Tenants of the 40-year-old, 474-unit Benning Heights apartments in Southeast have purchased their low-rise development for $2.5 million and plan to convert it to cooperative ownership for tenants.
The 20-building complex, located off Benning Road south of East Capitol Street, is scheduled to become a low-yield cooperative in which each member will purchase a share for $1,000.
Individual monthly costs will vary according to the size of the apartment. Rents currently range from $193 to $311, and the goal is to keep monthly payments in a range of no more than 120 percent of the rentals.
Members of the new co-op will have the right to occupy and apartment, with the stipulatd resale value increasing only 10 percent plus the value of improvements to keep the units in the low- and moderate-income range.
When the owners of Benning Heights, Joseph Smith and Jack Dudley, indicated that they wanted to convert the complex a year ago, tenants were given the right of first refusal, according to District law. A tenant association, now headed by Robert Simon, was organized and efforts began for the purchase, which Simon said was aided by the sellers.
The National Consumer Cooperative Bank is providing the $2 million in acquisition money for the tenants and the owners are taking back a mortgage of $500,000. Closing costs are being funded by the District's department of housing and community development.
Simon said the tenants plan to rehabilitate the buildings over the next two years in a $2 million program to be funded equally by the Co-op Bank and the District. A long-term financing commitment has been obtained from Aetna Life Insurance Co.
Zuniga and Associates arranged financing and the Environmental Design Group is the architect for the project. The Metropolitan Washington Planning & Housing Association is consultant on the tenant ownership program. Two attorneys with the law firm of Garfinkle & Dranitzke represent the tenants.
Simon said that the apartments are attractive and well-maintained and located in an area where there has been a minimum of speculation-induced appeciation of values. The site is also near a Metro station.
"Most of the people, many of whom have lived here a long time, could not afford to buy a condominium," said Simon. "We've worked long and hard together to buy these apartments ourselves so that the greatest number of interested tenants could stay."
The Benning Heights Cooperative will be the second tenant-sponsored, low-yield co-op in Southeast. The first is the People's Cooperative on Elvans Road SE, established in 1979. Simon said that tenants in the Bass Circle apartments at Bass Road and B Street SE are also working on the purchase of the buildings in which they are now tenants.