Mike the Mad Biologist

A few weeks ago, some asshole with a blog discussed how landlords in D.C. are engaged in algorithmic collusion to jack up rental prices. While that’s a new trick those gonifs have learned, the old ones–which target lower income people–are pretty despicable too, especially just ignoring rent stabilization restrictions (boldface mine):

In October 2016, as Robert Enzel was in the process of buying the rent-controlled Adams Morgan apartment building where I live, he emailed real estate broker Marty Zupancic asking for some advice. I had requested to move to a different unit in the same building, and Enzel wanted to know how much he could increase the rent if I left my apartment.

“If we agree to the move what can we advertise her apartment for? The $1360 she pays or the $3000 market rent?” Enzel asked in an email provided to me.

Zupancic appears to advise Enzel that he could essentially ignore D.C.’s rent control law because the Department of Housing and Community Development, which is in charge of administering the law, wouldn’t bother to check.

“You can ‘do whatever you want,’ weighing the risk versus reward, and also depending on if you do work to the unit, etc.” Zupancic replied. “By right/law, you can add 10% immediately to her $1360 … or $1496. In reality, unless your new tenant complains to DHCD (not likely that a tenant at $3,000 will care one way or another), its between you and your tenant. We can talk about strategies that other investors implement all the time.”

Zupancic’s response is half right. The law allows landlords to raise the rent by up to 10 percent in vacated units. But his advice that “you can do whatever you want” provides a window into the role that real estate agents and investors can play in evading D.C.’s rent control law (officially called “rent stabilization”), due in part to a lack of enforcement from the DHCD’s Rental Accommodations Division. (DHCD representatives did not respond to multiple requests for comment.)

…I ultimately remained in my unit, and my rent didn’t increase, but my new neighbors were not so fortunate. I discovered years later that Enzel and his partners, through their 2523-13 LLC, raised the rents in the other units by about 60 percent over the past five years.

Here are some of the tricks they use:

• Some D.C. landlords do not register rent-controlled units with DHCD as the law requires, nor do they tell tenants that the units are rent controlled. Without that disclosure, those landlords then go on to charge much higher, illegal rates without tenants’ knowledge.

• Tenants have a three-year window to challenge unlawfully high rents. The clock starts when tenants begin paying the increased rate. If they don’t object via a tenant petition to DHCD within three years, the high rental rate is almost always set in stone for the current tenants and future tenants as well.

• Some landlords seek to remove existing tenants, then add more bedrooms to the vacated units to justify charging more rent. Newly constructed units are exempt from rent control, and the landlord can set the new rate. But some landlords are adding additional bedrooms to existing units and raising the rents on those “reconfigured” units even though the square footage remains the same. And though DHCD must approve a rent increase based on renovations or capital improvements, some landlords have simply reported new, much higher rents without any review by DHCD.

• Some landlords are exploiting an exemption to the rent-control law for voucher holders. Landlords are allowed to charge voucher holders market rate for rent-controlled units. If that tenant moves out, the unit is supposed to return to its rent-controlled status, but landlords often continue advertising and charging the higher, market rate.

• Some landlords list long-term rental units on sites such as Airbnb and lease them for rates that are higher than the rates registered with DHCD. In some cases, tenants have overpaid by as much as twice the registered rent.

• The task of preserving D.C.’s rent-controlled housing falls to tenants, who must be willing to take their landlords to court and have the resources to do it. That’s because the two government agencies responsible for enforcing housing and business regulations, DHCD and the Department of Licensing and Consumer Protection, have largely failed when it comes to rent-controlled housing.

This is what I meant when I blogged that Democrats could do something about this. The Democratic-controlled Council (and the independents are farther to the left) could fund more inspectors and regulators, provide Legal Aid more funding for housing lawsuits, crack down hard on Airbnb, and pass much stricter penalties–including jail time–for landlords who violate these policies.

If we’re throwing shoplifters under the jail for petty larceny, then landlords who violate the D.C. Code while stealing thousands of dollars per tenant should do time too.

Of course, Mayor Bowser and her ‘Green Team’ (who don’t call themselves that due to a commitment to environmental issues) won’t push for this, and this problem, to a great extent, is due to executive branch failures to enforce the laws. Maybe next time, the mayoral election will be about something that matters–and the candidates running won’t be afraid to attack Bowser on this issue (and others).