Earlier this month we highlighted news that Museum Square Apartments will not be renewing its Section 8 housing status. In order to adhere to the Tenant Opportunity to Purchase Act (TOPA) an offer of sale has been issued to the tenants of $250,000,000 – which equates to over $830,000 per unit. Clearly not fair market value for the existing state of the units and more of a price driven by the raze and redevelopment potential of the land. The assessed value of the property is $36 million.
Aaron Wiener of the Washington City Paper’s Housing Complex recently penned a two-part update on this situation. Part one outlined many of the details and is supported by quotes from affected residents. Part two highlights legislation At-large Councilmember David Catania is trying to push through to regulate TOPA for Section 8 housing buildings to make it adhere strictly to the assessed value. Considering Catania is the major opponent for Murial Bowser in the 2014 Mayoral election this issue could become a major political lightning rod.
I don’t pretend to fully understand all the aspects to this issue. Much is yet to be revealed. On the one hand, Mount Vernon Triangle has been able to develop without any large scale displacement until now. Many would like to see that pattern continue. I think most of us at least support the idea of keeping the Mount Vernon Triangle as a mixed-income community.
On the other hand, if Catania’s proposed legislation allows the Tenant Organization to buy the building for the assessed value of $36 million (~119K/unit) and then the tenants then turnaround and sell their building for $80-$100 million (or more) to another developer to capture the windfall from the redevelopment potential for themselves would that seem fair to you? Should tenants have that much power to essentially capture the gains the property owner typically has the right to?
This saga will undoubtedly continue on throughout 2014 and beyond. We will attempt to provide updates as we learn them.
Hat Tip: PQResident, TedW