'We Have Upended The Whole System': Mayor Bowser Calls For Rollback Of Pandemic-Era Eviction Policy

D.C. Mayor Muriel Bowser threw her weight behind emergency legislation that would close a loophole in the District's Emergency Rental Assistance Program that has led to a crisis of rent delinquencies among affordable housing providers in the city.

D.C. Council Chairman Phil Mendelson introduced the ERAP reform bill Thursday on an emergency basis — meaning it only requires one council vote and the mayor's signature — and put it on the council's legislative agenda for Tuesday. 

The mayor made her first public comments on the proposal Monday, saying it is a necessary step to protect affordable housing properties in the city from going into foreclosure — which would strip their affordability covenants.

Bowser, who has directed hundreds of millions toward the development of affordable housing in her decade-long tenure as mayor, said the investments her administration has made are “at risk” because providers can't reliably collect rent.

At a press conference in the John A. Wilson Building, Bowser said ERAP reform, along with a recently announced program from the Department of Housing and Community Development to provide loans to keep owners afloat, represent “Step 1” to stabilize the city's housing system. 

The ERAP bill would roll back some of the changes the District made to the program during the pandemic that have led to tenants using the program to avoid evictions while not paying rent.

“We were in unprecedented times and rose to those challenges, but those policies were never intended to be long-term, and by keeping them in place we have upended the whole system,” Bowser said. “The affordable housing ecosystem has been turned on its head.”

Bowser said among D.C.’s affordable housing properties, on average 20% of units have a rent delinquency. The total unpaid rent landlords are owed is up to $100M, she said Monday, and on track to hit $150M by next year unless policies are changed.

The changes, passed in 2022 and enacted last year, allowed tenants to delay eviction proceedings simply by showing they had a pending ERAP application, allowing them to self-attest to their eligibility criteria and removing a judge’s discretion over when to delay an eviction case.

Mendelson’s bill would give more discretion to judges and require tenants to show that the ERAP funding they have applied for would be enough to cover the unpaid rent they owe or that they have a payment plan with their landlord for the remainder. 

It would also limit the number of stays the court can apply due to ERAP applications to one per case, so tenants can’t repeatedly delay eviction with multiple applications while racking up tens of thousands in unpaid rent. Landlords have been raising alarms about this practice and its impact on their financial stability, and Bowser on Monday confirmed she sees this occurring.

“More and more people are staying in units, not paying rent and misusing the ERAP process to prevent their landlords from being able to collect in the normal eviction process,” Bowser said. “So what this means is many housing providers no longer have enough funds coming in to cover their operations and debt.”

The District received roughly 20,000 ERAP applications in the fiscal year ending on Monday, up from 8,682 received in fiscal year 2023 and 8,236 in FY 2022, Bisnow reported.

The issue of mounting rent delinquencies was first identified in a June report from the Apartment and Office Building Association, which found some of the city’s largest housing providers had millions of dollars in unpaid rent that was straining their finances.

It gained more attention when longtime D.C. housing developer Neighborhood Development Co. announced it was shutting down due to an “untenable” environment, and a Bisnow investigation examining the issue and the broader challenges that have caused an existential crisis in the District's affordable housing system was cited in Mendelson's memo introducing the legislation.

Housing providers have told Bisnow that if D.C. doesn’t address the crisis before the end of the year, some affordable buildings will go into foreclosure, leading them to lose their income-restriction covenants, and more housing providers will leave the market, creating further instability in the city’s housing system. 

“Our communities could lose affordable housing forever if these landlords can no longer pay their mortgages and they are either foreclosed on or turn in the keys,” Bowser said. 

AOBA and the landlord group Small Multifamily Owners Association told Bisnow they support the bill, but they say it is one of several steps the city must take to solve the problem. 

“This was low-hanging fruit, the easy lift, and so now begins the hard work of trying to identify and build consensus around taking much more expansive action,” AOBA Vice President of Government Affairs Brian Gordon said. 

One step housing providers have called for, an injection of funds to offset the millions in unpaid rent they are due and help them cover their mortgage payments to avoid foreclosure, is in the process of being addressed without legislation.

The Department of Housing and Community Development last month put out a request for proposals for housing owners in need of bridge loans to help them avoid foreclosure.

“The decision to focus on these types of affordable housing projects was based on the increase of economic uncertainty affecting a number of District tenants, developers and housing providers,” DHCD Director Colleen Green told Bisnow in a statement. “The proposals we receive will help us assess where our investments are needed.”

City officials expect it will use all of the roughly $80M allocated to the city’s Housing Production Trust Fund for the next fiscal year. As The Washington Post first reported, this means DHCD doesn’t plan to award money to any new affordable housing projects and instead will focus on shoring up investments it has made, including completed buildings and those under construction that have already received government funding. 

“This will allow us to protect the affordability of residents' homes and prevent foreclosure as well as to stabilize the affordable housing properties with existing District and federal investment,” Bowser said.  

The HPTF funds will only go toward affordable housing with government subsidies, not to naturally occurring affordable properties. Owners of that type of housing, including CIH Properties Chairman Mike Huke, have told Bisnow they are seeing the same crisis of rent delinquencies and also need city support. 

Bowser said the city is focused on subsidized affordable housing for now but may expand its approach after the initial round of funding. 

“We are at the first stage of addressing an emergency situation for our affordable housing providers,” Bowser said. “We’ve talked about the covenanted affordable housing the District is invested in, and that will be the first stage. I’ve talked to providers as well who think the problem is larger than what we have in the first tranche of HPTF. That may be the case, and we may come back with another solution.”

By introducing ERAP reform as emergency legislation, Mendelson said it will allow the changes to take effect earlier and allow lawmakers to analyze the effectiveness before advancing permanent legislation, which he said he plans to do. 

While the emergency bill is being advanced, D.C.'s Department of Human Services said it is delaying opening the portal for next quarter's round of ERAP applications, which had been scheduled for Oct. 1. 

Tenant advocacy groups, including Legal Aid DC, have voiced opposition to the bill and to the delay in opening the portal, arguing it could hurt tenants in need of assistance and lead to more evictions. 

“There are some who are saying this legislation is like going to be a catastrophe and the end of the world. I don’t think so, but we will actually have several months of experience with this emergency legislation, which will enable us to craft — if we need — additional changes,” Mendelson said. 

Monday's briefing on the housing crisis was attended by representatives from several industry associations and owners of subsidized housing, including AOBA, SMOA, Enterprise Community Development, Local Initiatives Support Corp., National Housing Trust and WC Smith.

Enterprise Community Development President Janine Lind told Bisnow she is “very supportive” of the bill. She said it may take two to three months to see the impact of ERAP reform flow through the system, but she believes it will help solve the problem. 

“We believe it is a first step toward healing the financial crisis providers face,” Lind said. 

LISC Executive Director Ramon Jacobson also said it is a “great step.”

“It's truly an emergency situation that has gone unseen about how vast and deep the rent arrears problem is,” he said.