The D.C. City Council voted last night to permit landlords to raise rents to cover the fast-rising cost of fuel oil they must buy to supply heat to tenants.
The council also voted to set a permanent 15 percent limit on real estate mortgages and most other loans in the city.
The rent increase was proposed by Mayor Marion Barry, who warned that "many owners of rental housing will be unable to absorb . . . extraordinary price rises and purchase enough fuel" this winter with the rentals that they are now collecting.
The proposal was opposed bitterly by a group of organized tenants, who lobbied vigorously against its passage. Spokeswoman Evelyn Onwuachi contented at a news conference that it would increase already exorbitant profits for "those with wealth and property."
Under the measure, which was adopted by a vote of 11 to 2 under emergency procedures and will go into effect as soon as it is signed by Barry, landlords will be able to raise rents based upon a formula reflecting the percentage rise in heating costs as a part of the total operating costs of apartments buildings.
The D.C. Rental Accommodations Office estimated that a typical low-rent apartment dweller paying $238 a month would face a rise of $12.66. The first increases probably would come on or after Jan. 1.
However, money received under the increase would be subtracted from the across-the-board citywide rent increase scheduled for next spring under the city rent control law.
Raymond J. Howar, president of the Washington Board of Realtors, said he was disappointed by the council vote because the measure did not go far enough. Housing industry leaders supported amendments offered by Betty Ann Kane (D-At Large) and Willie J. Hardy (D-Ward 7) that would have permitted landlords to recover the full dollar cost of increased oil prices. The amendments were rejected by a council majority.
Only council members Hilda Mason (Statehood-At Large) and Wilhelmina J. Rolark (D-Ward 8) opposed passage of the bill.
Debate lasted two hours and was somethims angry, with council chairman Arrington Dixon sometimes pounding his gavel seeking order. At one point, he threatened to eject about two dozen tenants in the audience who loudly applauded supporters of their views.
The vote on the 15 percent interest rate was preliminary, and is subject to a final council vote, possibly Nov. 6. It was approved last night by an apparently unanimous voice vote, making final approval almost certain.
Until earlier this year, when interest rates began a swift rise, the limit on home loans in D.C. was 11 percent. In June, with loan money becoming unavailable, the council aopted emergency legislation removing the limit entirely for 90 days. Last month, it adopted another 90-day emergency law setting the limit at the same 15 percent approved last night.
The new legislation keeping the 15 percent limit permanently is subject to a review by Congress, which never has overturned an act by the Council since home rule began in 1975.
In adopting the ceiling last night, the Council rejected by a vote of 11 to 2 a proposal by Kane that no ceiling be imposed. She argued that interest rates are beyond local control. In the vote she was joined only by Dixon.
John A. Wilson (D-Ward 2), chairman of the Council's Finance and Revenue Committee, and sponsor of the bill, argued to set the 15 percent limit, saying any higher figure would be a hardship for home buyers. David A. Clarke (D-Ward 1) said the Council should take a stand for holding the line on interest rates to demonstrate local policy and determination.
Wilson said a survey taken Oct. 19 showed that interest rates in the city ranged from 11 1/2 to 13 5/8 percent.
There currently is no limit on mortgage interest rates in either Maryland or Virginia, and spokesmen for mortgage lenders testified at a hearing last month that the District of Columbia should follow the example of the neighboring states.
At the same hearing, a spokesman for Mayor Barry urged that the old 11 percentage interest rate be increased, but called for setting a specific -- although unstated -- higher rater.
The new legislation sets a 15 percent limit on a variety of commerical and installment loans that currently have a variety of interest rates.