Press Release: AG Racine Announces First-Of-Its-Kind Settlement Keeping Apartment Complex Affordable for 25 Years & Preventing Displacement of Ward 5 Tenants
By Press Release
News Release — DC Office of the Attorney General
FOR IMMEDIATE RELEASE:
December 19, 2022
Office of Communications
Settlement Includes 25-Year Affordable Housing Covenant, Requires Landlords to Renovate & Pay $1,000,000 to District
WASHINGTON, DC – Attorney General Karl A. Racine today announced that the Office of the Attorney General (OAG) has reached a first-of-its-kind settlement that will stop the planned displacement of long-time District residents and preserve affordable housing at a Ward 5 property for 25 years.
This settlement resolves a lawsuit OAG filed in early 2022 to protect tenants at the rent-stabilized Hawaii-Webster Apartments from unsafe and unlawful conditions, and to stop them from being pushed out of their homes by market-rate redevelopment. In its suit, OAG alleged that the property owners were intentionally neglecting the property and forcing tenants to live with hazards like mold, crumbling lead paint, and pervasive infestations of vermin. As a result of the suit, the owners have made significant repairs to the property. Under the terms of the settlement, the property owners, to their credit, will complete renovations and pay $1,000,000 to the District—the majority of which will be used to provide restitution to tenants. Significantly, the property owners also signed a historic binding affordable housing covenant, which requires the property to remain rent-stabilized for 25 years, regardless of any ownership changes. This is the first time OAG has used an affordable housing covenant as part of a resolution in a housing case.
“This resolution is a major victory for the tenants and for affordable housing in the District, and it strikes yet another blow against an illegal and immoral business model that drives long-time residents out of their homes,” said AG Racine. “Over the past eight years, my team has fought alongside District tenants and stood up to landlords and developers who sought to profit from breaking the law. With this lawsuit, we have already secured safe living conditions for more than 50 families. Now, this settlement puts money back in these families’ pockets and puts a permanent stop to a development plan that would have displaced the tenants. Instead, these residents—and dozens of others—will continue to have access to affordable homes through a covenant that will stabilize rent at this complex for 25 years.”
“Since the Attorney General’s Office filed this lawsuit, I have seen many positive changes at our apartment complex,” said Fatima Guadardo, a tenant at the Hawaii-Webster apartments. “Before, my family had a bad experience living here—we had water leaks and mold in our apartment, and we lived with rats and cockroaches. Even with all these issues, we paid our rent each month. Now, things are much better – those problems have been fixed and this settlement will help bring a measure of justice for all we went through. We work hard, but we can’t afford to pay much more in rent, so it gives me peace of mind to know that our rent won’t go up much in the coming years.”
During AG Racine’s tenure, OAG has used District law in innovative ways to fight for the rights of tenants, often resulting in significant victories. AG Racine has filed dozens of lawsuits under the District’s Tenant Receivership Act (TRA) to force landlords to fix pervasive and dangerous housing code violations at their properties, and has also enforced Consumer Protection Procedures Act (CPPA) to recover more than $6 million in rent refunds for tenants who were harmed.
In January 2022, OAG filed suit against the owners and managers of an 88-unit apartment complex at 65 through 97 Hawaii Avenue NE and 66 and 98 Webster Street NE (“Hawaii-Webster Apartments”) in Ward 5, alleging that the owners actively neglected the property to force working-class families out of their homes and make way for redevelopment. OAG’s lawsuit detailed how the complex was sold in 2020, and the new owners failed to perform basic maintenance and forced tenants to live without heat and with water leaks, mold, rodent and bug infestations, and crumbling lead paint. In April 2021—as tenants’ living conditions worsened—the owners submitted an application to the Board of Zoning Adjustment to redevelop the property into market rate condominiums and rental units. Only 16 of the 134 apartments in the planned redevelopment were going to be affordable units. Tenants living in the 52 occupied units—many of whom are working class families with young children, older adults, and immigrants from Latin-American countries—suspected that their landlords were neglecting the complex to displace them.
In February 2022, shortly after OAG filed suit, the building’s owners and managers changed course, and installed new boilers, restored functioning heating, and remedied fire safety hazards. Shortly thereafter, they entered into a court-supervised abatement plan, under which they swiftly remediated mold and lead-paint hazards and brought in a pest control company to treat begin regular treatment and ongoing maintenance across the property. Since then, they have restored the property to habitable condition and agreed to complete additional renovations.
Under the terms of a settlement agreement that resolves the litigation, Solid Brick Ventures LLC, the owners and managers of the Hawaii-Webster Apartments, will:
- Preserve affordable housing at the property for 25 years: The owners of the Hawaii-Webster Apartments signed an affordable housing covenant that will keep all units at the property rent-stabilized for 25 years. This covenant is a binding legal agreement that runs with the land, meaning that even if the property is sold or ownership is transferred, the agreement still applies. All 88 apartments at the property are currently rent-stabilized, but the property’s owners had previously planned to redevelop it into high-end condos. As a result of the agreement, the apartments will remain affordable rentals, and for the next 25 years, rent will only increase due to inflation or after vacancies. This is the first time OAG has used an affordable housing covenant as part of a resolution in a housing case.
- Pay $1,000,000: The property’s owners must pay $1,000,000 to the District after completing the sale of two vacant buildings at the property to affordable housing developers who will also be subject to the affordable housing covenant. The majority of these funds will be used to provide rent refunds to current and former tenants who were forced to live in dangerous and illegal conditions. The remainder will go to cover some of the costs of the District’s litigation.
- Complete renovations and ongoing maintenance: The owners have offered all tenants the option of full renovations to their apartments in addition to the required repairs that have already been made. Within 30 days of the settlement, the owners must submit a renovation plan to complete any renovations and relocate tenants while they take place. The owners are also required to continue to maintain the property under the terms of the previous abatement agreement and as required by DC law.
A copy of the settlement agreement is available here.
This matter was handled by Assistant Attorneys General AAGs Chris Peña and Lily Bullitt, with extensive support from Conny Tello, Althea Geletka and Cullen Hamilton, and investigations by Willie Haynes and Ashley Norman, under the supervision of Section Chief Jen Berger of the Social Justice Section of OAG.
Resources for Tenants
OAG works to make sure residents across the District have access to safe and affordable housing and holds landlords accountable if they violate the law. Access OAG’s resources to help renters and tips on how to report problems with your landlord or your housing conditions.
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