Housing Complex

City Inquiries Shed Light on Museum Square Owner’s Reversal


Residents of the Museum Square Apartments at 401 K St. NW received a welcome bit of news earlier this week, when they learned that the building's owner had reversed course and withdrawn its stated intention not to renew its Section 8 contract—the arrangement that provides federal subsidies to the building's all-low-income tenants.

Earlier, the owner, the Bush Companies of Williamsburg, Va., had informed tenants that it would demolish the building unless they could come up with $250 million to buy it. The tenants, most of whom are Chinese, found that price arbitrary and excessive, as did At-Large Councilmember David Catania, who drafted legislation to cap the amount developers can charge residents under the Tenant Opportunity to Purchase Act when demolishing a property.

So what pushed Bush to allow the Section 8 tenants to remain, at least for the time being? According to the Department of Housing and Community Development, it was a combination of those efforts and pressure from DHCD itself.

"We believe that the owner’s inability to sufficiently respond to the government’s requests, housing preservation advocates' concerns, and lack of tenant involvement has informed their decision to rescind the notification to opt out of the Section 8 contract," says DHCD spokesman Marcus Williams in an email.

On July 15, six days after the online publication of a Washington City Paper story on Museum Square and five days after Catania announced his intention to address the situation through legislation, DHCD sent a letter to to Bush's attorney, Richard Luchs, raising two principal concerns over Bush's handling of Museum Square. First, Rental Conversion and Sale Administrator Lauren Pair wrote to Luchs, the $250 million offer of sale "does not appear to be bona fide," as required by D.C. law. Second, Bush did not inform the city government of its intention to opt out of federal housing assistance.

Luchs comes to the Museum Square fight as a decorated veteran of such battles. A 2006 Washington City Paper profile titled "The Painmaker" called him "the most feared landlord's attorney in the District." His frequent—and frequently successful—efforts to help landlords sidestep tenant protections led the Department of Consumer and Regulatory Affairs to launch a 2005 probe into whether he evaded TOPA, the D.C. Council Committee on Consumer and Regulatory Affairs to subpoena him, and Adams Morgan activist and perennial Council candidate Bryan Weaver to refer to him as "a bloodsucking scumbag." Luchs could not be reached for comment.

The definition of "bona fide" is left vague in the TOPA law, and Luchs argued to DHCD that a 2003 court case involving the Phillips Collection—generally regarded as the only D.C. court ruling with bearing on the question of bona fide TOPA offers—allowed property owners leeway to charge a sale price based not on the property's appraised value but on its potential value for future development. But Pair responded on July 25 that the cases are far from identical, that the $250 million price vastly exceeds the property's $36 million assessed value or any likely fair market value, and that Bush had failed to provide an adequate justification for the price it was asking.

Luchs also asserted that DHCD lacked the authority to take action on the case and qualifications to weigh in on the property's bona fide value. Pair disputed both of these contentions in her July 25 later. A week later, Bush informed the U.S. Department of Housing and Urban Development of its decision not to opt out its Section 8 contract renewal.

"We are very pleased with this outcome," writes Williams. "We believe that the owner rescinding its notification to opt out of the Section 8 contract is a satisfactory outcome of a collaborative effort of various District of Columbia government  agencies, housing preservation advocates, and most importantly, the tenants."

Photo by Darrow Montgomery

  • arenter

    Great. But is there anything that prevents the landlord from doing it again in six months or a year, with more care to filing the right paperwork? Or did the landlord make a long-term commitment?

  • alocalresident

    Why should the landlord make a long-term commitment? They have every right to keep pace with development projects in the neighborhood and take advantage of the rising prices of real estate in the area. I hope that this is short-term for the sake of those in the local area. That building is a huge eyesore.

  • Statehood Warrior

    The property owner should consider developing a new, nearby Section 8 building for the residents and then proceed with a redevelopment plan for the Museum Square site that is way underutilized and presents a huge economic development and job creation opportunity for the City.

  • DC Landlord

    This is exactly why I only rent to high earning tenants with excellent credit >725. Every freeloading wannabe in DC like the folks who live in this building (and many more) thinks they are entitled to to free or highly subsidized rents, in now expensive neighborhoods in perpetuity and the DC system is set up to enable them.

    This building is a "hot mess" in the middle of some of the Districts most expensive and in demand real estate. It is filled with people who have been here for decades and still can't speak a word of english, and who get free, or nearly free rent, on top of food and healthcare subsidies.

  • Northwesterneer

    Statehood Warrior- why don't the residents move out of the high-rent area to a low-rent area? Why should anyone build section 8 housing in a high rent area when the residents will just turn around and sublet their rent controlled apartments to people willing to pay market rate?

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