Whose Congress Heights Dream—Developers or Residents?

“If the council and [the mayor] were serious about affordable housing, they would finalize the regulations for DOPA [the District Opportunity Purchase Act],” said Will Merrifield, staff attorney for the Affordable Housing Initiative of the Legal Clinic for the Homeless. For more than two years, he has been representing low-income, elderly and disabled residents living in apartments in Ward 8’s Congress Heights.

When DOPA was approved in 2008 by the DC Council, it gave the executive permission to purchase land from private owners. The law was expected to be an effective weapon against the creep of rising rents and a prime tool for preserving so-called affordable housing. That was eight years and two mayoral administrations ago. Amazingly, the executive branch has yet to promulgate rules and regulations to implement the law. Further, it’s not clear that funds have been allocated to facilitate the purchases.

In 2015, Mayor Muriel Bowser’s administration promised to release regulations. This past June the Department of Housing and Community Development (DHCD), charged with implementing and administering DOPA, distributed guidelines that read more like an FAQ.  Release of the actual regulations was one of the six recommendations made by Housing Preservation Strike Force. During an interview in August 2016, DHCD’s Director Polly Donaldson told East of the River draft regulations will be “released this fall.”

Last month, Timothy J. Wilson, a spokesman for DCHD, said that the agency is “making progress. Preparing draft regulations is a process that requires thorough research and vetting. It’s not uncommon for numerous revisions to be drafted prior to making them available for public comment. Once a final draft of the regulations is approved, the public has a 30 day comment period to offer input. Afterward, the final regulations are published.”

Slumming and Suing: A History

Notwithstanding the process, it’s hard to imagine that it has taken eight years to complete. The delay has meant renters, like those at the Congress Heights apartment complex have been pushed out of the city or they have been left to wrestle with unscrupulous landlords.

Merrifield said “Congress Heights would be a perfect place to start [DOPA].”  Residents living in 3209 13th St SE, 1309 Alabama Ave SE. and 1331-1333 Alabama Ave. SE. could have used the kind of aggressive relief promised by that law. For five years, they have been battling the owner of the properties—Sanford Capital, LLC—and its partners, including CityPartners, LLC, to keep their low-cost housing. (A fifth building was owned by another partnership that owed the city more than $900,000; it has been vacant for years.)

When Sanford purchased the four properties in 2011 there were at least 64 tenants living in the 12 apartments, said Ruth Barnwell a long-time resident. Those numbers began to dwindle as Sanford and CityPartners began offering alternative housing, as part of their scheme to redevelop the property into commercial offices, retail and upscale apartments--a fraction of which would be called “affordable” but whose cost would be well above what Barnwell and her neighbors are paying. Some tenants accepted the offer; others moved on their own. Still others declined to leave. Thus began a major battle to preserve decent and affordable rental property in Congress Heights.

A. Carter Nowell, a principle for Sanford, could not be reached for comment. Geoffrey Griffis with CityPartners said he has been involved with the Congress Heights properties since 2008. In the beginning, he said, there was “great communication with community leaders and the residents. Things got very negative when the tenants got their current [legal] representative.

“The attorney today isn’t about getting what’s best for the tenants and the community,” continued Griffis. “I think he has another agenda.”

The shift in tenants’ attitude may have had something to do with the deteriorating condition of the properties, which became safe-haven for vagrants and a looming trash heap. Periodically in 2015, residents forced the DC Department of Consumer and Regulatory Affairs to conduct inspections of the properties. The owners were cited for violating the city’s housing code. But they only half-heartedly made repairs. Sanford-CityPartners had won approval from the zoning commission to raze the properties. Some critics have said that they deliberately allowed the apartments to fall into disrepair as a method of emptying the property.

Despite having permission to demolish the buildings, Sanford-CityPartners didn’t take that action. Why? The moment they announced such an action, they would have been required to issue a notice to residents under the city’s Tenant Opportunity Purchase Act. TOPA permits residents of rent control buildings to purchase their apartments when they are put up for sale. The law considers razing property a type of sale.

For months the tenants and Sanford-CityPartners were at a standstill; the property continued to deteriorate. In January 2016, Attorney General Karl Racine jumped into the fray, filing a lawsuit against Sanford Capital and other owners of the properties. He asserted that the buildings were infested with rats; they were filthy, lacked adequate ventilation, and contained other conditions that “constitute a hazard to its occupants or the public.” Earlier this year, a settlement was reached that required consistent upkeep of the property, regular inspections by DCRA and reports to DC Superior Court Judge Frederick H. Weisberg.

“We don’t believe Sanford Capital has been making repairs in good faith,” said Merrifield told East of the River last month

That may be a mute point, however. The owners have received an offer from a developer to purchase their properties, according to Griffis. That automatically triggered TOPA, providing tenants the right to purchase their buildings. “We thought that was a pretty big victory,” said Merrifield--except, Sanford has asked for a total of $12.5 million. That’s $10 million more than they paid for the property.

Griffis said Sanford did not “put a sale price on it.” Rather, they received an offer and “My partners thought it important to take it seriously.” He referred me to Nowell when I asked about the disparity between the sale price and what the company originally spent to buy the buildings.

Forward Slowly

Instead of sending residents through the cumbersome TOPA process, Merrifield said “City Officials could use DOPA to purchase this property and sell it back to tenants to allow [them] to collectively own.” That’s the same view Barnwell has, although she is somewhat satisfied that at least tenants can exercise their some of their rights.

” We met with [DHCD Director] Polly Donaldson almost a year ago. We’ve testified before the city council. We have been disrespected all the way around,” said Barnwell. “Why not let us get those loans? Just like they have sold some property to developers for $1, why can’t they do that for us?

“We’ve never been in their plans from the get go. They just want to bring the rich white people here,” continued Barnwell. “They need to start thinking about the residents, the taxpayers and the people who voted for [them].”

Merrifield argued that the city is “subsidizing the hell out of luxury apartments for developers.” He also pointed to the millions being spent at St. Elizabeths for a practice facility for the Wizards basketball team. That sports and entertainment complex would be within spitting distance of the apartment buildings to which Barnwell and her neighbors have clung.

Forget about it, said DHCD’s Wilson: “A transparent process needs to be in place in order for the District to effectively exercise its right to purchase through DOPA. We cannot exercise DOPA without regulations.”

Merrifield thinks the delay is deliberate, noting releasing the regs would be a political headache. “Politicians want to act like the affordable housing crisis just fell from the sky,” he added.

At the very least, said Barnwell and Merrifield the city could relieve them of their worries about that fifth building. “The city needs to work with us to help leverage the strongest deal possible through exercising TOPA,” said Merrifield.

Donaldson said in an email to East of the River that the agency has “reached an agreement with the owner of 3200 13th St SE to transfer the property to DHCD under a deed in lieu of foreclosure.” That means it’s in DHCD’s control and “pending resolution of existing litigation there, the agency plans to dispose of the property through a competitive bid process.”

She said the disposition would keep in place the current affordable housing covenant.

“What we have to do now is to stay organize and help keep things in the sunlight,” said Merrifield. “We have to make sure that 3200 isn’t somehow transferred to Sanford Capitol and Geoff Griffis.”

Merrifield’s may not get his wish, however. Griffis said “We’ve had conversations with [DHCD],” about the property. “I don’t know what [the agency] will sell it for. It’s not worth anything on its own.”

So while DHCD procrastinates with release of DOPA regulations, the story for Congress Heights residents may not change much. Even if they find a developer to help them purchase their buildings, their futures may still be in jeopardy.

jonetta rose barras is a freelance writer based in DC. She blogs at jonettarosebarras.com


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