"It was the best of times, it was the worst of times, it
was the age of wisdom, it was the age of foolishness..."
– A Tale of Two Cities TOPAs
When District of Columbia Council Chairman Phil Mendelson introduced the Rebalancing Expectations for Neighbors, Tenants and Landlords (RENTAL) Act, there were high hopes that much needed reform to the Tenant Opportunity to Purchase Act (TOPA) was forthcoming. On July 9, 2025, Councilmember Robert White, Chairman of the Committee on Housing (COH), introduced amendments to the RENTAL Act (Amended RENTAL Act) that combined aspects of the RENTAL Act and the Common Sense TOPA Reform Amendment (CSTRA) Act. The COH approved the Amended RENTAL Act by a 3-1 vote.
The Amended RENTAL Act includes a 15-year blanket exemption for new construction, originally proposed as a 25-year exemption, if at least 51% of the units were rented by households earning less than 80% of the area median income (AMI). The Amended RENTAL Act includes an exemption for sales if the purchaser is willing to enter into affordable covenants restricting at least 51% of the units to households earning at or below 80% AMI for at least 20 years, but also includes elements from the CSTRA Act that would make TOPA transactions more, not less onerous. These elements include a new "TOPA Transparency Portal" and a 15-day "cooling-off" period during which the property owner (and affiliates) cannot negotiate with the tenants. Whether this will be the "best of times" or the "worst of times" remains to be seen.
The reasoning for these RENTAL Act amendments are noted in the COH Housing Report (see the full report here). The report noted that "evaluations of TOPA's success vary. While the original objective was to prevent displacement, today,tenants assign their rights to housing providers in 95% of transactions, often in exchange for building repairs, upgrades, or, more rarely, cash buyouts." (emphasis added). However, the report also states that "most TOPA transactions occur in smaller, older buildings—according to a recent study of TOPA transactions between 2012 and 2023, 88% of tenant association formations (a necessary step for TOPA to proceed) were in buildings with fewer than 50 units, and 96% of transactions occurred in properties built before 1978." (emphasis added).
The report tells a tale of two TOPAs, one for older, smaller buildings, the other for newer, larger buildings. In transactions for larger buildings, assignments of TOPA rights are rare (other than to the contract purchaser in return for large cash payments to tenants or building repairs, but almost always, cash buyouts or free rent). The issues are not negotiations for improvements to the resident experience, but rather negotiations for as much money as the tenants (or their lawyers) think they can get in return for releasing the transaction from protracted TOPA entanglements. In these newer, larger buildings, it is generally not low-income tenants who are receiving cash buyouts, but rather, tenants with more financial resources.
A one-size-fits-all solution will not work for these two types of TOPA transactions. To the extent that there are legitimate tenant concerns, they could be addressed by exempting from TOPA the sale of all buildings constructed after 1990 and containing more than 25 units, provided the sale is not for the purpose of converting to a condo or otherwise causing a displacement of tenants. This was the intent of TOPA when it was originally enacted. Perhaps some of the amendments to the RENTAL Act would be justifiable for smaller, older buildings, but for larger buildings of greater than 25 units, TOPA is an onerous ordeal that, per the report, "extends the average sale timeline by 5.3 months [and] deals can take up to one year longer than comparable deals in Maryland and Virginia. The delay, uncertainty, financial risk, and administrative complexity that TOPA adds to building sales has long been a thorn in the side of investors who often cite it as a leading reason they avoid working in D.C."
The report also notes the following:
The United States is facing a severe and persistent affordable housing crisis. Inadequate supply, rising construction costs, restrictive zoning laws, and economic factors like wage stagnation all contribute to the growing difficulty millions of Americans face in finding housing that is safe, stable, and within financial reach. The lack of affordable housing disproportionately impacts low-income households, contributing to homelessness and forcing too many to spend a significant portion of their income on housing....The shortage of quality and affordable housing is a nationwide challenge, but in the District, unique laws and structural barriers add extra weight to an already heavy burden. In the 2010s, a "skyline of cranes" set the District apart and showcased the city's growth and development. Today, the decline in crane activity is a visible warning sign of a severely strained market.
This housing crisis was the impetus for the current TOPA reform efforts. The Council correctly identified that TOPA has significantly contributed to the current housing crisis. However, it seems doubtful that the Amended RENTAL Act will result in a restoring investor confidence in the D.C. multifamily market.
The D.C. Council's first vote on the Amended RENTAL Act will be at the July 14, 2025, legislative meeting, where additional amendments may be proposed. If the Amended RENTAL Act passes on the first vote, the Council will have another opportunity to approve the second and final reading before the summer recess at the July 28 legislative meeting. After the bill passes on second reading, the Mayor has 14 days to sign, followed by a 30-day congressional review period, before it becomes law.
It is critical that the Mayor and Councilmembers hear from stakeholders that meaningful TOPA reform is essential to sustaining and attracting investment in the District's housing stock. The District is facing its first budget deficit in more than 30 years and has limited resources to invest in housing solutions. We will continue to work with stakeholders, including the District of Columbia Building Industry Association (DCBIA), to push for more comprehensive reform that encourages housing investment. Click here to contact Councilmembers. Additionally, you can join DCBIA at the Wilson Building, 1350 Pennsylvania Ave. NW, Washington, D.C. 20004 in Room 500 or online on the Council's Youtube page here.
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