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Why DC Rents Have Risen 65% When Most of the City’s Apartments Are Rent Controlled

by Nena Perry-Brown

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Rent-controlled apartments in the city, by ward.

A recent study by District, Measured shows that nearly two-thirds of rental units in DC are subject to rent control laws, yet rental rates in the city increased 65 percent between 2005-2014.

While rent increases in rent-controlled units are generally stipulated by the Consumer Price Index or other cost of living measures, DC landlords and owners are allowed to significantly increase the rent when a unit turns over. Once an apartment is vacated, the owner or manager of the property can increase the rent by 10 percent or “to the amount of rent charged for a substantially identical rental unit in the same housing accommodation” provided that increase does not exceed 30 percent.

In this way, vacant apartments can become “spoiler” units, which set off a domino effect with other units as turnover naturally occurs. This dynamic seems to hold true whether a unit is vacated repeatedly or just once over the course of several years.

From District, Measured:

“Higher turnover, which may be due to changing demographics (more married couples and fewer singles remaining in the same unit for many years) or a spoiler unit, which may be the substantially identical unit on the same floor but close to the garbage room or near the garage exit, could cause rents to increase significantly even with rent control.”

Out of all rental units in DC, 63.2 percent are intended to be rent-controlled. In general, these units are in buildings which have more than five units and were built before 1975. Ward 3 has the largest share of rent-restricted apartments, at 82.9 percent, followed closely by Wards 4 and 8. Ward 6 by far has the smallest share of rent-restricted apartments, at 27 percent.

This article originally published at http://dc.urbanturf.com/articles/blog/almost_two-thirds_of_dc_rentals_are_rent-controlled_yet_rates_have_increase/11019

2 Comments

  1. Emilie Fairbanks said at 4:27 pm on Thursday March 24, 2016:

    The vacancy law allows owners to bring units up to market rates when they become empty. The law only imposes rent control on units built before 1975. Rent control laws are harsh and difficult for owners to deal with. This has created an incentive to build new whenever possible. It also doesn’t apply to small landlords owning fewer than four units. Many owners who would otherwise buy and renovate more units in DC refuse to go above that four unit cap to avoid the complex regulations that come with rent control. The city should be working with all stakeholders, including landlords and property owners, to understand the affordable housing crisis. I hear their perspective daily and they have ideas and insights the city could benefit from but it’s very difficult to get anyone to hear them.

  1. K. David Meit said at 10:24 am on Sunday March 27, 2016:

    Great comment, Emilie. You know more than most the difficulties housing providers face under DC’s rent control regime. But note units can NOT be brought to market upon vacancy, increases are capped at 30% (and only when a high comp is in place). This causes a wide disparity among rent for similar unit types within the same community. And since there is no means test in DC, anyone can land a rent control units despite having resources to pay market rent. In short, rent control is no more than a price control, which has been proven to be a failed economic theory. Remove the artificial price control and establish true affordable housing initiatives (like the IZ program for new development) and the market will re-balance. All it takes is political courage by Mayor Bowser and the Council.

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