During a marathon public hearing on the city's rent control law, a D.C. Council member asked a real estate executive an important question: "What are you looking for that would get you to put money into new apartment construction and renovation?"
"Send us a signal," the man answered, "to show us that you want us to invest in it."
There are many who are applauding last week's rent control referendum vote because they think that dismantling the rent control law passed by the City Council last spring will mean that the interests of poor and elderly tenants have been protected. Unfortunately, that really is not the case. The vote sent the wrong signal to those who might have been encouraged to improve the city's rental housing situation.
One cannot simply remove important parts of a comprehensive law and expect it to work smoothly.
Take the case of apartment buildings that are nearly vacant and, as such, generating little revenue to warrant keeping them open. The law would have meant that such buildings could have been removed from rent control. Landlords would have had to find decent alternative housing for the remaining tenants and pay their moving costs, but they could then have renovated the buildings, charging higher rents. Other rental units would have been freed up.
Since that provision has been removed by the rent control referendum vote, there are no incentives. Such buildings will probably be closed. The displaced tenants will have to look on their own. They might put their names on the waiting list for public housing, knowing that about 13,000 names are already on it.
Or take the case of dilapidated apartment buildings, the kind landlords shut down because it would take more money than they can charge under rent control to raise the quality of the place to a decent level. Under the law passed last spring, landlords would have been spared some costs, in tax liens or through the waiving of fees. That just might have encouraged them to keep those buildings open and not displace tenants. Without that provision in the law, there is again no incentive to do that, and maybe the number of boarded up apartment buildings will creep even higher.
And what about that $15 million tenant rent-subsidy plan? Yes, that is still in the law, but without the kind of stimulation that would encourage landlords to renovate, reopen buildings and perhaps even build a few new ones, the $15 million figure might be much too high. That is, according to some predictions, which suggest that there may not even be enough rental properties available to qualify to use the funds.
To us, it sounds as if there is very little reason to celebrate. Unfortunately, the tenants will learn that the hard way.