People’s Law Resource Center

A nonprofit organization serving the legal needs of the

people and communities in the Washington, DC area.

Understanding the District of Columbia’s

Newly Revised Rent Control Law

July 11, 2006

Revised 8/24/06

 

             The Rent Control Reform Amendment Act of 2006 replaces the previous the complicated rent ceiling system with a system based on the inflation rate, or specifically, the Washington, D.C., Standard Metropolitan Statistical Area Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).  D.C. Act A16-0391 (amending D.C. Code §§ 42-3502.01 et seq).  The new system generally allows the rent charged for any rental unit to be increased only once per twelve month period.  D.C. Code § 42-3502.08(g). 

 

Thus, for most people, the rent charged can increase once per year, by the inflation rate plus 2%.  Exceptions, details and further requirements are described below. 

 

Note:  References below to “D.C. Code § ____” refer to how the official District of Columbia Code will read after the new law is implemented and the Code is updated to reflect those changes.  It will take a little time before the printed and online versions of the Code are fully updated, but that in no way alters the effective date of the law. 

             The Rent Control Reform Amendment Act of 2006 was signed by the Mayor on June 16, 2006, and sent for a period of Congressional review; and it would have been effective on September 5.  However, the reforms were then passed again as “emergency legislation,” which does not require a period of Congressional review first.  Thus, the new rent control system became effective August 4, 2006. 

 

The Consumer Price Index

 

For most  tenants, the new rent control system limits increases in rent charged to slightly above the inflation rate, measured as CPI-W.  D.C. Code § 42-3502.08(g)-(h).  The language of the benchmark that the new system uses is “the adjustment of general applicability,” D.C.C. § 42-3502.08(h)(2), which is defined by statute as the CPI-W.  D.C. Code § 42-3502.06(b).

             The Consumer Price Index (CPI) measures the average change over time of prices for consumer goods and services in urban areas.  See U.S. Dept. of Labor. The CPI and the CPI-W are used to measure inflation, or the overall increase in prices of goods and services in the U.S. economy.  “The CPI reflects spending patterns for each of two population groups: all urban consumers (CPI-U) and urban wage earners and clerical workers (CPI-W). The all urban consumers group (CPI-U) represents about 87 percent of the total U.S. population.”  Id.  People living in rural or non-metropolitan areas are not included when calculating the CPI.  Id.  The CPI-W is based on a smaller group within the CPI-U, representing 32% of the total U.S. population.  Id.  Households included in the CPI-W have two distinct features: 1) They earn most of their income from clerical or wage occupations, and 2) Have been employed for over 36 weeks in the past year.  Id.

             By way of example, 4.1% was the annual change in the Washington, D.C., CPI-W from May 2005 to May 2006.  See Bureau of Labor Statistics Report.  Although the adjustment of general applicability will be calculated based on the annual CPI-W data from December 31, 2005, to December 31, 2006, per D.C. Code § 42-3502.06(b), it should be close to the May-May calculation of 4.1%.

            

Occupied Units

 

             The new system allows the rent charged for an occupied unit to be increased by the increase in CPI-W plus two per cent (often written as “CPI+2%”), but capped at 10%.  D.C. Code § 42-3502.08(h)(2). 

             Moreover, the rent charged for an occupied unit may be increased only once in every twelve month period.  D.C. Code § 42-3502-08(g).

             Disabled and elderly tenants get a cap on increases at CPI-W (not +2%), with a 5% maximum.  D.C. Code § 42-3502.08(h)(2).

 

Unoccupied Units

 

             There is a provision for raising the rent significantly for a unit that is unoccupied.  Among other things, this is intended to allow the landlord to “catch-up” to market rates once the unit is vacated by the elderly or disabled tenant who was exempt from higher annual increases.

If a rental unit is no longer occupied, the rent charged for the unoccupied unit may be increased in two ways: 1) by up to 10% of the current rent charged, or 2) to the level of rent charged for a “substantially identical unit” in the same building, as long as that does not result in an increase greater than 30% of the current rent charged for the unoccupied unit.  D.C. Code § 42-3502.13(f)(2). 

             When the unit becomes occupied, the housing provider is required to inform the new tenant of every rental increase within the preceding three years.  D.C. Code § 42-3502.13(d)(2).  The housing provider also must identify for the new tenant the “substantially identical unit” upon which any increase was based.  D.C. Code §  42-3502.13(d)(3). 

             An increase in rent charged for an unoccupied unit may take place within twelve months of an increase while the unit was occupied.  D.C. Code § 42-3502.08(g)(2).  However, an increase in rent charged while the unit is unoccupied precludes the housing provider from another increase in rent charged during the next twelve-month period, regardless of occupancy.  D.C.C § 42-3502.08(g)(3). 

 

Important Exceptions

 

             Similar to the old system, the rent charged may be increased by varying amounts and within twelve months of another increase if adjustment is needed for capital improvements (§ 42-3502.10), changes in services provided (§ 42-3502.11), hardship (§ 42-3502.12), substantial rehabilitation (§ 42-3502.14), or by voluntary agreement (§ 42-3502.15).  D.C. Code §42-3502.08(h)(1).  These exceptions are intended for special factual circumstances, and whether and by how much the rents can be increased depends on the specifics of each instance. 

 

Blocking Increases in Rent Charged Unless Landlord Is in Compliance

 

             As before, rent increases may not be implemented unless the unit and the common areas are in substantial compliance with the housing code and the landlord has provided the required notices (including the new information requirements) to the tenant and to DCRA.  The rent charged may not be increased by any housing provider who willfully violates any section of Title 42, Chapter 35, Subchapter 2, or fails to remedy those violations within 10 days of written notice.  D.C. Code § 42-3502.22(b)-(c). 

 

New -- Tenants’ Right to Information

 

             A new section of the Rent Control Reform Amendment Act of 2006 provides tenants and prospective tenants with a lot of information about the housing provider, including: a copy of the business license, a pamphlet published by the RA outlining tenant's rights and legal terminology, a list of all known housing code violations, and any rent adjustment petitions pending. D.C. Code § 42-3502.22. 

 

Furthering the D.C. Housing Strategy

 

             The new system also requires the Mayor to monitor and report on the state of disabled tenants, low-income tenants, and others under the Comprehensive Housing Strategy Act of 2003.  D.C. Code §§ 6-1054; 42-3502.23.  This should provide valuable information on the best means to assist qualified residents in finding and retaining suitable housing.  D.C. Code § 42-3502.23. 

 

Pending Petitions

 

             The new law specifies that all petitions for adjustment of rent that are filed before the new system begins will be decided "pursuant to the provisions of this title in effect prior to that effective date and may be implemented . . ."  D.C. Code § 42-3502.06.  Therefore, any landlord’s petition for adjustment or Tenant Petition challenging the rent demanded will be handled under the old system, if it was filed before the effective date of the new law. 

                                                    

Conclusion

 

             The new system greatly simplifies the mechanisms for calculating permissible rent increases.  D.C. Code § 42-3502.08.  Tenants are entitled to much more information regarding the unit they have rented, the accommodation which holds the unit, and the provider who runs the accommodation.  D.C. Code § 42-3502.22.  These two modifications should significantly aid tenants facing illegal increases in rent charged, and should deter providers from attempting inappropriate increases.

 

People’s Law Resource Center thanks Stephen Walls, a summer law student intern, for his work on this document.