Image by Kristine Marsh used with permission.

Legislation under consideration in the DC Council would eliminate TOPA rights for renters in English basements, carriage houses, and garage apartments, making it easier for homeowners to sell their property.

A few weeks ago, GGWash explored the bill Councilmember Anita Bonds (D-At Large) introduced over the summer. Since then on Sept. 21, the council’s Committee on Housing and Neighborhood Revitalization, which Bonds chairs, held a hearing on the TOPA Accessory Dwelling Unit Amendment Act.

The bill as introduced would exempt a second unit in a single-family residence, such as a basement, carriage house, or garage apartment as long it takes up less than a third of the building and the owner lives in the main unit. It would also shorten deadlines that tenants in single-family homes must meet in order to take advantage of the Tenant Opportunity to Purchase Act.

There’s a heated debate about this: some say the law lets tenants demand a payout in exchange for allowing a home sale to proceed, while others say it’s a tool for protecting renters and affordable housing that shouldn’t be weakened.

What’s new with the proposed TOPA changes

At the September hearing, Bonds laid out changes to the legislation that emerged from a working group of tenant and real estate stakeholders. The bill retains the exemption for second units in a single-family residence, which it refers to as “accessory dwelling units.” The revised bill would shorten deadlines further, allow for notices to be delivered through more methods such as postal mail or email, and eliminate a provision requiring a property owner who doesn’t complete the TOPA process within 180 days of offering the property for sale to start over from scratch.

However, whether and how tenants can sell their right to purchase the property is a challenge, Bonds told me on October 4, and they haven’t reached a consensus on how to approach the issue. “That’s one of the toughest parts of this whole situation,” she said. “The issue of the assignment—it’s something that the working group continues to wrestle with.”

The bill under consideration would only affect how TOPA works in the single-family home market. But stay tuned: Bonds told me she plans to take up TOPA in multi-family housing.

TOPA was intended to benefit renters in large, multi-unit buildings

Carolyn Gallaher wrote last year about her experience with TOPA. When her building went up for sale, the residents organized a tenant association. They worked with a developer and agreed on terms under which the association would sell the right to purchase the building to the company. Under the terms they agreed to, some tenants bought their apartments and others received cash buyouts and left.

These were the conditions that they agreed to, but tenants could also negotiate terms under which units remain rental. It’s a matter of what the tenant association is willing to agree to in exchange for selling its right to purchase the building.

“To me, the whole purpose of the act is to increase bargaining power,” Rick Eisen, a DC real estate and housing attorney who wrote TOPA for the Council, told me. “I’m going to tell you now that my definition of success is that the members of the tenant association is going to end up with something better. It was never intended just as a way to make tenants into homeowners.”

Eisen co-chaired a committee of attorneys who wrote legislation that became the 1980 TOPA bill. When the lawyers finished, they forwarded their work to Councilmembers John Ray and John Wilson, who sponsored it in the Council and pushed for its passage.

“We were not terribly concerned about single family units,” Eisen told me “I think the original draft of the bill—I don’t know that single family units were even included.”

Image by Ted Eytan licensed under Creative Commons.

Tenants’ ability to sell their right to purchase property has been part of TOPA since the beginning

The ability to assign purchase rights to a third party has been part of TOPA since it was first enacted in 1980 as part of a package of legislation intended to preserve housing for tenants faced with conversion from rental units into condominiums.

The DC Council enacted TOPAin 1980 not only to give tenants a chance to buy their homes, but to continue “the policy of the Council of preventing displacement” according to a report that year by the Council’s Committee on Housing and Economic Development.

The DC Court of Appeals, the city’s highest court, summarized an excerpt of the Council’s deliberation when it considered enacting TOPA, as recounted by Eisen in a 2005 ruling.
“The unambiguous answer from all three sponsors was yes; this is the approach that was accepted by the full Council,” Eisen said about Councilmembers Ray, Wilson, and David Clarke, who also sponsored the legislation, according to the court. “While there was no comparable discussion concerning sale of tenant purchase rights, I believe that is because there was no need to differentiate between the rationale for sale of conversion rights and sale of purchase rights.”

Where should we go from here?

The problem is that for renters in single-family homes, TOPA doesn’t live up to its intent, according to Council Chairman Phil Mendelson (D-At Large).

“What TOPA has evolved to is not a pretty picture when it comes to single family homes,” he said at the hearing. “It’s not what the intent was of the law and I don’t think it furthers any of the goals we consider to be important, whether it’s affordability or more rental housing or actually helping tenants stay in place or even creating home ownership.”

Mendelson thinks the best approach is to exempt single-family homes from TOPA. He emphasized several times during the hearing that his proposal only covers the single-family home market.

“When we’re dealing with a one-off house here, house there, we’re not talking about stability for housing for large numbers of residents,” he said. He expressed frustration that tenants can sell their purchase right to a developer that builds its expenditure into the cost for the unit’s next resident, while the outgoing tenant pockets the cash and moves elsewhere.

“That sounds like gentrification to me,” Mendelson said.

Polly Donaldson, director of the DC Department of Housing and Community Development, ducked questions on whether single-family homes should be exempt from TOPA. “I think we need to examine that,” she said.

Donaldson is concerned about TOPA’s administrative burden for DHCD and for landlords. She supports updating some of the law’s administrative processes–such as allowing notices to be delivered by email–to reflect technologies that didn’t exist when the law was passed nearly four decades ago.

“DHCD recognizes the frustration housing providers and real estate professionals experience with the TOPA process, which may seem particularly burdensome when they seek to sell single-family properties,” Donaldson told the committee. “These inconveniences, however, must be balanced against the rights of tenants and of housing providers that remain in the District’s robust real estate market.”

Jon Steingart is a Ward 1 resident who earned his law degree at the University of the District of Columbia and his undergraduate degree at the University of Maryland. A licensed attorney, he previously worked as a journalist covering litigation and policy in the field of labor and employment law.