D.C. Council Passes RENTAL Act, Reducing Eviction Notice to 10 Days in Bid for Housing Market Balance

Washington D.C. has enacted significant changes to its landlord-tenant laws, with the D.C. Council passing the "Rebalancing Expectations for Neighbors, Tenants and Landlords Act," or RENTAL Act. This legislative overhaul aims to address a burgeoning housing crisis, streamline eviction processes, and encourage investment in affordable housing, a move that aligns with recent commentary from philanthropist and former energy trader John Arnold regarding the need for greater balance in tenant protection laws.

John Arnold recently voiced his perspective on social media, stating, > "Maybe unpopular opinion but tenant protection laws went too far in many jurisdictions. Clever renters could game system & live 12+ months without paying. That loss isn’t absorbed by landlords, it gets baked into higher housing costs for everyone. Good to see DC seek more balance." His tweet underscored a growing concern among some stakeholders that overly stringent tenant protections can inadvertently inflate housing costs for all residents.

The RENTAL Act, passed by a 10-3 vote in the D.C. Council, represents a comprehensive effort to reform the District's housing regulations. Proponents argue the legislation is crucial for attracting housing investment and stabilizing the market, which has been impacted by a court backlog and a citywide crisis in unpaid rent. Mayor Muriel E. Bowser introduced the bill, initiating months of debate on how best to reconcile tenant rights with the concerns of developers and the real estate industry.

A key provision of the RENTAL Act is the reduction of the initial eviction notice period from 30 days to 10 days, intended to accelerate the process and address the substantial backlog in eviction cases. Carlos Gonzales, Chief Asset Management Officer at NHP Foundation, noted that his organization's D.C. portfolio accounted for 73 percent of all overdue rent by the end of 2024, making it difficult to secure loans. Anya Kamara of Somerset Development Company highlighted that some buildings faced over $1 million in rent arrears, impacting their operational viability.

The legislation also modifies the Tenant Opportunity to Purchase Act (TOPA), a decades-old law granting tenants the first right to purchase their building. Under the new act, newly constructed buildings will be exempt from TOPA for 15 years, a change aimed at reducing perceived burdens on investors. Matt Birenbaum, Chief Investment Officer at AvalonBay Communities, described D.C.'s TOPA law as a "unique constraint" that adds complexity and uncertainty for transactions, leading his company to sell off several buildings.

While some council members and tenant advocates, such as Amanda Korber of Legal Aid DC, expressed concerns that a faster eviction process could lead to more residents becoming unhoused, the Act includes safeguards, such as protections for domestic violence victims. The RENTAL Act seeks to create a more predictable environment for housing transactions, encouraging long-term investment while maintaining tenant protections, particularly by preserving TOPA rights for buildings with existing affordability covenants.