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(a)

(b)

"For his immediate and personal use," or the
immediate and personal use of a person to

whom the premises are being sold; or

The act also permits a landlord to recover possession for the immediate purpose of discontinuing all (but not just rental) housing uses "for a continuous period of not less than six months." In the event, the landlord seeks to recover possession for any of these reasons, except substantial rehabilitation, he must first so notify the tenant, in writing, at least ninety (90) days prior to the date the tenant is to vacate. In the event possession is sought for the purpose of substantial rehabilitation, then the tenant must be given at least 120 days' notice.

CONCLUSION

This memorandum does not contain an exhaustive statement of all the provisions of the new law, nor the reasoning which leads us to believe that the legislation should be declared invalid. Nor have we sought, here, to state all of the reasons which we believe

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would convince the courts to permit landlords to increase their rents, pending a determination of the legislation's validity. Relief in this regard should be keyed to the particular economic circumstances of affected landlords, and should also be weighed with due regard for the action which Congress may take.

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APPENDIX

Example I

Building A is a twenty unit, four story brick building, containing only one-bedroom apartments which was purchased in 1969. All units are rented at a rate of $135.00 per month, and it is assessed at $320,000, with $240,000 of the assessment attributable to the building. For the twelve-month period ending September 30, 1975, rent receipts totalled $31,077, after allowance for an actual vacancy loss of $648, and uncollectable rent of $675. Total expenses incurred during the same period, including property taxes and a management fee of six percent, totalled $21,060. Its rate of return is to be determined as follows:

The landlord may raise the rent on each unit by no more

than $6.75 per month. Gross income therefore will increase by

$1,620, and net income (because of the management fee) will increase to $6,819.00. If this landlord's costs do not increase, as a

result of increasing his rent by the maximum five percent, his rate of return will increase by less than 0.7% to 2.84%.

Example II

The

Assume the same facts as in Example I, except that fuel and utility costs of $2,600 are paid directly by the tenants. landlords pre-rent increase rate of return therefore is 3.26%. As the monthly rental rate is the same, this landlord's net income after a five percent rent increase, will also rise by $1,602, but to $9,419, producing a rate of return of 3.92% as compared to the 2.84% yield under Example I for the same structure.

On July 29, 1975, the District of Columbia Council passed on second and final reading Bill No. 1-157, the "District of Columbia Rental Accommodations Act of 1975" (hereinafter referred to as the "RAC Bill" or the "Bill"). The measure was approved by the Mayor on August 8, 1975. It is now subject to review by Congress for 30 legislative days pursuant to § 602 (c) (1) of the District of Columbia Self-Government and Governmental Reorganization Act.

This Memorandum is intended to provide an analysis and critique of the principal features of the Bill. In our view, this analysis compels the conclusion that if the RAC Bill is allowed to become law in its present form it will be an unmitigated disaster, not only for the owners of rental housing, but for tenants (particularly those of low and moderate income), the citizens and taxpayers of the District of Columbia, and ultimately for the Federal Government, which will be called upon the "bail out" the City from the consequences of this ill-conceived legislation.

In other cities, the natural inclinations of some municipal governments to use rent control as an easy "solution" to difficult housing problems has often been restrained by the State governments, which exercise paramount authority to limit or prohibit the imposition of municipal rent controls. Indeed, cities are generally said to lack the authority to impose rent control at all unless empowered to do so by the State legislature. In the District of Columbia Congress retains ultimate legislative authority even under "home rule, as it must under the Constitution. Therefore, it is appropriate that the opponents of the RAC Bill now turn to Congress, as the "State legislature" of the District of Columbia, to seek protection from this oppressive legislation.