The D.C. Council on Tuesday gave preliminary approval to legislation allowing homeowners who rent out their homes to sell them without giving their tenants the first opportunity to buy.
Realtors and housing activists packed the Council chamber as lawmakers voted 10 to 2 to exempt single-family houses from the District’s Tenant Opportunity to Purchase Act (TOPA), a law designed to protect renters from being pushed out of their homes during redevelopment.
In a fast-gentrifying city where housing prices have soared, any changes to tenant protection laws strike a nerve.
Critics blasted the bill as a giveaway to developers and real estate interests that would displace low-income renters.
But supporters say TOPA hurts the housing market. They contend homeowners aren’t renting out rooms, basements or attached units because they fear the headaches associated with the law when they want to sell. Some homeowners trying to put their houses on the market said they were shaken down for tens of thousands of dollars by companies that purchased tenants’ rights, the subject of an NBC-4 Washington investigative report last year.
“I firmly believe that this bill would help to expand affordable housing options for District residents by implementing policy changes that will encourage single-family homeowners to offer their basements, cottages and garages for rent,” said Council member Anita Bonds (D-At Large), who shepherded the bill as chair of the housing committee.
The bill passed over the objections of Council members Elissa Silverman (I-At Large) and Brianne K. Nadeau (D-Ward 1). They acknowledged that existing law was unfair to some homeowners, but said the bill before them didn’t do enough to protect tenants.
“To be clear, we cannot allow third parties to take advantage of our laws, nor can we allow homeowners to be manipulated by bad actors,” said Nadeau. “But we must use a scalpel, not a sledgehammer, to address an issue of such great importance.”
She instead wants to block tenants in single-family homes from selling their TOPA rights, as a way to address what some homeowners describe as extortion from predatory companies. Nadeau also unsuccessfully proposed an amendment that would maintain the opportunity to purchase for tenants who have rented a house for at least a decade.
The existing TOPA law is most commonly associated with condominiums and multifamily buildings where tenants’ associations work with developers to stay in their homes when the property owner wants to sell.
But tenants in single-family homes, often renting because they can’t buy, rarely use the TOPA law to purchase their homes. The Council pegged the average number of such sales as 3.2 homes annually.
For that reason, the bill’s supporters said effects on tenants would be minimal while benefits to homeowners would be enormous.
“It’s going to be great for both sides,” said District of Columbia Association of Realtors 2017 President Colin Johnson, who said homeowners “are going to feel confident they can rent their homes out . . . and they’ll also feel confident that their investment in their homes — which is in many cases their retirement and their life savings — won’t be tied up and won’t be extorted.”
The bill has also emerged as a campaign issue in the upcoming June Democratic primary.
Ed Lazere, who is challenging Council Chairman Phil Mendelson (D) from the left, released a statement hours after the vote needling the incumbent for supporting the bill.
“Unfortunately, at a time when we are facing an affordable housing crisis, when residents are demanding greater action, he used his political capital to advance legislation that will only make life harder for renters in D.C.,” said Lazere, who is on leave as executive director of the left-leaning D.C. Fiscal Policy Institute.
Mendelson, in turn, blasted critics for propagating “misinformation” about the bill and said he was looking out for residents who are unable to make quick sales or who are too wary to rent out rooms for extra income because of the current system.
“It hurts homeowners,” Mendelson said at the Council meeting. “Homeowners are complaining. Homeowners are keeping units off the market. Homeowners are finding it harder for them to age in place because they can’t get the supplemental income.”
Jeremiah Lowery, an At-Large Democrat who is challenging Bonds in the June primary, said her bill would lead to displaced residents. On Tuesday, Bonds said she wouldn’t support measures that exacerbate displacement.
Council member Robert C. White Jr. (D-At Large) recused himself from action on the bill because his wife is selling a single-family home where TOPA may be involved. The bill must clear another vote before heading to Mayor Muriel E. Bowser (D) for consideration.
The Council on Tuesday also unanimously gave final approval to legislation that would allow police officers seriously injured on the job to keep working, provided there are desk duties or other jobs they could still perform. They also sent another bill to Bowser that would establish a commission to study the District’s maternal mortality rate, which is twice the national average.