A Slumlord Bent on Displacing tenants and a DC Law that (Sort of) Stands in its Way

This week in North Philly Notes, Carolyn Gallaher, author of The Politics of Staying Put explains how the Tenant Opportunity to Purchase Act (TOPA) is operating in Washington, DC. 

Cities are fashionable again.  After decades of disinvestment, people are coming back.  Washington DC is a case in point.  Between 1950 and 2000 the city’s population shrunk by 29%; however, in the next decade it grew 10%, from 572,059 to 632,323. Although population growth slowed after 2012, the city still added another 23,000 residents in the next two years.  Most economists think the city would have grown even more if not for the rising costs associated with living in the city.

Given these trends, it’s fair to ask why big cities like Washington, DC still have slumlords.  In the era of urban decline (roughly between 1960 and 2000) slumlords typically let their properties deteriorate because they couldn’t make a return on investments in them.  Today, returns on investments in rental accommodations are very likely, if not guaranteed.  Enter the modern slumlord.  No longer an individual or a family, the modern slumlord is often a real estate investment group, and for them disinvestment is a strategy for ensuring a larger return.  Instead of repairing and refurbishing an old building and earning modest returns, you tear it down, replace it with luxury apartments, and charge rents to match.  The only things standing in your way are tenants.  So, you stop making repairs and hope they’ll move out.

The residents in Congress Heights, a complex in the Anacostia neighborhood, know all about this strategy.  They’ve lived it for several years.  Their landlord, Sanford Capital, doesn’t make repairs anymore.  The company’s tenants live with sporadic heat, faulty plumbing, a bedbug infestation, rodents, and a basement with raw sewage and standing water when it rains.  People often pack up and leave when things get this bad, but a number of the tenants in Congress Heights are holding on.  Some of the complex’s longtime residents are elderly and can’t imagine living anywhere else.  Others don’t want to leave their friends and neighbors because they all look out for one another.  And, everyone is poor and worried about finding someplace else as affordable as where they live now.  They are right to worry.  The Congress Heights neighborhood is near a metro (subway) station and is, in developer speak, “ripe for redevelopment.”  A recent study by the DC Fiscal Policy Institute (DCFPI) also suggests there aren’t many affordable apartments left in the city.  Since 2002 the city lost nearly half of its affordable apartment units (defined in the study as units renting for $800 or less).

The District of Columbia has a law, the Tenant Opportunity to Purchase Act (TOPA), which should have prevented things from getting so bad at Congress Heights.  The city council introduced TOPA in 1981 in response to a spate of condo conversions in fast-gentrifying neighborhoods near downtown.  The goal of the law was to help tenants stay in place when their landlords decided to sell or convert to condominium.  TOPA states that when a landlord sells a rental apartment building, tenants are allowed to refuse the sale and purchase the building instead for the same price. Tenants are also allowed to purchase their building if a landlord wants to demolish it for redevelopment.  Tenants usually work with a developer (for-profit or non-profit) to purchase their building.  They can then choose whether to convert their building to condo or co-op or keep it rental.

By law landlords are supposed to inform their tenants when they contract a sale or submit formal plans for demolition with the city.  In practice, however, landlords often subvert these guidelines, and at various points in recent history the city agency responsible for regulating the TOPA process has abetted them.

The landlord at Congress Heights, Sanford Capital, applied for and received permission to demolish the buildings in early 2015 and the tenants have still not received a formal TOPA notice.  In the meantime, the city’s Attorney General, Karl Racine, recently sued the landlords and will ask the court to put the building into temporary receivership so a different owner can make repairs.  The city is also considering forcing Sanford Capital to issue its tenants a TOPA notice. In short, the law that didn’t work to protect the people it was supposed to protect may still be their last hope for staying put.

In my new book The Politics of Staying Put: Condo Conversion and Tenant Right-to-Buy in Washington DC, I assess TOPA’s success at helping tenants stay put.  As the Congress Heights case suggest, the law is imperfect.  Legislators need to specify fuzzy language, close some obvious loopholes, and demand city regulators actually provide oversight of the process.  But, I also found that many tenants have made TOPA work for them.  Most importantly, successful tenants associations have used TOPA to stay put—no mean feat in a fast gentrifying city.  Successful tenants associations have also participated in the benefits of reinvestment, whether as new owners building equity or as renters who can demand building wide improvements and continued low rents from their development partners.

The bigger battle, though, isn’t fixing TOPA. The law was never designed to be a stand-alone solution.  TOPA cannot, for example, ensure an adequate supply of affordable housing, police slumlords, or reign in the city’s pay-to-play approach with developers.  In fact, the city’s Zoning Commission approved Sanford’s plans for redeveloping the land where the Congress Heights apartment complex sits even after the city’s Department of Human Services and its Department of Housing and Community Development received hundreds of complaints about significant code violations in Sanford owned properties.  In these neoliberal times, cities don’t want to assume responsibilities for their low income residents (or increasingly, their middle income ones), but they will have to if they want to ensure their cities don’t become exclusive enclaves for the wealthy.  Otherwise, cities risk becoming a version of the 1980s era suburbs they long bemoaned.