Housing Complex

Fee Cycle

Fee Cycle

For much of the 20th century, city planners and officials tackled endemic urban poverty with what seemed to them the most practical antidote. Up went massive housing projects in cities across America. The poor were housed, but they were also isolated, neglected, and surrounded by crime.

These days, we like to think we know better. No longer is concentrated poverty the answer. Instead, city leaders preach integration. Mixed-income buildings are sprouting up around the District. Lawyers and doctors live across the hall from bus drivers and unemployed single mothers. We pat ourselves on the back for our progressive and enlightened thinking, and for the most part, we’re probably right.

But from time to time, this grand experiment goes awry. And the poor people our city officials are trying to help end up paying the price.

Take Tanya Morris. From the elegant third-floor hallway of the Kenyon Square building in Columbia Heights, there’s no indication that her condo is any different from its neighbors. Morris, a low-income business analyst, lives among well-heeled professionals in the increasingly pricey neighborhood, but looking at the row of dimly lit doors, you wouldn’t see a bit of discrepancy.

Step inside, and a few differences start to become apparent. Instead of the hardwood floors most units have, Morris’ sports linoleum tiles. Rather than stainless steel appliances, her unit has a simple black stove, refrigerator, and microwave. She recently installed the granite countertops that most of the other condos came with.

Move into the living room, and something starts to seem amiss. Yes, the condo has the same layout as all the units above it, and it looks out onto an expansive patio. But somehow, a visitor is struck by the vague sense that the living room looks unusually, well, lived in.

That’s because it is. When Morris bought the two-bedroom condo in 2007, she was single and 38 years old, and she figured her family of one was as big as it’d get. Then she got married, had a child, and took in an elderly friend. Her talkative 3-year-old daugher, who carries around a blue stuffed monkey nearly as big as she is, occupies one bedroom. The friend, now a few months shy of 100 years old, lives in the other. And Morris and her husband sleep in the living room, taking turns on the nonfoldout sofa and an armchair.

Most families in this situation would simply move to a larger home. But Morris and her family can’t, at least not without tremendous difficulty.

Morris bought the apartment as a so-called affordable dwelling unit, part of a program used by the city in recent years to encourage developers to include affordable housing in new residential buildings in exchange for bonus density or financial incentives. (There are 56 buildings with ADUs in the city; Kenyon Square has 30 ADUs out of 153 total units.)

At the outset, it seemed like a good deal for Morris. She paid $213,600 for the condo, less than half the market price her neighbors were paying. Her condo fees are also lower than those of the market-rate owners, since they’re tiered by income level. (Morris falls in the 60 percent of area median income category.)

But since then, those condo fees have nearly doubled, from $284 a month when she first moved in to $535 now. On top of that, there have been periodic special assessments to replenish the building’s depleted reserves and pay for repairs to common facilities like the garage door and the sump pump. Some months, the assessment has been more than $170 for Morris.

Crushed by bills and crunched for space, Morris would like to sell her condo, but she can’t: Affordable dwelling units like hers come with covenants that severely limit the owner’s ability to sell the unit for a certain period of time—in Morris’ case, 20 years. If Morris sells before 2027, she’s required to find a buyer in her income range and to sell for no more than a price set by an affordable housing formula. The profit over the price she paid in 2007 would barely cover the closing costs, to say nothing of the money she’s put into maintaining the unit over the years. Plus she’d be ineligible for a new loan from the city for low-income homebuyers.

Renting out an ADU is likewise generally prohibited. When the Department of Housing and Community Development does allow it, the renter must be in the same income category, and the rent can’t be more than 30 percent of the renter’s income. That makes ADUs just about impossible to rent when the condo fees climb so high.

“Our covenant is for 20 years, which is, you know, a long time,” says Morris. “But when I purchased it, I was single, and I was 38 years old. So at that point I didn’t really foresee a whole lot changing. But it did.”

Now, despite her less-than-ideal living conditions, Morris has concluded she really only has one option: deal with it.

“I just decided that we have to tough it out,” she says. “My husband and I decided we weren’t going to have another child.”

Morris is far from alone in her predicament. Behind the gleaming facades of new condo buildings across the city, ADU owners are suffering from a combination of skyrocketing costs and an inability to get out.

A resident of the Chase Point Condos in Friendship Heights, who requested anonymity due to her law-enforcement background, has seen an even bigger increase in her condo fees, from $384 when she bought the place in 2008 to $813 now. That’s more than her monthly mortgage payments of $756. But for the time being, she’s not looking to sell it.

“I don’t have anywhere else to go,” the resident says. “And hopefully, if I can afford to hold onto it, when I die, I have a son, and I would want for this to be his place.” But if the condo fees hit $1,000 a month, she says, she’ll have to find a way to move.

“This program is an excellent program,” she says, “but it’s subject to abuse if there’s no oversight.” She wants to see the city monitor condo fees, and also points to shoddy construction and maintenance in ADUs. Her unit, she says, suffers from an uneven floor, bad electrical wiring, and cracked tiles.

Morris, too, complains of an unresponsive condo board that doesn’t sympathize with ADU owners’ protests over excessive fees and assessments. “The response has always been that this is the most equitable way they’ve come up with,” she says. “But the degree to which this is a hardship for people, I don’t think they’re completely aware.”

The ADU program is about to be joined by a cousin of sorts that could suffer from similar problems. The inclusionary zoning law, enacted in 2009, requires all developers of large new residential buildings to set aside a certain percentage of the units for low-income residents. The program got off to a very slow start amid the recession and legal challenges—D.C.’s first IZ unit wasn’t sold until this July—but the city expects more than 1,000 IZ units to be built in the next few years. Rather than having limited covenants, IZ units are set up to be permanently affordable. But the same condo fee issues apply, which could mean many more low-income residents could be blindsided by escalating costs in the future.

So what’s left to do? Sarah Scruggs of the affordable housing company Manna says the best option for DHCD might be to cut its losses by allowing ADU owners to sell their units at market rate, possibly splitting the profits with the city. The units would no longer be affordable—an admission of defeat for the city in its quest to promote affordable housing—but at least the ADU owners wouldn’t be stuck in condos they couldn’t afford.

“I would just like for them to let go of a lot of these and say, ‘This is a well-intended policy with some unintended consequences,’” Scruggs says. Absent that, she advocates a ceiling on condo fee increases for ADU owners and better public information to ensure that ADU purchasers know what they’re getting themselves into.

DHCD Director Michael Kelly, who declined to comment, met with Manna and ADU owners in August. His spokesman Marcus Williams says DHCD is reviewing concerns about ADUs and aims to “revamp the policies and procedures for the oversight of the ADUs.”

Not all ADU owners have horror stories. Carley Lester, a 32-year-old Department of Defense contractor, has owned an attractive, well-maintained ADU at the City Vista building near Mount Vernon Square for nearly five years. In that time, she says, her condo fees have gone up by only about $50. She credits a helpful condo board that’s established a valet service and lobby ATM whose revenues offset building maintenance costs.

But she knows things could get tough for her soon, thanks to the 20-year covenant on her condo. Two neighbors of hers have recently tried and failed to sell their ADUs. If Lester’s life situation does change, she says, she’ll think about selling the condo or renting it out illegally, in which case she’d run the risk of losing it. Unless DHCD alters its rules—which she’s hoped from the start it will—that’s a possibility she’ll have to consider.

“If I wanted to get married and have a kid,” she says, “I couldn’t possibly stay in this place.”

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