DC May Soon Exercise its Right of Second Refusal

by Nena Perry-Brown

While the Tenant Opportunity to Purchase Act (TOPA) is the District’s most well-known and contentious housing law, TOPA has a lesser-known safety-net law; the problem is that it has never been utilized.

The District Opportunity to Purchase Amendment Act (DOPA) became law in 2008 with the intention that it would be used as a tool to preserve affordable housing in developments where tenants decline to exercise their TOPA rights. The law permits the mayor, courtesy of the Department of Housing and Community Development (DHCD), to purchase a building with five or more residential units if at least 25 percent of the rental units are affordable to households earning up to 50 percent of area median income (AMI).

The goal of DOPA is that these purchases would allow the city to maintain existing and create new affordable units. Similarly to TOPA, the city can assign the opportunity to purchase to a third party who commits to abiding by the same preservation commitment. Also, there are certain timeframes and deadlines associated with exercising those rights: 30 days to inform the owner and tenants of intent to purchase, a 150-day negotiation period, and 60 days to settle after a sale contract is ratified.

In the years since DOPA passed, DHCD has received DOPA notices in the same manner that tenants receive TOPA notices when a landlord is looking to sell. For examples, between fiscal years 2013-2015, the city received 121 notices, primarily for buildings in Ward 4. However, in no instance has the city ever exercised their right to purchase a property because a regulatory framework to standardize DOPA was never established.

Two years ago, the mayor assigned a task force of public- and private-sector stakeholders to address DOPA and other issues related to affordable housing. The group drafted a regulatory framework for the use of DOPA, which is now under review within the government. While the final framework has not yet been released to the public, the task force has offered a wide array of suggestions as to how DOPA should operate. In order to select sites for DOPA purchase, DHCD will consider factors such as average cost per unit and will prioritize the following:

  • Buildings in an area targeted for increased housing or income diversity;
  • Building that are neglected or have amassed housing code or affordability requirement violations;
  • Buildings that have a vacancy rate of at least 15 percent;
  • Buildings that have an expiring ground lease or expiring affordable housing covenants;
  • Buildings that have fewer than 20 units or cost no more than $2 million; and
  • Buildings whose tenant population is 25 percent or more seniors or persons with disabilities.

Once the District exercises its DOPA rights, the goal is to be more of an intermediary than a long-term owner of the property. In order to select a qualified developer to assign those DOPA rights to, DHCD will consider the following:

  • The developer’s record on compliance (being in good standing, meeting green building standards, working with community-based enterprises, etc.);
  • Whether the developer is qualified and logistically and financially capable of carrying out the desired program;
  • The developer’s record of successfully developing and selling or renting residential units;
  • The developer’s intended approach of executing the goals of the project;
  • The developer’s marketing program and plan for acquisition;
  • The developer’s experience with ownership and asset management; and
  • The developer’s general commitment to affordable housing.

Another suggestion the task force has entertained is leveraging the Department of Housing and Urban Development’s transfer processes like Section 8(bb), which allow for Section 8 contracts to be wholly or partially assigned from one development to another. DHCD plans to release a regulatory framework for DOPA in September, after which there will be a 30-day period of public commentary. The rules are anticipated to be finalized by the end of the year.

Correction: The article has been updated to clarify the status and timeline of the drafted regulations.

This article originally published at https://dc.urbanturf.com/articles/blog/dc_might_soon_exercise_its_right_of_second_refusal/12897

DC Real Estate Guides

Short guides to navigating the DC-area real estate market

We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!

Northern Virginia

Profiles of 14 neighborhoods across Northern Virginia

Looking to Give People A Reason to Stay Past 6pm
Happily Straddling the Line Between City and Suburb
Columbia Pike
Arlington’s Neglected Stepchild is Getting a Makeover
Crystal City
Turning Lemons into Lemonade
Lyon Village
Developing An Air of Exclusivity?
Hitting Its Growth Spurt
An Urban Village Hitting Its Stride
Del Ray
Virginia’s Small Town Near the Big City
Eisenhower Avenue
The Vibrancy Might Take a Few Years
The Quiet Neighborhood By the Beltway
Old Town
Mayberry By The Potomac
132 Commerical-Free Acres
Downtown Falls Church
Staying the Same in the Midst of Change
Tysons Corner
Radical Change Could Be On The Way

See more Northern Virginia »


Profiles of 14 neighborhoods in suburban Maryland

Small-Town Living in the State Capital
Bedroom Community Gets Buzzing Cache
Cabin John
In With The New While Maintaining the Old
Chevy Chase
Affluence, Green Lawns and Pricey Homes
Downtown Silver Spring
Experiencing a Resurgence After a Bumpy History
A Suburb on Steroids
Rockville Town Square
Despite the Dynamism, Still Somewhat Generic
Takoma Park
More Than a Little Bit Quirky
A Foodie Magnet on the Verge of Change
Capitol Heights
Kudzu, Front Porches and Crime
Glass Half Full or Half Empty?
Mount Rainier
Artists, Affordable Homes and A Silo Full of Corn
National Harbor
A Development Rises Next to the Potomac
Riverdale Park
A Town Looking For Its Identity

See more Maryland »

Northwest DC

30+ neighborhood profiles for the city's biggest quadrant

16th Street Heights
DC's Sleeper Neighborhood
Where (Almost) Everyone Knows Your Name
AU Park
One of DC’s Last Frontiers Before the Suburbs
DC’s Northern Neighborhood on the Cusp
DC’s 535 House Neighborhood
Cathedral Heights
Do You Know Where That Is?
Chevy Chase DC
Not to Be Confused With the Other Chevy Chase
Cleveland Park
Coming Back After A Rough Year
Columbia Heights
DC’s Most Diverse Neighborhood, But For How Long?
An Island of Serenity East of the Park
Dupont Circle
The Best of DC (For a Price)
Foggy Bottom & West End
Where the Institutional Meets the International
Forest Hills
Ambassadors and Adventurous Architecture
Foxhall Village
350 Homes Just West of Georgetown
Friendship Heights
A Shopping Mecca With a Few Places to Live
History, Hoyas and H&M
Glover Park
One of DC’s Preppier and More Family-Friendly Neighborhoods
A Posh View From Embassy Row
LeDroit Park
A Quiet Enclave in the Middle of the City
Logan Circle
Trendy Now, But Not By Accident
Mount Pleasant
Sought-After Homes Surround Main Street in Transition
Mount Vernon Triangle
From Seedy to Sought-After
The Long, Skinny Neighborhood at the City’s Northwest Edge
Park View
It’s Not Petworth
Penn Quarter/Chinatown
DC’s Go-Go-Go Neighborhood
Getting a Vibrancy of Its Own
The Duke’s Former Stomping Ground
Shepherd Park
DC’s Garden of Diversity
Spring Valley
A Suburb With a DC Zip Code
Not To Be Confused With Takoma Park
Not Quite Like Its Neighbors
U Street Corridor
The Difference a Decade Makes
Woodley Park
Deceptively Residential
Adams Morgan
No Longer DC’s Hippest Neighborhood, But Still Loved by Residents

See more Northwest DC »

Southwest DC

The little quadrant that could

Southwest Waterfront
A Neighborhood Where A Change Is Gonna Come

See more Southwest DC »

Northeast DC

Profiles of 10 neighborhoods in NE

New Development Could Shake Up Pastoral Peace
A Little Bit of Country Just Inside the District’s Borders
Not to Be Confused With Bloomingdale
Fort Totten
Five Years Could Make a Big Difference
H Street
A Place To Party, and To Settle Down
The Northeast Neighborhood That Few Know About
Michigan Park
A Newsletter-On-Your-Doorstep Community
Evolving from a Brand to a Neighborhood
Ripe for Investment Right About Now
The Difference 5 Years Makes
Big Houses, A Dusty Commercial Strip and Potential

See more Northeast DC »

Southeast DC

6 neighborhoods from Capitol Hill to East of the River

Capitol Riverfront
Still Growing
Hill East
Capitol Hill’s Lesser Known Neighbor
Congress Heights
Gradually Rising
Notable for Its Neighborliness
Historic Anacostia
Future Promise Breeds Cautious Optimism
Eastern Market
A More European Way of Living

See more Southeast DC »