Councilmember Anita Bonds is planning to introduce legislation that appears to stop the "rent concession" scam, but in fact enshrines it in law. A draft of the legislation can be found here. Tenants should oppose it.
The rent concession scam hinges on the word "rent." Current law states that in rent-stabilized buildings, annual rent increases cannot exceed two percent plus inflation (CPI-W). Equity Residential and other corporate landlords have gotten around the law by claiming that the rent is as much as $1,500 per month higher than the rent that is actually paid. The companies often call this the "maximum legal rent" -- a term that does not appear in DC law. They base their demands for rent increases based on that vastly inflated higher number.
The Rental Housing Commission, in the case Gabriel Fineman v Equity Residential, ruled that "rent" is the amount the tenant pays. It also rejected Equity's claim that there can be a much higher "maximum legal rent," and that a "discount" (concession) can be applied in order to lure a tenant into renting an apartment. Fineman's victory should deal a death blow to the "concessions" scam, although Equity plans to appeal.
The legislation by Anita Bonds will give the landlords what they would have needed to win the Fineman case. It creates "maximum legal rent" and "discounted rent." In effect, it legalizes rent concessions.
The legislative aides writing the bill claim that members of the DC City Council demand that rent concessions be written into the law. They refuse to name those members.
The bill is misleading from its name to its core. It is titled the "Rent Charged Clarification Act," but it is not a clarification of existing law -- it is a radically re-writing of the law. To call this legislation a "clarification" states that Equity Residential and others were correct in their claim that there is a "maximum legal rent" to which a "concession" can be applied. But as the Rental Housing Commission has ruled, no such thing exists. This has been pointed to the drafters of the bill many times, but they have claimed that any discussion of either the name or the framework of the legislation is a non-starter because of the demands of the unnamed city council members.
The group writing the bill has tried to restrict concession leases at the same time that they legalizes them -- and to be fair they have done a decent job with a really, really bad idea. However, the draft bill opens the door to additional abuse.
Bonds and her staff claim that the Office and Apartment Building Association (AOBA) has had no influence on the bill, but it is clear that the legislation will serve industry interests. AOBA held a meeting in February to discuss the issue, stating in its announcement that "the use of concessions are an important tool for our industry."
Ironically, it would be easy to strengthen the existing law. Councilmember Bonds could write a very short "clarification" bill affirming what the Rental Housing Commission ruled -- that "rent" is the amount a tenant pays. However, instead she is planning to introduce legislation that will legalize concession leases. The many problems with this have been pointed out to her and to her staff many times over the past two years, both in person and in writing.
At the same time, Bonds has refused to take a public position on rent "concessions," and even though she is the Chair of the Housing Committee hasn't held a press conference, issued a press release, posted to Facebook, or even tweeted on the subject. Instead, she is planning to introduce legislation the legalizes rent concessions.
If the City Council won't introduce legislation to definitively affirm the Rental Housing Commission's ruling that "rent" is the amount a tenant pays, then it should drop the idea of passing legislation as long as tenants continue to win against large corporate landlords in court. Instead, members of the City Council and the Mayor would serve the residents of DC much more effectively by bringing public attention to this issue.