D.C. City Council Chairman David A. Clarke, who is leading the fight to preserve rent control, has come up with a list of sales of vacant apartment buildings, which he says shows that rent control is not choking off new investment in rental housing.
Clarke's assertions have been largely overlooked in the outpouring of testimony at recent public hearings, but this week they touched off a scramble among the city's real estate establishment to refute the claims.
The point may be pivotal to the current debate because city landlords and developers have steadfastly maintained that rent control is fostering the decline and abandonment of rental housing in the District.
Most of the 5,000 abandoned units in the city, they contend, were occupied by low- and moderate-income tenants until their cash-strapped landlords, overburdened by rent control, were forced to bail out.
The argument is one of the more persuasive in the anti-rent control arsenal, and opponents have used it to spearhead their campaign against the law.
But Clarke produced a list of 29 vacant apartment buildings that he said had changed hands just during December and January alone.
In at least one instance, he said, a vacant apartment building at 1708 Newton St. NW -- the same street on which he lives -- was "flipped" by an investor, who bought it for $149,107 and sold it shortly afterward for $233,035.
The spate of activity, he said, suggests that investors are turning to vacant apartment buildings as investments for reasons that have nothing to do with rent control.
"For a long time the boom was in office buildings and in fact that has changed. We now have a glut," he said. Interest rates, "a greater inhibiting factor," also have come down, "apparently creating movement in that direction," as well.
In any case, Clarke said the trend, "disputes the argument that nothing is happening in vacant properties.
"Rent control is not an absolute impediment" to rental housing investment, he asserted.
The broadside appears to have caught the industry by surprise.
Richard Harps, president of the Washington Board of Realtors, said this week his organization was analyzing the Clarke's list to "figure out what's going on."
Donald Slatton, executive vice president of the Apartment and Office Building Association of Washington, said his group also was studying the data.
"What I can tell you is this, we represent the vast majority of building owners in D.C. and our people are not engaging in the purchase of any apartment buildings," he said. "I just think he's not operating on good facts."
Clarke said he gleaned the real estate transactions from weekly reports prepared by Rufus S. Lusk & Sons, a real estate information service here.
He said he compared the transactions to an address directory that denotes unoccupied buildings to come up with the list of vacant apartment buildings that had been sold.
Clarke said he is trying to further refine the data to find out how many units are in the buildings and whether developers are attempting to register them as condominiums.
"I think this belies the theory that the exemptions we've produced are ineffective," he said. "I'm also disputing the argument that units exempted from rent control are not trusted on the market for any investment to be made."
"We stand behind our statement," Slatton countered. "No new units have been built, and no substantial renovations have been done. It's that simple."
If a rash of speculation in abandoned apartment buildings is underway, some brokers contend that it may be for an entirely different reason -- the anticipated end of rent control.
"This may make our point that rent control hurts as opposed to helps," said Harps.
Officials of Lusk's, asked by a reporter to check, said that the number of apartment building sales actually declined from 185 transactions in 1983 to 167 transactions last year. There have been 22 sales during the first six weeks of 1985. The figures, however, do not distinguish between abandoned and occupied buildings.
Under the current law, buildings that have been vacant since 1980 are exempt from rent controls, which now apply to about 120,000 units in the city.
Clarke is sponsoring a bill that will continue current controls. Council member John Ray (D-At Large) has sponsored an opposing measure that would remove rent restrictions as controlled apartments become vacant.
Both measures are now pending before Ray's committee. The current controls are set to expire on April 30.