What Conrad Cafritz feared in his May 19 article on "The Benefits of Going Condo" has now come to pass: a moratorium on condominium conversion in the District of Columbia.
"Local legislators," he objects, "need more creative responses that simplistic and probably unlawful blanket moratoriums." He's right.
The present moratorium is only a temporary expedient, and would indeed be unlawful if extended indefinitely. Its purpose is to provide a period of calm during which real-estate interests, elderly and tenant representatives, city council members, the housing department and the mayor's office can hammer out a workable, imaginative, balanced approach to the conversion dilemma. The moratorium bill has included creation of an 11-member study commission to do just that.
The commission's task will be arduous, for the issues are genuinely complex. The tumult of conversion was born of soaring inflation, scarcity of urban land, the move back to the cities, decreasing household size, expanded tenant rights, the rising cost of construction and rent control.
The benefits of conversion are indeed as Mr. Cafritz clearly set out - rehabilitation of older but substantial buildings, the opportunity for a new, flexible form of home ownership, and the very welcome increase in property-tax revenue for the city.
Where Mr. Cafritz's argument founders is regarding the costs of conversion. He recognizes that many senior citizens and other tenants experience "the shock of displacement - both psychic and economic" upon moving from converted buildings. He recognizes that many of these citizens are on fixed incomes that limit their flexibility to move. He thus concludes that "the focus of city leaders should be on this constituency" and decries a "shotgun approach," which he predicts would only harm everybody.
Correction: One focus should be on this constituency - on designing ways to help them move, help them buy if they wish, help them stay where they are as renters in specific circumstances.
But a second cost of conversion - perhaps more threatening to the city as a whole - is its erosion of the rental market.
In 1977, there were an estimated 178,000 nonvacant rental units in the District. From 1977 to the present, 4,709 units have been approved for conversion; applications for conversion of 1,164 units are in the 60-day review period by the D.C. Department of Housing and Community Development; 10,520 units are subject to an approved Certificate of Eligiblity, which has not yet been submitted for registration; and applications for 6,832 more units are pending. Thus, not including any of the units converted before 1977, some 13 percent of the District's rental housing stock has been lost to - or is subject to - condominium conversion.
These figures are frightening in two respects. First, Washington is a transient place, a city of renters - and necessarily so as people filter in and out of government, academic and military assignments. Perhaps even more than Chicago or San Francisco, the city needs a healthy rental market.
Second, switching units from rental to home ownership increases the cost - without increasing the ability of city residents to pay. HUD reported in 1975 that monthly payments in converted units generally ran 30 to 35 percent higher than previous rents. The figure has undoubtedly skyrocketed since then. Preserving the rental market is important because it is the last vestige of low- and moderate-cost housing.
Changing rental units into ownership stock in turn changes the profile of city dwellers. Many elderly people, young families, single-parent households, students, foreigners and minority residents simply cannot afford to purchase a condo unit at the going rates. Conversions result in a more homogeneous, more affluent population. The city - and its neighborhoods - loses some of its diversity, some of its life.
These are factors that Conrad Cafritz ignores. The real-estate community must face them. Nonetheless, real-estate businessmen can hardly be expected to come forward and help the city to preserve its rental stock for the public good. They have made investments. Many have made profits through conversion while a few have suffered losses because of rent control. Their situation, their energies and their capital must be taken into account in reaching a constructive solutions. The tenant community must face this.
Ultimately, perhaps all participants in the conversion process want the same thing: a vigorous housing market in the District of Columbia with opportunities for safe, decent, variably priced housing for all. The road to that end is a tough one, but one that the yet-to-be-appointed commission on condominium conversion must traverse with patience, perspective and reason in the coming 90 days.