Chairman Mendelson: D.C. Must Stop ‘Strangling’ Housing Providers By Preventing Evictions

D.C.'s top local lawmaker says legislative reform is needed to alleviate the crisis that has put housing providers at risk of shutting down as their tenants accrue tens of millions of dollars of unpaid rent. 

Council Chairman Phil Mendelson addressed the issue publicly for the first time Monday morning during a regular media briefing. He confirmed Bisnow's report last week that he is seeking co-sponsors for draft legislation to reform D.C.'s Emergency Rental Assistance Program, which industry leaders say has been used by tenants to delay eviction proceedings while not paying rent. 

Mendelson said he plans to introduce the bill “in the next couple weeks.” The council returned this week from a two-month recess, and the chairman said there are many bills he hopes to advance before the end of the year. 

He said he has spoken with affordable housing providers who support the draft legislation, called the Emergency Rental Assistance Reform Amendment Act of 2024, and he responded to new opposition that emerged over the weekend.

Jim Campbell, principal at affordable housing developer Somerset, said in an email that the bill is a “critical step” to begin addressing the crisis of rent delinquencies that “virtually all” affordable housing communities in the District face. 

“The delinquency crisis is seriously threatening the ability of affordable housing operators to meet basic operating expenses such as maintenance and mortgage payments,” he said. “Obviously, if mortgage payments are not met then there is a risk of foreclosure, which many, many affordable properties are facing.”

Two groups that work on behalf of tenants, Legal Aid DC and the Washington Legal Clinic for the Homeless, posted on the social media platform X that they oppose the draft bill because it would increase the likelihood of evictions for tenants who may otherwise have a path to staying in their homes. 

“I’m not surprised by the opposition because the idea of eviction is not a desirable goal,” Mendelson said. “However, we are not going to improve the housing situation in this city if we are strangling the provider market by preventing evictions.

“There has to be some adjustment toward the middle,” he added. “That middle is, yes, we help folks who need rental assistance, but at the same time we don’t require that essentially the burden be carried by housing providers — and again I’ll emphasize the affordable housing providers — to carry more and more debt.” 

The debt that landlords are carrying has reached the tens of millions. A report released in June by D.C.'s Apartment and Office Building Association looked at five large housing providers that own a combined 13,788 units in the city and found their combined rent delinquencies totaled $12.7M.

These delinquencies have ballooned because of lengthy delays in eviction proceedings — AOBA says resolutions take between twice and three times as long they did before the pandemic — caused in part by tenants filing applications for ERAP funds.

A pandemic-era change the D.C. Council made to the program stated a tenant couldn't be evicted while they had a pending application, removing a judge's discretion to weigh in on cases even for tenants that have racked up far more in debt than the program would cover.

Tenants are eligible to reapply for ERAP every quarter, which Mendelson said has allowed tenants to delay cases multiple times, even though some of them have debts of more than $10K. The number of applications rose by 125% over the last year, according to the Department of Human Services, which manages the program. 

“What the council did during the pandemic made sense during the pandemic, and it’s necessary that we make some adjustments to it now,” Mendelson said when asked about the change.

Mendelson said his bill would only allow one stay for a pending ERAP application per case and would require a tenant to show that ERAP could cover their full amount owed or that they have a payment plan agreement for the remaining debt. 

“Basically, what we’re getting at is it would not be possible to continue to game the system with applications that don’t pay the rent or go nowhere,” he said. 

Mendelson added that court delays are also caused by judicial vacancies. He said 20% of the D.C. Superior Court seats are vacant because of Congress not approving judges, and he called on federal legislators to move the confirmation process forward.

The reduced income landlords have seen from unpaid rent, combined with rising operating costs, has put many at risk of losing buildings and potentially leaving the market. The issue gained increased attention after D.C. developer Adrian Washington said last month he is shutting down his 25-year-old real estate firm, Neighborhood Development Co.  

Mendelson said he has heard from affordable housing providers that are halting investment in the District because they face millions of dollars in unpaid rent. 

“When I hear from these organizations ... that have said they’re just not doing any new investment in District, that means the creation of additional affordable housing units is going to slow down, and it’s because of these large rent arrearages that they’re carrying,” he said. 

He named four affordable housing providers he has spoken with who support the draft bill he has circulated: Mission First Housing Group, Jubilee Housing, Manna Inc. and Somerset Development Co. 

Mission First, Somerset and Jubilee confirmed to Bisnow that they are backing the legislation, while Manna didn't respond to requests for comment. 

Jubilee President and CEO Jim Knight said in an emailed statement that his organization “appreciates the Chairman’s efforts to address the challenges facing affordable housing developers and operators and believes this legislation is a step in the right direction.”

Mission First Senior Vice President Sarah Constant said in an emailed statement that the industry has reached “a tipping point.”

“Without ERAP reforms and addressing the issues of economic vacancies, we are at risk of losing critical affordable housing properties to foreclosure,” she said. “We are putting our valued residents, including those who have sacrificed to make their rent payments on time, at risk of losing their homes.”