Council Tightens Language on Prior RENTAL Act Passage, Dials Back Early Childhood Educator Pay Rates With Hopes to Revisit Later

Members of the public might never have noticed that the the Council’s Legislative Meetings technically come in two different varieties. One variety, known as Regular Meetings, are usually held on the first Tuesday of each month, and are scheduled far in advance, usually at the beginning of the year. The second variety, Additional Meetings, are scheduled on an as-needed basis, and most often occur mid-month. The Council’s most recent Legislative Meeting was an Additional Legislative Meeting, added to the schedule fairly recently. Therefore, it follows that the Council’s two primary actions at this meeting were timely, time-sensitive readjustments to prior Council actions.

RENTAL Act

The first such readjustment involved a rare third vote by the Council on the same piece of legislation: the Rebalancing Expectations for Neighbors, Tenants, and Landlords (RENTAL) Act. The bill was introduced by the mayor in March, the full bill was folded into her budget proposal in May, then broken back out as a piece of distinct legislation by the Council so that a standalone hearing could be held and a full, independent legislative record could be created.

A first vote was taken on the bill on July 28, and a second vote was taken on September 17. When concerns were raised that the legislative language of one amendment passed at the September 17 meeting may have missed the mark regarding its original legislative intent, it was decided that the vote on the entire RENTAL Act would be revisited at subsequent Additional Legislative Meeting. This is what came to pass at the most recent meeting, with a motion to reconsider the vote and the content of the Council’s prior action.

Background

Like most Council legislation, the RENTAL bill is a complicated balancing act—an attempt to balance maintaining the District’s cherished legacy of tenant protection law with the reality of a District-specific decline in housing production, especially affordable housing production. With elevated rent nonpayment rates dating back to COVID-era tenant protections, coupled with judicial vacancies in landlord/tenant court and the slower transaction timeline reportedly associated with the Tenant Opportunity to Purchase Act (TOPA) adherence, housing investors are uniquely wary of investing in the District.

In regards to one of the RENTAL Act’s most discussed provisions, the bill would provide for expedited evictions in cases of an alleged crime of violence in a unit on the premises, if a judge made a preliminary determination by a preponderance of the evidence that such a crime had occurred. This was intended as a compromise between the provision being triggered by an arrest for such a crime (seen as too broad) and by formal charges being pressed (seen as too narrow). More broadly, the bill shortens the notice period for all evictions from 30 days to 10 days.

An amendment prior to the second vote on the bill clarified that if a tenant was themselves the victim of a violent crime in their unit, they cannot be evicted because of that crime. The amendment also ensures that victims of domestic violence and other legally protected, especially vulnerable tenants would continue to be provided reasonable accommodations as required by law.

Tenant Opportunity to Purchase Act Provisions

In regards to TOPA, the bill as passed would exempt residential buildings for the fifteen years following construction from the requirement to allow tenants the opportunity to purchase their building. Fully 96 percent of properties that have a TOPA transaction were built prior to 1978, so newer buildings do in practice already make less use of TOPA protections.

As amended and passed at the most recent Legislative Meeting, the bill would exempt buildings with four or fewer units, and not under corporate ownership, from TOPA. In 2018, the Council voted to exempt single family homes from TOPA, and this latest amendment would basically dial up the number where TOPA kicks in for non-corporately owned buildings from two to five units. Housing accommodations with between two and four units that are owned by a business corporation would remain subject to TOPA.

The goal of this change was to balance the possibility for homeowners or small investors to freely create and sell truly micro-multifamily units against the District’s longstanding tradition of tenant protection and a tenant’s opportunity to purchase. An effort to prevent larger financial actors from attempting to bundle multiple such smaller, TOPA-exempt buildings by only allowing this TOPA exemption for owners of two or fewer such buildings was deemed by some as impractical or unwieldy to implement, and was removed prior to final passage.

As initially passed at the prior Legislative Meeting, the bill also provided a TOPA exemption for the sale of buildings where the buyer agrees in writing to maintain rents for 51 percent or more of rental units at at or below eighty percent of Area Median Income for the twenty following years. Known as an affordability covenant, this can be seen as an effort to balance long-term guarantee of affordability for the many against the short-term financial compensation of the few. However, research has shown that existing TOPA protections already provide equal or greater long-term protections of affordability than would covenants. The affordability covenant language was removed via amendment prior to the second vote on the bill.

Other amendments to the RENTAL Act:

• require tenants in non-payment eviction cases to pay rent into the court registry, even during the increasingly extensive lead-up time to the hearing on any defense raised by the tenant
• reintroduce a preferred class of Qualified Purchasers who have established themselves as trusted actors who follow best practices and, as such, receive beneficial tax treatment during purchase transactions
• clarify the definition of “tenant” to provide a more common sense standard, so that even when neither a new building owner or a current renter can produce a written copy of a lease, the renter is still recognized as a tenant
• reinstate a mandatory “cooling-off period” during which tenants cannot transfer their purchase rights unless they meet with a tenant support provider first, in an effort to avoid rushed, ill-informed buyout transactions influenced by bad actors

Early Childhood Educator Pay Scale Reduction

The second major legislative adjustment that occurred at the most recent Legislative Meeting involved an adjustment, via emergency and permanent legislation, to the pay scales included in the Council’s prior landmark early childhood education compensation law. The District set national precedent years back when the Council approved its FY 2022 budget including required pay rates for early childhood educators that sought to better match those paid to DC Public Schools teachers.

Two budget cycles ago, the mayor proposed zeroing out the Early Childhood Educator Pay Equity Fund. Councilmembers, advocates, and the public spoke with a single voice in insisting that this nationally pioneering landmark Council-created program had to be saved. The Council fought hard to restore those funds. Then, in last year’s budget, the mayor proposed just one year’s worth of funds for the program across the five-year financial plan. The Council bolstered the funds provided, but due to the program’s success, the budgeted funds will prove to be insufficient. In conversations with advocates, the Council attempted to design the necessary cuts so as to soften their impact. Based on those conversations, the mandatory compensation scales for early childhood assistant and lead teacher were reduced via the emergency and permanent legislation passed at the most recent Legislative Meeting.

For this budget year, this concludes a process that just two years ago threatened to entirely eliminate this essential and innovative program. While this result is not what anyone anticipated, it is certainly a best effort to limit the impact of these necessary, unfortunate, and hopefully temporary cuts. From the dais, Councilmembers affirmed their dedication to this critical program and asserted their intent to better the present situation via the upcoming new budget cycle in the spring.

The Council’s next Legislative Meeting will be held on November 4.