By Lori Montgomery
Washington Post Staff Writer
Wednesday, June 28, 2006

D.C. Mayor Anthony A. Williams signed legislation yesterday to bar most landlords in the District from raising rents by more than 10 percent a year, the first major revision of the rent-control laws in more than two decades.

Under the new law, landlords of rent-controlled buildings will be permitted to raise rents only once a year, with most units limited to an increase of 2 percent plus inflation, or no more than 10 percent. The law contains new protections for the elderly and disabled, limiting their annual rent increases to the rate of inflation, or no more than 5 percent. And it will limit one-time increases for vacant units to 30 percent of the rent paid by the previous tenant.

Williams (D) said the measure will preserve the affordability of thousands of rent-controlled houses and apartments at a time when the cost of housing in the District is rising rapidly.

"We have arrived at a rent control reform package that is easy to administer and understand, that protects tenants from abuse . . . [and] will have a profound impact on thousands of District residents," Williams said. "We all talk about affordable housing. But the greatest mileage is not producing new housing; it's preserving affordability."

The rent control bill was one of two measures Williams signed yesterday in his ceremonial office at the John A. Wilson Building. The other allows the city to move forward on construction of a $550 million headquarters hotel on Ninth Street NW adjacent to the new Washington Convention Center.

That bill authorizes the city to acquire the land and lease it to Marriott International, which will build and operate the 1,434-room hotel. It also authorizes the Washington Convention Center Authority to issue as much as $187 million in public bonds to cover the city's share of the project costs and to repay the bonds with property and sales taxes generated by the new development.

Williams said the hotel, slated for completion in 2010, will generate an estimated 1,270 permanent jobs, 1,805 temporary and construction jobs and as much as $44 million in annual revenue.

The hotel financing package has been one of Williams's top priorities for his final year in office. After two terms, the mayor is retiring in January. But the rent control measure took top billing yesterday, as advocates for both tenants and landlords celebrated a hard-won compromise that significantly alters a system tenant advocate David Conn described as "the third rail of D.C. politics."

The District's rent control law, enacted in 1975 and later amended, covers about 100,000 of the city's rental units. Federally funded public housing projects are exempt, as are approximately 40,000 privately owned rental units in buildings constructed after 1975 or owned by landlords who have fewer than five units.

The new law abolishes the city's rent-ceiling system, which capped rents based on complicated tabulations of the city's Rental Housing Commission. The ceilings are typically set far higher than the market will bear, rendering them meaningless. The primary author of the new law, D.C. Council member Jim Graham (D-Ward 1), has cited the example of a constituent who pays $1,200 a month for a studio apartment that carries a rent ceiling of $4,400.

Graham said the old system was particularly ineffective at controlling rents when units changed hands. A city survey of eight buildings found that they "were being transformed from affordable buildings to luxury buildings" because the old law contained "an enormous opportunity to escalate the rents" when a unit became vacant, Graham said.

Under the new law, rent increases on vacant units will be limited to 10 percent of the previous rent or to the amount charged for an identical unit in the same building, as long as the increase does not exceed 30 percent. Moreover, all rent increases will be based on a percentage of current rent, dramatically simplifying the process and eliminating the need for a cumbersome bureaucracy that now employs 22 city workers.