Thanks to the Rental Housing Act of 1985, DC has rent control laws that limit how much rents can go up in a given year for anyone living in a building with five or more units and built before 1975. But a lot of people miss out on these protections when landlords use a loophole called a hardship petition.
1320 Nicholson Street NW, where a landlord raised rent after filing a petition saying he wasn’t making enough of a profit. Image from Google Maps.
“The landlord raised rent three years ago with no notice. A lot of people who had lived here fifteen, twenty years chose just to leave.” That’s Javier Rivera, a resident at 1320 Nicholson Street NW, talking about how rent in his rent-controlled apartment recently went up.
The basic rule of rent control is this: if you live in a building built before 1975, your annual rent increase is limited to inflation plus two percent. For 2015, that would mean about a three percent bump. So, if your rent costs $1000, and inflation is 1%, that means your rent could go up by $30 at the most.
But because of a loophole called the hardship petition, that’s often not the way it works.
This section of the law seems to dictate simply that rent control shouldn’t prevent landlords from making money on their investment. If they’re not getting a reasonable return, they can file a hardship petition with the DC Rent Administrator to ask to be allowed extra rent increases. It’s an eminently reasonable idea—if landlords are putting money into buying and fixing up apartments, they should be financially rewarded for their work.
It’s become problematic, however, because of what the law considers to be a “reasonable return.” Landlords of rent-controlled buildings in DC can file a hardship petition if the rate of return on their property is less than 12%.
Given that DC is dealing with an affordable housing crisis and costs keep rising, that’s a questionable bar to set for raising rents.
If landlords aren’t profiting enough, rent can go up
To put that in context, the average landlord in both DC and the greater region saw about a five percent return on investment in 2014.
And this takes us back to 1320 Nicholson Street In 2013, Rivera’s landlord Michael Lesesne filed a hardship petition. He won, and residents soon saw increases of 40, 50, even 70 percent on their monthly rents.
The tenants hired a lawyer and were eventually able to convince a judge to overturn Lesesne’s petition. But the damage had already been done: Lesesne had pocketed the money and to this day claims he’s unable to pay residents back.
Latare Whitaker, another tenant, says the irony has not been lost on those who live there. “Mr. Lesesne didn’t have any mercy on us when he raised our rent. Now he’s asking for mercy after a judge has ordered him to pay back what’s ours.”
Some lawmakers are working to ditch hardship petitions
The Nicholson Street residents say this all could have been prevented if their landlord hadn’t had such tools at his disposal in the first place, and they’re fighting to save other tenants from their fate.
“This,” says Whitaker, “is going on all over the city.”
DC Councilmember Anita Bonds agrees with him. She and fellow councilmember Robert White (who was then the Democratic nominee for an at-large seat on the council and has since been appointed as councilmember) both spoke during a summer rally at the Nicholson Street property about the problems rent control faces.
“We have to draw attention to these situations,” said Bonds. “So often on the council all I get to do is hear. Today I get to see.”
Councilmember Bonds has also gotten to do some writing. Last year she introduced the Rent Control Hardship Petition Limitation Amendment Act of 2015, a bill that would limit the amount rent can go up as a result of hardship petitions to five percent, which is the regional average.
Bonds’s bill is currently before the council and needs to be voted on before the end of the year, when proposed bills that haven’t had a vote will slip away or need to be reintroduced next year.
Other rent control bills have recently come before the DC Council as well.
For their own sake and for the sake of their fellow tenants, the residents at 1320 Nicholson Street hope that sometime soon, the council gets to do some voting.