D.C. Council Passes Emergency Bill To Address Unpaid Rent Crisis

The D.C. Council on Tuesday unanimously passed a bill aiming to address the crisis of unpaid rent and delayed eviction cases that has put affordable housing providers' financial stability at risk. 

The legislation to reform the Emergency Rental Assistance Program was passed as a temporary emergency measure, expediting the process to move it directly to Mayor Muriel Bowser’s desk for signature. Council Chairman Phil Mendelson said he plans to advance permanent legislation in the coming months that could address any issues that arise with the emergency bill.  

The mayor held a press conference Monday to voice her support for the bill and detail other actions her administration is taking to support housing providers.

Those actions include diverting $80M in Housing Production Trust Fund money — which otherwise would fund new construction or preservation — to provide bridge loans to prevent subsidized affordable housing properties from going into foreclosure. 

The ERAP bill would roll back some of the changes that were made to the program during the pandemic that city leaders say have caused delays in the eviction process. It would give judges more discretion over when to delay eviction cases because tenants have pending ERAP applications, and it would limit the number of stays tenants can achieve for the applications to one per case. 

Housing providers, the mayor and the chairman have all said some tenants are filing multiple ERAP applications to elongate the eviction process while racking up tens of thousands in unpaid rent, putting owners at risk of foreclosure. Bowser said Monday the total unpaid rent that housing providers are owed has reached $100M. 

“If some of these affordable housing providers get to the point where they cannot pay their mortgage debts, their properties will be foreclosed, these affordable buildings will be foreclosed and the affordable housing covenants will be extinguished,” Mendelson said during Tuesday's council meeting.

In a statement Tuesday evening, Bowser commended Mendelson for passing the “much-needed” legislation and said it represents a first step in fixing the affordable housing system. 

“Comprehensive, permanent legislation and continued robust investment in the system will be needed to protect our investments and progress,” the mayor said. 

While the issue has gradually worsened over the last two years, it gained increased urgency this summer. 

D.C.'s Apartment and Office Building Association released a report in June detailing the lengthy delays in eviction cases and the millions of dollars of unpaid rent that are putting housing providers at risk.

Affordable housing owner Neighborhood Development Co. announced in August it would be ending operations. Bisnow's investigation into this issue last month spurred additional calls for change and was cited in Mendelson's memo introducing the bill on Thursday.

“For a lot of folks, it feels like the council is feeling pressured to take an action,” Councilmember Charles Allen said during the meeting. “When I talked to housing providers the other day, I asked, ‘Why are we having to do this by emergency and not permanent legislation?’ and part of what the answer they said is nobody wants to be first to put their hand up to say we’re in really deep trouble, but over the summer, so many housing providers really realized that’s where they were.”

The council passed an amendment to the bill introduced by Councilmember Robert White, chair of the Committee on Housing. The amendment changed some language around ERAP documentation requirements and allowed the court to extend cases when a tenant hasn't received ERAP payments due to administrative delays. 

The amendment received pushback from the housing industry. Small Multifamily Owners Association CEO Dean Hunter emailed all council members Tuesday urging them to pass the bill without the amendment, which he said “will only result in further delays, exacerbating an already dire situation.”

Mendelson said during Tuesday's council meeting he supported White's amendment despite hearing concerns from the industry. He said the amendment was partially in response to concerns raised by representatives of the landlord-tenant courts who said the original bill could have made their process harder. 

“Life is not so simple in the legislative process, even though I get from the standpoint of messaging, it is sometimes easiest to say, ‘Adopt this without any amendments,’” Mendelson said. 

After the bill passed with the amendment, Hunter told Bisnow in a text message he is still pleased with the outcome. But he said additional steps are needed to prevent foreclosures and a "systemic collapse" of the D.C. housing system.  

AOBA also said in a statement Thursday that the organization is pleased with the version of the bill that passed, calling it a “significant first step” that it hopes will be followed by further action. 

Before voting on the bill, each council member spoke about the urgency of the issue and described their reasons for supporting it. Several members, including White and Councilmember Kenyan McDuffie — chair of the Committee on Business and Economic Development — called for additional measures to be taken in the coming months to protect D.C.'s housing system. 

“Without action, we really could see a wave of defaults and a loss of affordability covenants that could destabilize the very progress in affordable housing we've worked so hard to achieve,” McDuffie said. 

“We've got a lot more to do on this issue,” he added later. “So let us not leave here today thinking this solution solves our problem.”