Part I: What Are the Provisions of Current District Rent Control Laws?

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DC’s rent control laws, first enacted in 1985, are designed to stabilize the rents of current tenants in order to protect them from rapid and unreasonable increases in their rents. While landlords can increase rents from year to year, these increases must meet established parameters and be predictable.

Rent control laws are worded broadly and apply to all rental properties in the city,[1] with a series of exemptions limiting their application. Currently, laws exempt: (a) housing providers who own less than five units, including condominiums and co-ops; (b) units in buildings constructed after 1975,[2] (c) dwellings vacant at the time of the entry into force of the law, and (d) buildings covered by a building improvement plan and benefiting from rehabilitation aid from the Fonds d ‘ earmarked for the production of city housing.

For most dwellings, the law limits the growth of rents to the change in the consumer price index plus two percent (hereafter, CPI + 2 percent), and allows an increase if the last increase goes up. at least 12 months. In addition, the landlord must give 30 days notice of any rent increase.

When a unit becomes vacant, the rent offered to the new tenant can be increased up to 20% above the rent paid by the previous tenant, depending on the mandate of the previous tenant.[3] This means that as tenants renew, rents may increase by more than the allowable CPI + 2%.

A housing provider can ask municipal authorities[4] for larger allowable increases in five different circumstances:

Under hardship petitions, housing providers must demonstrate that their rate of return on their investment in the rental property is less than 12%.[5] If providers can document lower returns by sharing information about their income and expenses, they can raise rents enough to get a 12% rate of return on the rental property.

Under substantial rehabilitation petitions, the housing provider can permanently increase the rents for a rehabilitation project, which is defined as a project that costs more than half of the estimated value of the building (or unit). Once the pardon application is approved, rents could increase permanently by up to 25 percent.

Under capital improvement petitions, the housing provider may request a temporary increase in rents by an amount sufficient to cover the cost of the capital improvements.[6] If approved, the supplier must complete the work before increasing the rents. If the capital improvement concerns the whole building, such as replacing a roof, the costs are spread over eight years and the rent supplement is limited to 20% of the rent; if they only relate to certain dwellings (such as replacing windows), the costs can be spread over 64 months and the surcharge, which only applies to tenants whose dwellings have been improved, cannot exceed 15% of the rent. Low-income elderly and disabled tenants are exempt from the surcharge.

Under petitions services and facilities, rents may be increased if the housing provider provides a new service or installation and decreased if the provider eliminates an existing service from the facility. For example, if the building closes a fitness center previously available to tenants, tenants can request a reduction in rent.

Under 70 percent of voluntary agreement petitions, tenants may voluntarily accept an increase in rents in exchange for improvements to capital, services and facilities, or repairs and maintenance. If approved, the housing provider can only increase rents by the amount of the agreement after meeting the requirements of the agreement. As long as seventy percent of tenants agree, all tenants are included in rent changes, including those who haven’t signed it.


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Remarks

[1] Exceptions are dorms, hospitals, rental accommodation managed by a foreign government, and long-term temporary accommodation managed by a non-profit organization (must be approved).

[2] To be exact, the law exempts buildings with an approved building permit issued after 1975. Buildings that obtained building permits before 1975 are subject to rent control even if construction was completed in subsequent years.

[3] If the previous tenant was in the unit for more than 10 years, the cap is 20 percent, and if the tenant was in the unit for less than 10 years, the cap is 10 percent. Previously, rents were allowed to increase to match the rent charged for a substantially similar unit, but not more than 30 percent. The 2018 Law Amending the Job Increase Reform Act amended this provision. (Law DC 22-223, 66 DCR 185, in force on February 22, 2019)

[4] Applications are filed with the city rent administrator. If the Rental Administrator denies the application, the housing provider may request a hearing from the Administrative Hearings Office to resolve the dispute.

[5] Here, the rate of return is defined as the net income earned over a year as a share of the supplier’s equity in the building.

[6] These include work to rehabilitate or improve a home, or replace items that have reached their useful life. The investment must be “depreciable” and include items such as replacing a roof or an elevator, installing new windows, installing new plumbing fixtures or appliances.

DC Policy Center Fellows are freelance writers and we welcome the expression of a variety of perspectives. The views of our fellows, published here or elsewhere, do not reflect the views of the DC Policy Center.


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