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DHCD Issues Proposed Regulations on District Opportunity to Purchase Act (DOPA)

Friday, December 22, 2017
Fulfills Another Recommendation from the Housing Preservation Strike Force

WASHINGTON, DC – A notice of proposed rulemaking to implement the District Opportunity to Purchase Act (DOPA) was published in the DC Register on Friday, December 22, 2017.

DOPA promotes affordable rental housing by maintaining the affordable status of existing affordable rental units as well as increasing the total number of affordable rental units within the District. To this end, DOPA requires rental property owners to provide the District with the opportunity to purchase housing accommodations consisting of five or more rental units, as long as a certain percentage are deemed “affordable.” DOPA is subordinate to the Tenant Opportunity to Purchase Act (TOPA).

A November 2016 report by the Housing Preservation Strike Force listed the implementation of DOPA regulations as one of six strategies the District should use to preserve affordable housing stock. The report noted that issuing the rules would allow the District to take greater advantage of the DOPA statue through the assignment of ownership to pre-qualified developers on an expedited basis.

Highlights of the proposed regulations include:

  • Amount of affordable housing preserved: At least 25 percent of the units would have to remain affordable below 50 percent of the area’s median family income (AMI); however, the proposed rules encourage higher numbers of affordable units and units affordable at higher and lower income levels.
  • When properties can be purchased from poor performing property owners: The proposed rules provide that the Mayor can purchase properties that the owner is offering for sale to other potential buyers and only after the tenants have been unable or have chosen not to exercise their TOPA rights within the prescribed timelines.
  • Coordination of DOPA and TOPA timelines: The Mayor does not have to wait for the TOPA process to end before starting the DOPA process. Under the proposed rules, the owner informs both the Mayor and the tenants of the decision to sell at a similar time, and the two timelines run simultaneously. However, the Mayor cannot exercise DOPA rights before the tenants have been unable or have chosen not to exercise their TOPA rights. The Mayor then has an additional 15 days to negotiate a sale and contract with the owner.
  • District management of properties it purchases: In the proposed rules, the District may assign its rights to purchase the property to a private developer that meets certain standards and selection criteria set by the DC Department of Housing and Community Development (DHCD). The developer would be selected through a competitive process.
  • Residents’ access to rental units the District purchases: In most instances the units will already be occupied by low income households. The proposed rules provide in the case of vacant units and unit turnover, tenant selection would: (1) occur at the property level; and (2) be done based on the funding requirements used to purchase the property and the covenant that the Mayor places on the property.

A 30-day public comment period ends on Monday, January 22, 2018. As part of this process, DHCD will host a briefing on Tuesday, January 9, 2018, at 10 a.m. in its Housing Resource Center, 1800 Martin Luther King Jr. Avenue SE. Agency representatives will be available to summarize the proposed changes to the regulations and answer any additional questions. To register, please visit https://tinyurl.com/DOPArulesbriefing or call 202-442-7100.

Written comments on the proposed regulations should be sent to Danilo Pelletiere, Department of Housing and Community Development, 1800 Martin Luther King, Jr. Avenue SE, Washington, D.C. 20020, or mailto:[email protected], not later than January 22, 2018. It is expected the rules will be finalized in Spring 2018.

Since coming into office, the Administration of Mayor Muriel Bowser has sparked the preservation or production of more than 9,600 affordable units, with another 3,300 units in preconstruction. In Fiscal Year 2017, the District made historic investments in affordable housing, getting more than $138 million in HPTF financing out the door to support 23 projects that will produce or preserve more than 1,900 affordable units. 

In October, Mayor Bowser announced that eight projects from the Spring 2017 RFP were awarded $75 million in HPTF financing. Those projects are anticipated to produce or preserve more than 500 affordable housing units and create about 70 PSH units. In September, the District was recognized for its multi-pronged approach to housing production and preservation, homeownership, and development of vacant properties when it was selected for the Urban Land Institute’s Larson Housing Policy Leadership Award.