Ana Vilma Vasquez wasn’t accustomed to so much company. It was a Sunday in early October, and half a dozen people were packed into her small bedroom, among them two candidates for D.C. Council. Vasquez spoke animatedly about her experience at 2724 11th St. NW, visibly excited to have so much interest in a building that normally suffered from neglect. She spoke mostly in Spanish, but threw in a few clipped English phrases when she didn’t want to wait for her interpreter, an organizer with the Latino Economic Development Center, to translate.

Vasquez had a litany of complaints about the management of the Columbia Heights building, where Jallow also lives, but chief among them was the rats.

She showed her guests the rat bite marks on her TV cable, and the one on her left ring finger. She showed them the long sticks she uses to fight the rodents. One had a tangle of rat hairs caught in the tip. “Big,” she said, switching briefly to English. “Lot of rats.”

Management, she complained, was not responsive to requests for rat control and other repairs, like fixing the cracked walls to which she’d taped plastic sheets to protect her son from the flaking paint. “They tell me, ‘You’re not the owner. If you don’t like it, go,’” she said in Spanish, then added in English, “Bye bye!”

The gathering, organized by LEDC and other housing advocates, wasn’t aimed primarily at addressing the poor conditions at the low-income building, which had persisted for years. Instead, the goal was to protest a hardship petition.

When the District enacted its rent-control law in 1975, it included a provision to ensure profits for landlords of rent-controlled buildings by allowing them to petition for higher-than-normal rent increases if they faced a financial hardship. The so-called hardship petition permitted landlords to raise rents enough to make an 8 percent return on their investment in the building. Over the next decade, with the city’s population declining and city officials worried that housing providers might get out of the game, the D.C. Council twice raised the hardship threshold, settling on 12 percent in 1985.

Landlords can now file a hardship petition whenever their annual profit falls below 12 percent of the equity they have in the building, and raise rents by whatever amount is needed to hit that 12 percent. At 2724 11th St., the owners, led by Ellis J. Parker III, requested a 31 percent rent hike in order to reach a 12 percent return on investment. The city granted the petition in July, though the tenants have so far refused to pay the increased rent and have challenged the petition on the basis of alleged technical improprieties and a long list of housing code violations. (Parker declined to comment for this story. His daughter-in-law, Jennifer Parker, conceded to the Board of Zoning Adjustment in November that “the building is in disrepair,” but denied that the problems were as severe as tenants allege. “There is a rat problem in D.C.,” she said. “It is not 2724 11th Street.”)

Jallow, a native of Gambia in a building full of immigrants, has as many grievances as Vasquez. There are rats, mice, and roaches in his apartment, he says. He long complained about water leaks and a crumbling ceiling, he says, but it wasn’t until the bathroom ceiling collapsed on his head while he was taking a shower that the management company took steps to fix it.

Jallow pays $599 a month for his efficiency. (He’s lived in the building since 1999; under rent control, longtime residents tend to pay less than more recent arrivals.) The hardship petition would raise his rent to $786. That’s still well below market in a neighborhood where studios go for more than twice as much, but it’s beyond Jallow’s means. Should the challenge to the hardship petition fail, he says he’ll have to move.

The threat of displacement from hardship petitions isn’t limited to very low-income tenants like Jallow and his neighbors. Just a mile separates 2724 11th St. from 2727 Adams Mill Road NW, due west in Lanier Heights, but the difference in living conditions is obvious from a quick glance. The Adams Mill building, known as the Zoo Gate, is perched at the edge of Rock Creek Park, facing a driveway into the National Zoo. Its modern brick architecture, lined with balconies, would be at home in postwar European neighborhoods. Monthly rents, limited by rent control, range from the high $700s to the low $1,400s.

But the Zoo Gate tenants face the same predicament as the 11th Street residents. The building is also owned by the Parkers, and managed by the same company. And the tenants’ future there is likewise challenged by a hardship petition.

Usually, rent at the Zoo Gate goes up each May 1. This year, tenants received notice that the rent wouldn’t increase. “We all thought, ‘Oh wow, that’s nice,’” recalls Myers, who’s lived there for 39 years. Then, in early August, came the letter from the Rental Accommodations Division informing residents that the building owner was seeking a hardship petition to increase rents by up to 45.4 percent in order to make a 12 percent return. “We were all in shock,” says Myers. “There was no advance warning.”

The Zoo Gate residents are challenging the petition—although they didn’t qualify for pro-bono assistance because their incomes are too high—on a number of grounds. The Zoo Gate Tenants’ Association’s “exceptions and objections” to the petition, filed on Nov. 12 by a lawyer from the D.C. Tenants’ Rights Center, argue that in tabulating their costs to justify the petition, the Parkers claimed extraordinary expenses and capital improvements as ordinary operating expenses. In particular, they point to one vacant apartment, where residents say the owners installed marble countertops and new appliances, not present in any other units. Higher costs mean lower profits, allowing the owners to request bigger rent increases to reach a 12 percent return. The tenants also claim many housing code violations, from a mouse infestation to cracked walls to the building’s front door, which can usually be yanked open without a key, leading homeless people to sleep inside periodically.

Even if Zoo Gate tenants mostly have higher incomes than their 11th Street counterparts, many still expect they’ll have to leave if the petition stands. Etta Klosi, an immigrant from Albania who’s lived in the building for 11 years, says she’d gladly pay an extra $150 a month for new appliances and windows, and to fix her balcony’s broken door and crumbling ceiling. But she can’t afford a 45 percent increase.

Klosi’s worries stem partly from the history of the property manager, a man named Stan Ford. In at least one rent-controlled building Ford managed, in the mid-2000s, the owners paid Ford $2,500 for every apartment that became vacant, so that the rent could increase, according to a 2008 Washington Post story. That would have given Ford, who was supposed to be making the building as livable and appealing as possible, an incentive to do otherwise. Ford acknowledged at a 2006 D.C. Council hearing that he collected $75,000 from the owners, who included Ellis Parker, for clearing 30 apartments. The building, located at 1846 Vernon St. NW in Adams Morgan and populated mostly by Bangladeshi immigrants, was gutted by arson in 2006. All the tenants left, and the owners sold the building for $4 million. Authorities never charged anyone in the arson.

To residents of the Zoo Gate and 2724 11th Street, also managed by Ford, history seems to be repeating itself. Their complaints are eerily similar to those of Vernon Street residents, who also reported water leaks, crumbling walls and ceilings, broken security doors, and, yes, big rats. Ford, who declined to comment for this story, hasn’t been as explicit as he was on Vernon Street, where he knocked on doors and offered tenants hundreds or thousands of dollars to leave. But residents at the buildings he currently manages say they’re getting the message.

“I’m terrified because of Stan Ford’s history,” says Klosi, who claims Ford and the owners have never invested proactively in the building and only step in when things are broken. “He’s their pitbull.”

The Zoo Gate tenants, like others facing hardship petitions, were amazed to learn that landlords have a right to seek a 12 percent rate of return. “Who on earth is guaranteed a 12 percent profit?” asks Klosi.

That question irks Shaun Pharr, who represents housing providers as senior vice president at the Apartment and Office Building Association of Metropolitan Washington. “That canard, I’m just so tired of hearing it,” he says. There’s no guaranteed 12 percent profit, he argues, since landlords will receive the full amount requested in a hardship petition only if the market will bear it. If current or future tenants aren’t willing to pay the higher rents, the landlord has to settle for a smaller increase. (Of course, that won’t help tenants who were compelled to move out when confronted with the initial rent hike.)

Pharr argues that these severe housing code violations wouldn’t have arisen had the city enforced its code adequately. (Nor, though, would they have come up had the landlords maintained their buildings properly.) But when situations like those at 2724 11th St. and the Zoo Gate occur, he says, landlords need some way of paying for improvements.

In 2006, the city amended its rent-control law to eliminate a convoluted rent-ceiling system and cap increases on vacant units. In exchange, housing advocates made a concession to providers, allowing the maximum annual rent increase on occupied units to rise from the rate of inflation to inflation plus 2 percent. According to Pharr, that wasn’t enough to allow property owners to make the necessary investments in their buildings, in a city where two-thirds of the rental housing stock was built before 1960.

“We acquiesced,” Pharr says of the 2006 change. “We never really thought it was going to be adequate. And eight years later, it’s catching up.”

He predicts, “You’re going to see an increasing number of housing providers turning to the hardship petition as the years go on and [inflation] plus two proves inadequate.”

As the use of hardship petitions has increased over the past decade, the use of another petition type has declined. Capital improvement petitions allow landlords to increase rents for up to eight years to pay for major repairs and upgrades. They’re less attractive to many property owners than hardship petitions because they’re temporary, but they can still be brutal for tenants.

The only one filed in 2014, according to city records, was for a 42-unit building in Columbia Heights, at 3501 13th St. NW. The developer Urban Investment Partners bought the building out of bankruptcy for $6 million in May. A month and a half later, UIP filed a capital improvement petition seeking to raise each tenant’s rent by $991.55 per month, or an average of 93 percent, over the course of eight years. That surcharge, UIP stated, would cover the cost of renovations that would replace the “antiquated” elevator and “outdated” appliances, improve energy efficiency, and “enhance the comfort” of the building.

For Lynch, who had lived in the building for seven years, the letter from the city in September informing him of UIP’s plan to raise his rent from $1,013 to $2,005 was a bombshell, given that the company hadn’t communicated with him since taking over the building. (Renee Fitzgerald, president of the tenant association that building residents formed in September in response to the petition, calls UIP “a ghost company.”)

“The first salvo has been, ‘Hey, we’re going to double your rent,’” says Lynch.

Except that’s not UIP’s intention. “Petitions are not good things in my mind,” says UIP principal Steve Schwat. “I think they force the tenant and the landlord to fight.” Instead, he hopes to use the petition as the opening move in a negotiation. Schwat wants to work out a deal with the residents of 3501 13th St. that will protect them from rent increases and offer lucrative buyouts to anyone willing to leave. UIP has yet to approach the tenants; Schwat says the company is waiting for the tenants to retain legal counsel and start the conversation.

The kind of deal Schwat has in mind, the kind UIP has been undertaking throughout the city, is indisputably good news for tenants like Lynch who thought they’d be forced out by skyrocketing rents. It’s also good for UIP, which uses the buyouts to clear out low-paying tenants and then increases the rent on future residents, increasing profit margins.

The appeal of these so-called voluntary agreements is obvious. And to some affordable-housing advocates, that’s precisely what makes them so dangerous.

In the corner of Schwat’s office, across from the ceremonial hardhats and the rows of family photos, stands a sign with a two-word admonition: “Manage Aggressively!”

UIP’s new headquarters on Q Street NE, like the company’s development strategy, blends the old and the new. The brick walls and exposed ducts are complemented by recent finishes, fresh paint, and modern furniture. The views from the third-floor offices encompass the full gamut of the changing adjacent neighborhoods: the rusting industrial facilities along the train tracks; the vaguely space-age 2008 Bureau of Alcohol, Tobacco, Firearms, and Explosives headquarters in NoMa; the newer Trilogy apartment buildings that have upsized Eckington.

UIP’s business model revolves largely around making the old new, courtesy of voluntary agreements. The company buys a building and offers tenants an attractive deal: If you want to stay, you get to, at your current rent. If you want to leave, we’ll pay you. We’ll upgrade the building’s hardware and common spaces. And all you have to do is give us permission to increase rents on future tenants by an amount beyond what’s typically permitted under rent control.

If at least 70 percent of tenants sign the agreement, it goes to the city for approval. The units remain under rent control, with annual increases limited to inflation plus 2 percent, but starting from a much higher baseline. Plenty of D.C. property owners have taken advantage of voluntary agreements to raise rents and make building improvements, but Schwat, who calls himself an “avid fan” of the practice, is its most vocal exponent.

With hardship petitions, Schwat argues, “Your choice is pay an extra 20 percent, or move out.” With a voluntary agreement, tenants have multiple options. First: “They can stay, they do nothing, their rents will stay exactly as they are, but we will renovate the building and upgrade the building.” Second: They can opt for additional upgrades to their apartments, at extra cost. Third: “‘Renovation? Pfft, I’m not living through a renovation. I’m outta here.’ No problem, I’m going to give you a buyout.”

He adds, “They have a choice. I haven’t thrown them out of their apartment.”

The Office of the Tenant Advocate, a D.C. government office aimed at protecting tenants’ rights, has argued that the use of voluntary agreements to protect current tenants but raise rents for future ones is a violation of the rent-control law and a perversion of its intent. In 2012, OTA questioned the approval of a voluntary agreement using this model on Dupont Circle’s Swann Street NW, but the D.C. Rental Housing Commission upheld the agreement out of deference to the office that approved it. Since then, the use of this type of agreement has grown increasingly common.

“To say that you have to wipe out 70 percent of a building in order to realize a profit is far-fetched,” says Chief Tenant Advocate Johanna Shreve. She also worries that the “win-win” UIP touts doesn’t apply to all tenants, citing the example of two buildings UIP purchased in Petworth in 2010, where vacant units got an expensive renovation but remaining tenants had to contend with disruptive construction and saw no improvements in their apartments.

“The problem was, the people who lived there did not benefit from the upgrades,” Shreve says. “Their apartments remained in whatever state they were. And the other units in the building were upgraded. Where’s the quid pro quo there?”

Still, in many cases, there are clear benefits to existing tenants, whether they take a buyout or stay under their current rents. At the same time, once-affordable units often become permanently more expensive. That places tenant advocates in a bind, as they weigh tenants’ well-being against the preservation of the city’s shrinking affordable-housing supply.

“Preventing displacement is the most important part of rent control, so in that sense, it’s working,” says Phil Kennedy, an organizer with LEDC who works with the tenants of several buildings facing petitions. “But keeping the stock of affordable housing seems like it should be another goal of rent control. And that does get lost in future tenant increases. You’d like to have both at the same time. If you only get one or the other, I definitely take preventing displacement.”

Schwat reserves a special kind of ire for housing advocates who approach that balancing act the other way. “The ‘affordable housing advocates’”—he has a habit of forming scare quotes with his fingers as he utters those words—“they don’t want a voluntary agreement. A voluntary agreement is bad. The advocates come in and say, ‘These guys are going to increase the rents on your neighbors.’ By the way, that’s a lie. I’m not raising the rent on anyone at the building.”

Eric Rome, probably the most prolific tenant lawyer working on voluntary-agreement deals, has the same scorn for advocates who oppose them, and the same habit of referring to them as “quote ‘affordable housing advocates.’” In a 2008 Council hearing on legislation that would have restricted voluntary agreements, he complained that “a minority of vocal activists have hijacked the legitimate tenant agenda” and that “those that dare to…support voluntary agreements and tenant rights to self-determination are branded traitors, shills, sell outs, or worse.”

Rome disputes Shreve’s contention that voluntary agreements weren’t intended to pit current tenants against future ones. “Voluntary agreements were intended to allow landlords and tenants to work together so that the tenant rents can remain affordable and the landlords can get enough money to keep up the building and to improve the building,” he argues. “If that mechanism was to be solely placed on the backs of current tenants, it wouldn’t work. You can’t generate enough money for that. How could part of it not have been to allow owners to make more money as units turn over?”

Rome says he’s obligated to do what’s best for his clients but acknowledges that the existing policies might not be good for the city’s overall housing priorities. He would support tweaks to ensure that a portion of apartments in voluntary-agreement buildings are set aside for low-income tenants. He also sees a need to differentiate between buildings that are already unaffordable to working-class tenants, where voluntary agreements aren’t really removing affordable housing, and those that are truly losing affordability through these deals. In his experience, Rome says, he sees more voluntary agreements in wealthy areas like those west of Rock Creek Park than in up-and-coming neighborhoods where they cost the city affordable housing.

The numbers, though, don’t bear that out. Of the 20 voluntary agreements filed this year through early November, just two are west of the park. By contrast, four are in Columbia Heights, two in Petworth, and three in Brightwood Park—all among the neighborhoods whose affordability is most threatened by rapidly rising housing costs.

The trouble with the debate over voluntary agreements, with one side pointing to tenant benefits and the other alleging city losses, is that they’re both right. This is a classic tragedy-of-the-commons scenario, where what’s best for the individual actors—rent protection in exchange for higher costs for future renters, or buyouts—is bad for the overall class of D.C. renters, who see the supply of housing that’s affordable to them whittled away. In the long run, even when they win, they may end up losing.

The need for some sort of tweaks to the rent-control law is one area of near-universal agreement. In October, Muriel Bowser, who chairs the Council’s housing committee, held a hearing on a package of bills to reform rent control. Among other provisions, the legislation would cap rent increases for seniors and disabled tenants; reduce the maximum rent increase for vacant units to 1 percent multiplied by the number of years the previous tenant lived there; and reduce the hardship-petition rate of return from 12 percent back to 8 percent. Voluntary agreements would require a cost justification and would no longer be allowed to apply selectively to certain tenants, unless approved by the rent administrator.

Landlords and their representatives excoriated the bills. Michael Miller of the Gelman Management Company said that providers’ expenses have grown faster than rents in recent years. Vincent Mark Policy, a prominent landlord attorney, declared that “there is no future in rental housing” if the proposals pass.

Bowser, now mayor-elect, has decided not to bring the measures to a vote this year. Instead, says her spokesman Joaquin McPeek, she plans to take a broader look at rent control in the context of the city’s affordable housing problems, and she hopes to appoint deputies in her new administration with an expertise in rent control. She plans to introduce some portion or version of the bills next year.

Embedded in a brick wall next to a doorway on Mintwood Place NW is a plaque commemorating the building’s recent upgrade: “Renovated in 2012-2013 through a cooperative effort of the residents, the Columbia Road & Mintwood Place Tenants’ Association and Urban Investment Partners. Thanks to Eric Rome, Esq. of Eisen & Rome, PC.”

In 2012, when UIP bought the 114-unit building at 1841 Columbia Road NW in Adams Morgan for $26 million, the entrance was around the corner, on Columbia Road, and conditions were considerably less spiffy. Now there’s a roof deck and green roof, improved heating and appliances, and a small but colorful lobby displaying a sign informing tenants that they can “receive $500 when you refer a friend to a UIP property.” Banners on the building’s exterior feature slogans like “Be Urban. Be 1841.” And rents, some of which were under $1,000 a month, now reach as high as $3,000 for two-bedrooms. (According to UIP, the highest rent for a one-bedroom unit increased from $1,950 when UIP bought the building to $2,575 today.)

In the interim came a voluntary agreement that, depending on whom you ask, was the best or worst thing that ever happened to the building.

Steven Keane, 79, has lived at the building for 30 years and stuck around through the renovation without seeing an increase in his rent, which is under $1,000 a month for a two-bedroom. “This is the best it’s ever been,” he says. “They put a lot of money into it, there’s no question.” His only complaint is that the new laundry machines require credit cards; he prefers the old coin system.

Jose Sueiro, the former publisher of a Latino weekly, also stayed, but he has a different take on the voluntary agreement, which he opposed. “It’s a disaster,” he says. “They got away with what they did. They are slowly and surely eliminating all of the ‘legacy’ apartments like mine.”

Sueiro doesn’t like the roof deck, which he says attracts a “party crowd,” or the new heating system. But his main complaint is the effect the deal had on the building’s population. About two-thirds of the building’s residents took the $20,000 buyout and left, according to Schwat. Sueiro says the building’s Latino population has dropped by half—not uncommon at buildings facing other types of petitions, where many immigrants lack the language skills to navigate the process or the legal status to fight for their rights and simply leave. “There’s a lot less community in the building,” Sueiro says.

“It’s younger, I can tell you that,” Keane says of the building’s new population. “Most of them have good jobs; otherwise they couldn’t afford to rent here.” Keane says he knows several former residents who wish they hadn’t taken the buyout, given how quickly $20,000 disappears on market rent in the District.

Rome, who’s helped negotiate plenty of buyouts in his 33 years as a tenant lawyer, says he actually cautions most of his clients against taking one. Sure, there’s the odd irresistible offer, like the $225,000 he secured last month for a single tenant living above a commercial space with lots of redevelopment potential on the H Street NE corridor, or the $135,000 he got for each of about 40 renters in a U Street NW-area building back when the development boom there was reaching its peak. But for the most part, he advises against the typical $15,000 or $20,000 buyout, which he calls “fool’s gold.”

“I think it’s very rare that a $15,000 buyout is a good deal,” says Rome. “It’s a horrible deal in most cases. There’s tax consequences, and after that, instead of paying 900 [a month] you’re paying 1,600 somewhere else, and in a year and a half, boom, your entire buyout is gone.” He was horrified last month when he asked a group of tenants who among them wanted to accept a $10,000 buyout, and three-quarters of them raised their hands.

(For building owners, on the other hand, the buyouts can be a great deal. “It’s simple math,” says Schwat, offering a hypothetical. “I raise the rent on an apartment by $600 a month. That’s $7,200 a year. I pay a tenant $20,000 to move out. How long will it take me to make back my money? Three years.”)

But to many tenants, the lure of a voluntary agreement is irresistible, especially if the alternative is a rent hike through another type of petition. The tenants at 812 Jefferson St. NW, a 55-unit building in Brightwood Park co-owned by UIP, learned in the late summer that the owners had applied for a hardship petition to increase their rent by 18.9 percent. Many residents there say they’d be unable to afford it.

Donald P. Brown, 73, has lived there since 1984, when the now-spare building had couches in the lobby, before it “changed hands and changed hands and got lesser and lesser.” If the hardship petition takes effect, he says, “I think I’d have to move.”

Asked if they’d consider a voluntary agreement, with extensive buyouts, in order to avoid the hardship increase, the tenants waver. “That’s kind of hard,” says Cynthia White, the tenant association president. “‘Cause this is home. This neighborhood is home.”

“The reason we’re complaining is that we don’t have the 18.9 percent,” says Donald Ordeman, who’s lived there for 10 years. “An offer in the five figures to move is going to attract a lot of people.”

He adds, “It may mitigate the loss for us, but it’s not going to mitigate the loss for the city.”

The same debate is playing out at the other buildings facing petitions. The tenants at the Zoo Gate say that after they learned of the hardship petition, Ford came by the building several times and told residents their rents wouldn’t actually go up by 45 percent. They asked him to put it in writing. On Oct. 15, he taped a letter to the building’s faulty front door.

“The purpose of this letter is to inform you that if the Company is granted the full amount requested, at this time the Company is not intending to impose the Hardship Petition increase on its current residents,” Ford wrote. “Any increase granted will only be applied to vacant units.”

The tenants are now planning to ask the owners and Ford to formalize this arrangement through a voluntary agreement.

At 3501 13th Street, Lynch is infuriated by what he perceives as UIP’s efforts to drive out longtime tenants, particularly immigrants who may not have legal status. He wants to keep the building’s population intact. But he has no illusions about how things are likely to play out.

“Don’t get me wrong,” he says. “They’re probably going to pay me a bunch of money, and I’m going to move.”