The latest version of the District's rent control law, which has aroused strong emotions among tenants and landlords and could change the face of neighborhoods, will be submitted for voter review Nov. 5 in the first referendum held under D.C. election law.
The referendum, which seeks to overturn four provisions of the rent law enacted in April, has sparked a bitter clash between a newly formed grass-roots tenants coalition that favors keeping broad controls on rental property and a group of the city's most entrenched and well-financed landlords and real estate interests, who have lobbied vigorously for revisions in the law to begin lifting controls.
The campaign has begun in earnest with fund-raising events, distributing leaflets at apartment buildings, and debates at neighborhood forums. But it has potentially broader political implications beyond Nov. 5 because tenants are vowing to build a movement to unseat the City Council members who voted for rent control exemptions.
"We think rent control is like water conservation. You need rent control to conserve the supply of affordable housing, the same way you need water controls to save water," said Gottlieb Simon, a spokesman for the Emergency Committee to Save Rental Housing, the chief advocates of the referendum. "Taking off water controls in the midst of a drought doesn't preserve water, it leads to disaster."
But landlords see the issue as far more complicated, and they question the wisdom of proponents asking voters to change legislation approved by the City Council.
"The issue is: Do we really want a government by referendum?" said Donald R. Slatton, executive vice president of the Apartment and Office Building Association of Metropolitan Washington. "Why don't we invite voters once a month to RFK Stadium and give them a red card and a green card, and they just hold up cards to vote?"
Until recently, rent control, which has existed for 14 years, had been considered politically untouchable in a city where roughly two of every three residents are tenants and where a liberal Democratic majority controlled the City Council. When the old rent control law was about to expire in April, council chairman David A. Clarke led the fight to extend and maintain broad controls over the city's 120,000 rent-controlled dwellings.
But in adopting a 6 1/2-year extension of the rent control law, a bare seven-member majority of the 13-member council voted to enact new "exemptions" that would remove controls for several categories of housing after current tenants vacate.
The exemptions, which were sought by the real estate industry, would cover an estimated 7,000 to 10,000 units, primarily single-family rentals, "distressed" property and partially abandoned buildings.
Adoption of those four provisions triggered an unusual counterattack by tenants, who gathered enough signatures of registered voters to force the referendum on the ballot. If voters approve the referendum, the four exemptions to the new rent control law will be knocked out.
Regardless of the outcome of the vote, however, rent control will remain in effect in the District. The question for voters boils down to how many apartments are to remain covered and how long the controls will last, because under one of the exemptions the city could begin lifting all rent controls on vacant units starting in 1989.
If controls are weakened by exempting certain dwellings as they become vacant, then many low- and moderate-income tenants will be displaced by landlords seeking higher profits by renting to more up-scale residents, according to referendum supporters who gathered 18,000 signatures within 30 days to get on the ballot.
But landlords contend that the already tight rental housing supply would be depleted without these exemptions. Unless controls are lifted, landlords say, they will not have sufficient income to maintain and refurbish many distressed properties.
Landlords argue that the referendum is a dangerous, piecemeal approach to enacting housing policy.
"The council spent four months, heard 200 witnesses and discussed this as exhaustively as it could be discussed," Slatton said. "They went through the democratic process . . . . It ought to be given a chance to work, or you might as well do away with the City Council."
Many tenants are angry at Mayor Marion Barry, who, while not actively campaigning against the referendum, has said he opposes "governing by referendum" -- the position articulated by the real estate industry.
"The mayor did sign this legislation that they are trying to overturn," said Annette Samuels, the mayor's press secretary. "The mayor has said he has serious concerns about governing by referendum."
Landlords contend that passing the referendum would hurt tenants because keeping rent controls on certain properties prevents landlords from collecting enough rent to refurbish and keep those units on the rental market. "Tenants backing this are extraordinarily naive if they think units are ever going to be renovated" while rent controls limit landlord income, said Thomas Borger, spokesman for the Washington Board of Realtors.
Supporters of broad rent control say it is crucial to maintaining affordable housing and thereby to maintaining the ethnic and racial diversity of Washington neighborhoods. Referendum opponents who favor keeping the exemptions argue that rent control has discouraged new construction and contributed to the abandonment of housing by landlords who received inadequate returns.
The November election will mark the first time that disgruntled residents have succeeded in calling a referendum to determine whether a law passed by the City Council should be changed or nullified. A referendum is different from an initiative, in which voters are asked to approve a new measure or proposal, such as the one that led to the creation of the D.C. Lottery, or to approve a nonbinding resolution, such as the successful one that said the city should provide shelter to the homeless. In all, there have been 17 such initiatives on ballots in the District.
Rent control applies to most of the city's 159,000 occupied rental units, with only those units owned by government or by landlords with four or fewer units exempted.
Under controls, annual rent increases for occupied units are limited under a formula linked to the consumer price index. In the past four years those increases ranged from 4.2 percent to 10 percent, with the most recent rise 4.4 percent in May. Landlords claiming financial hardships, however, can receive larger increases through the D.C. Rental Accommodations Office, although many landlords complain that the process is so cumbersome and time consuming that few ever receive the extra increases.
For a vacant unit, rent control previously limited rent increases to 10 percent, but the council raised that to 12 percent when it extended the rent control law.
The controversy focuses primarily on the "vacancy decontrols" that lift controls when apartments are vacant. The provisions in the new law that are being challenged by referendum are:
*Single-family homes owned by four or fewer persons, rather than corporations, would be exempted from controls once they are vacated.
*Buildings that were at least 80 percent vacant as of April 30 would be exempted from controls on a case-by-case basis at the owner's request, provided that tenants are properly relocated.
*Buildings that are declared "distressed" properties could be decontrolled under a new city program in which landlords could receive tax breaks, loans and grants to restore them.
*Starting in 1989, all rental units would be exempted from controls as they become vacant, but only if the city's rental vacancy rate is 6 percent or more, and only if a newly authorized rent subsidy program of up to $15 million is operating to assist low-income tenants. The most recent vacancy figure was about 2.4 percent, according to the Washington area office of the U.S. Department of Housing and Urban Development.
Referendum supporters maintain that if single-family units are exempted, large families will have a more difficult time finding affordable rentals. They say that landlords who own partially abandoned and distressed properties do not need decontrol because they can already apply for hardship exemptions and for various forms of tax abatements and government aid. Lifting controls, referendum supporters say, would threaten tenants while helping landlords who seek to convert properties to luxury buildings.
Although the numbers seemingly favor tenants, referendum supporters are optimistic that they will prevail, according to Valerie Costelloe, a self-employed accountant who has been active in organizing fellow senior citizens at her Connecticut Avenue apartment building and elsewhere.
But in an off-year election with only school board posts at issue, tenant groups will emphasize a strong get-out-the-vote effort to make sure they are not caught off guard, she said.
"We are organizing new tenant associations, and tenants are learning that they have a place in this city but they have to fight to stay here."