Here’s the backstory: More than two years ago, Bush informed residents that they would stop receiving the Section 8 government subsidy for low-income residents and that the 302-unit building would be replaced with a newer one.
But under the District’s Tenant Opportunity to Purchase Act, residents have the right to buy their building before it can be gutted or sold to a third party. Bush Companies told tenants the building would cost them $250 million, or about $830,000 per unit. The residents and some city officials contended the price was arbitrary and exorbitant, prompting tenants to sue in D.C. Superior Court, alleging that Bush Companies had violated their rights.
The court sided with the tenants, Bush Companies appealed, and now the appeals court once again has ruled in favor of residents. Both courts said that Bush Companies based its asking price on what the building would be worth once it is renovated in a few years, not its current value. (Bush filed the appeal under “Parcel Phase One Associates,” the name of its affiliate that legally controls Museum Square.)
“Viewing the undisputed facts in the light most favorable to Parcel One leaves us with the firm conviction that Parcel One’s $250 million offer of sale on June 6, 2014, was not based on an objectivelygood faith assessment of the value of the property at that time, even taking into account Parcel One’s intended use,” Senior Judge James A. Belson wrote in his Sept. 22 opinion.
For now, residents are remaining in the building. Even though rents jumped to market rate when the Section 8 contract expired last year, most residents are receiving federal vouchers that help them to pay their rent and stay in the building. Residents have contended though that Bush Companies has purposely made the process of staying in their longtime-subsidized apartments confusing — a procedure already challenging because a large portion of the residents are elderly and don’t speak English.
Caroline Hennessy, a community organizer at Housing Counseling Services who has been working with Museum Square tenants, said the court’s ruling is a boon for tenants.
“It is good news for the tenants,” she said. “For tenants, it’s a stabilizing decision. It affirms their ability to stay and live there.”
If Bush Companies were to offer the tenants a lower price to purchase the building, they could pool their resources or partner with a third party to buy it.