Bull in Chinatown: Developer Tells Section 8 Tenants to Pay Up or Get Out
Last month, word spread among the residents of the Museum Square Apartments about a notice posted in the building informing them that they’d have to come up with $250 million or lose their homes. It wasn’t a ransom note or a mob warning, but to the tenants in the Mount Vernon Triangle residence, it might as well have been.
Everyone who lives at Museum Square, located at 401 K St. NW, receives a Section 8 housing subsidy from the federal government. Most of the residents are Chinese, and many are elderly, speak little English, and live on fixed incomes, often as low as a few hundred dollars a month.
“When we first realized that this was happening, we were panicking,” says Jianhong Wang, 76, who’s lived in the building for eight years. (Wang and the other Chinese residents spoke through an interpreter provided by the Asian Pacific American Legal Resource Center, which is representing the Museum Square tenants.) “We couldn’t sleep at night.”
Museum Square tenants receive a project-based Section 8 subsidy. The residents all pay 30 percent of their income; the U.S. Department of Housing and Urban Development covers the rest of the rent. The building’s Section 8 contract is set to expire on Oct. 1, and last fall, the property owner, the Bush Companies of Williamsburg, Va., informed HUD of its intent not to renew the contract. Bush, listed on some documents as W. H. H. Trice & Company, which appears to share the same address, followed up with the notice to the tenants in June naming the price they’d have to pay to stay.
Under D.C.’s Tenant Opportunity to Purchase Act, when a property owner sells a building, the tenants have the right of first refusal to buy it, either themselves or through an agent like a developer. Typically, this means they’re able to match whatever price is offered by a prospective buyer—a price determined by the market. But the Museum Square case is unusual because the building owner isn’t planning to sell the property, but demolish it.
The law governing tenants’ right to purchase a building heading for demolition is murky. Before forcing a tenant to vacate a residence to tear it down, the D.C. Code states, “the owner shall give the tenant an opportunity to purchase the accommodation at a price and terms which represent a bona fide offer of sale.” The law doesn’t elaborate on what makes an offer “bona fide,” or what the owner has to do to justify the price.
By any reasonable measure, $250 million appears excessive, particularly since the city assessed the property’s value at just $36 million this year. With 302 apartments in the building, mostly one-bedrooms, Bush’s price amounts to $828,000 per unit. Even for the luxury buildings that have popped up elsewhere in Mount Vernon Triangle, that’d be a steep price. For rundown Museum Square, it strikes some residents as impossibly high, aimed not at attracting an offer from the tenants but at making them leave.
That was the reaction Vera Watson, a 59-year-old Museum Square resident who’s lived there for 32 years, had when she saw the notice posted in the building. “I thought they were calling our bluff,” she says.
Even to native English speakers with a legal background, the notice would have been difficult to decipher; to most Chinese Museum Square residents, it was inscrutable. “THIS OFFER OF SALE IS ISSUED WITH THE INTENTION OF ISSUING A 180 DAY NOTICE TO VACATE THE HOUSING ACCOMOTATION [sic] FOR DEMOLITION PERSUAND [sic] TO D.C. CODE SECTION 42-3503.01(G)(1),” read the key portion, in all caps. There is no paragraph (g)(1) in that section of the code—and besides, section 42-3503.01 concerns a defunct tenant assistance program from 1987 that has nothing to do with the issues facing Museum Square. (The errors, unfortunately for the tenants, probably aren’t enough to invalidate the notice.)
Calls to Bush and Trice were not returned. Department of Housing and Community Development spokesman Marcus Williams writes in an email, “DHCD has questions about the offer of sale terms and other matters relating to the owner’s opting out of its affordability contract with the U.S. Department of Housing and Urban Development. This is currently an open investigation which prohibits us from disclose any further information on this matter.”
Mount Vernon Triangle is one of several D.C. neighborhoods where rapid development and rising rents have given developers an incentive to replace longtime tenants, either on Section 8 or protected by rent control, with new ones who will pay much more. Sometimes it’s done through buyouts, where tenants are offered a lump sum to relocate, allowing the landlord to jack up the rent. Other times, property owners file for a so-called hardship petition that permits them to increase the rent beyond the usual rent-control limits in order to ensure a certain profit margin.
But if the Bush Companies are successful in clearing out and demolishing Museum Square, it could represent a new way for landlords in changing neighborhoods to increase their incomes—using exorbitant offers of sale with few legal safeguards. And in this case, there would be another adverse, and likely irreversible, impact: the dissolution of a sizable portion of what used to be a thriving Chinatown.
Wang’s one-bedroom apartment is com-pact and spare, but she’s lent it a hospitable feel, with family photos displayed in every available space. It was family that brought her to D.C.: Her daughter lived here, so she and her husband, Xiannong Yi, 82, followed in 1998.
“There’s no one in China anymore,” she says of her family. “Everyone’s in America. We really value sticking together as a family.”
Wang and Yi initially lived with their daughter and son-in-law but realized it wasn’t customary in America, as it was in China, for parents to live with their adult children. So they moved, first to a market-rent apartment with help from their son-in-law, who paid the rent, and then to Museum Square in 2007 so they’d no longer be a financial burden.
But they don’t know what they’ll do if Museum Square is demolished and they have to move.
“I don’t even know where to start looking,” says Wang, who’s daunted by even the physical prospect of relocating, given that she suffers from high blood pressure and Yi has thyroid cancer. “How am I supposed to know which buildings are low-income?”
The residents are left feeling helpless and frustrated with their second-class status in D.C. “We may not seem cultured, but in China we were very cultured,” says Chuan Xiu Ye, 74, who lives downstairs and joins us in Wang and Yi’s apartment over Taiwanese pineapple pastries. Wang, she notes, is a former teacher and the author of several published books. “Here in America, that’s all irrelevant.”
As Museum Square, whose residents were once predominantly black, has grown increasingly Chinese in recent years, the surrounding neighborhood has moved in the opposite direction. Displaced by development and rising costs and attracted by the immigrant population in the suburbs, the Chinese-born population of Chinatown has dropped to just a few hundred. There’s no longer a full-service Chinese grocery store, so residents regularly pile into a bus bound for the Great Wall Supermarket in Falls Church. The most visible sign of the neighborhood’s Chinese heritage, apart from the iconic arch at 7th and H streets NW, is the Chinese characters that adorn all the businesses there—stores like Urban Outfitters and Walgreens.
Around half of the remaining Chinese population in the neighborhood lives in Museum Square. Most of the remainder live at the nearby Wah Luck House at 6th and H streets NW. Wah Luck is also a project-based Section 8 building; its Section 8 contract is up for renewal next year. The rising property values and rents in the neighborhood could entice that building’s owner, Denver-based apartment giant Aimco, to follow the Bush Companies’ lead and convert Wah Luck into pricey market-rate units rather than renewing the contract with HUD.
If the Museum Square residents manage to purchase the building and prevent it from being demolished, it won’t be on their own. Instead, they’d have to find a developer willing to shell out $250 million and come to an agreement with the tenants to allow some or all of them to stay while upgrading the building. That’s likely to be very difficult, even in a neighborhood undergoing such rapid changes.
“While developers would be interested in theory, the price is making it prohibitive,” says Julie Becker of the Legal Aid Society, which, along with the Asian Pacific American Legal Resource Center, is working with the Museum Square tenants. “I think it might otherwise be an extremely valuable project. But the price is just a huge obstacle.”
Even if a developer signs on, much of the Chinese population could be scattered. That’s because the developer would probably offer to undertake major renovations that could displace tenants temporarily, or offer buyouts to tenants in an effort to increase the rents in some apartments and turn a profit. Still, that’s better than sending every Museum Square tenant packing.
If the tenants can’t find a way to purchase the building, the D.C. Housing Authority would give them so-called enhanced vouchers, which allow them to remain in their building even if rents increase beyond the usual threshold for Section 8 subsidies. The trouble is that the building itself probably wouldn’t remain, so the enhanced vouchers wouldn’t do them much good. Instead, their vouchers would act like normal ones, enabling them to find housing elsewhere in the city, provided it falls under the rent limits allowed by the Section 8 program. Not only would the city permanently lose 302 units of affordable housing, but the Museum Square tenants would be thrust into a competitive market of voucher-holders and other low-income residents for the dwindling number of inexpensive apartments in the District.
That’s bad enough for the American-born residents of Museum Square, who’d likely have to vacate the central, safe, transit-accessible neighborhood for a more affordable one farther from downtown, after having endured much harder, scarier times in the once-impoverished area. “I’ve been here all my life,” says Khea Chambers, who’s lived at Museum Square for all of her 33 years. “I’ve been here when it was just dust. Who are you to tell me that it’s time to leave?”
But for the neighborhood’s Chinese community, the consequences could be more lasting. If Museum Square falls, potentially joined by Wah Luck, the Chinese population of Chinatown would all but vanish.
“I don’t want to dissolve this community,” says Yi. “If we leave, it will all fall apart.”
Photo by Darrow Montgomery