District voters by a narrow margin approved a referendum yesterday eliminating key sections of the city's newly revised rent control and restoring tighter controls over rental housing.
Referendum 001, the first referendum placed on a ballot under the city's election law, was approved by a margin of 50.8 percent to 49.1 percent, according to complete but unofficial returns. With more than 44,000 votes counted, 722 votes separated the two sides.
However, election officials said that there were at least 760 absentee ballots yet to be counted and a number of challenged ballots, which prompted City Council member Betty Ann Kane (D-At Large) to predict that a recount will be sought.
Gottlieb Simon, chairman of the committee that placed the referendum on the ballot, attributed the closeness of the election to what he described as confusion generated by opponents in the real estate industry.
"They industry officials almost stole it," he said. "It was clear to everybody we talked to outside the polling places today they voters wanted to keep as many units under rent control as possible but the misleading statements and campaign literature calculated to confuse people caused many people to vote against their intentions."
City Council member John Ray (D-At Large), an opponent of the referendum, disputed Simon's charge and said it was the referendum supporters who had misled the public.
"The pro referendum people said this was a vote for rent control. That clearly was not the case," said Ray, who noted that the vote was "much closer than I thought it would be."
Mayor Marion Barry, who led the opposition to the referendum, said the closeness of the election will discourage others from seeking to change city law through initiatives and referendums in the future.
Many voters and workers at the polls said there was widespread confusion about the referendum issue and how it would affect housing in the city. D.C. board of elections officials at one time predicted that the referendum would boost the turnout for the off-year school board election, but yesterday some poll workers contended that uncertainty about the referendum actually kept some voters away.
"People don't understand it. That's what we've been hearing all day," said Enez Martin, a poll worker at the Langdon School, 20th and Franklin streets NE, in Ward 5. "There has been too little information about it."
The referendum was placed on the ballot after a successful petition drive by a coalition of tenants, labor leaders and community activists. The ensuing campaign produced a sharp division among the city's clergy and nearly an even split among elected officials.
Supporters included council Chairman David A. Clarke and council members Frank Smith (D-Ward 1), John Wilson (D-Ward 2), Polly Shackleton (D-Ward 3), Wilhelmina J. Rolark (D-Ward 8) and Hilda Mason (Statehood-At Large).
The city's real estate industry quietly put up about $20,000 to bankroll the drive to defeat the referendum, after failing in an effort to keep the measure off the ballot. A coalition of ministers joined Barry, City Council member John Ray (D-At Large) and several other council members late in the campaign to speak out against the referendum.
Both sides agreed there was a need to find a way to generate development of more low- and moderate-income housing for District residents, but differed on whether the referendum would help or hurt.
Referendum proponents favored reinstating several controls over rental properties that had been removed when the City Council passed a new rent control law in April. Opponents of the referendum contended removal of those rent controls was needed to provide incentives to builders and landlords to expand the stock of rental housing.
The referendum provided for the elimination of rent control exemptions in the new law for properties in four categories:
*Single-family homes owned by fewer than five persons. These are exempted from controls once they become vacant.
*Buildings that were at least 80 percent vacant as of April 30, 1985. These are exempted from controls at the owner's request, provided that tenants are properly relocated.
*Buildings that are declared "distressed" properties. These can be decontrolled under a program that allows landlords tax breaks, loans and grants to restore them.
*All rental units vacated after April 29, 1989. These are exempted from controls as they become vacant, but only if the city's rental vacancy rate is 6 percent or more and if a rent subsidy program of up to $15 million is funded.