A D.C. Superior Court judge ruled last week that the city's controversial law limiting the conversion of rental housing to condominiums and cooperatives is constitutional.
In a case involving The Savoy, a 220-unit property at 1101 New Hampshire Ave. NW, Judge John F. Doyle rejected a claim that the law's requirement for a tenant vote on conversion was an unconstitutional delegation of government authority to renters.
"This was the most serious challenge they the owners could mount, and they didn't make it," said Lynne Bernabei, an attorney who had tried to intervene in the case on behalf of a number of D.C. tenant groups. "The delegation issue was the strongest argument they had, and the judge threw it out."
Tenant advocates view last week's court decision as a boost to their chances for securing an extention of the existing renter protections. "This was the most serious challenge they had, and it was in a court that had an interest in jurisdiction in deciding the case," said Bernabei. "The decision demonstrates the law is constitutional. This is very good for those who are pushing for renewal of the legislation."
Trustees for The Savoy owners had filed the suit in May 1981, challenging the Rental Housing Conversion and Sales Act of 1980. In his decision last week, Judge Doyle upheld not only the election provision of the law but all its other major provisions as well.
The Savoy trustees have not yet announced if they will appeal the decision.
Besides the resident-vote requirement, the law provides guaranteed tenancy in converted properties for persons 62 years and older whose annual income is $30,000 or less. The statute also gives the tenant association in a building the right to organize and purchase the property.
Before a rental building can be converted to a condominium or a cooperative, a majority of "eligible tenants" must approve. Elderly rentors with guaranteed tenancy are excluded from taking part in the conversion vote.
Since the current law went into effect in August 1980, there have been 61 conversion elections. In all but five of those cases, tenant groups have voted in favor of conversion, according to the D.C. Department of Housing and Community Development. Forty-six of those involved condominiums; 10 of them were co-ops.
The decision in the Savoy case was the latest in a series of legal challenges to D.C. legislation limiting the conversion of rental properties. Two similar to the Savoy case are pending in D.C. Superior Court, and another is before the U.S. Court of Appeals.
D.C.'s first emergency legislation imposing controls on conversions was passed by the City Council in 1976, primarily in response to the large number of condominium conversions then going on. Between 1970 and 1979, the Washington area had the highest proportion of its rental housing--7.73 percent--converted to condos and co-ops of 37 major metropolitan regions surveyed by the U.S. Department of Housing and Urban Development. In 1979 and 1980 alone, nearly 9,000 D.C. rental units were converted to condos.
With the imposition of the new law and with the sharp drop in the demand for condo units because of increasing prices and higher interest rates, the number of conversions dropped to 2,199 in 1981 and to 758 in 1982.
Local and federal courts only once have upheld the challenge to any of D.C.'s conversion controls. In 1979, the D.C. Superior Court ruled that the City Council had acted improperly by repeatedly using its emergency legislation authority to extend the 90-day conversion moratorium originally imposed in 1976. In December 1980, the Superior Court decided, however, that the ruling would be applied only prospectively and not retrospectively, thus blocking the conversion of large numbers of properties with pending certificates of eligibility to convert.
Federal courts so far have refused to rule on the constitutionality of the D.C. legislation. Property owners "are doing this in a scatter-shot way," commented Bernabei. "They're looking for a way to challenge the law and maybe find a judge who likes their arguments.
"They have much less chance in federal court because it's a local issue."
The current legislation expires this September. Within the next week or two, Councilman John A. Wilson plans to introduce "basically the same law," according Brigid Quinn, his executive assistant.