DC Appeals Court: Developer Seeking To Demolish Aging 302-Unit Low Income Housing Complex & Build Market-Rate Condos, Rental Apartments Violated Local Law Requiring Existing Tenants To Be Offered Bona Fide Opportunity To Buy Premises

In Washington, D.C., WAMU Radio 88.5 FM reports:

• The residents of the Museum Square residential building near D.C.'s Chinatown neighborhood can breathe a little easier now.
  
  That's because of a ruling from the D.C. Court of Appeals, which last [month] tossed out the $250 million sales price set by Bush Construction Companies, the Virginia-based group that owns and wants to demolish the 302-unit building to replace it with 800 market-rate condos and apartments.
  
  In the ruling, which upheld a prior court decision, the three judges said that the sales price "was not based on an objectively good faith assessment of the value of the property," and thus violated the D.C. law that offers tenants the first shot at buying the building they live in if it is put on the market.
  
  The fight over the building — where residents are largely low-income and Chinese — dates back to 2013, when Bush Companies announced it would not be renewing the Section 8 contract with the U.S. Department of Housing and Urban Development that kept rents subsidized. Instead, the group said it wanted to raze and redevelop the property, which stands in Mt. Vernon Square, a neighborhood that has developed quickly over the last decade.
  
  As per the D.C. Tenant Opportunity to Purchase Act, Bush Companies offered the building up to the tenants first — but for $250 million, or more than $800,000 per unit. (Read more about how TOPA works here.) The residents recoiled at the proposed price tag, but Bush Companies defended it by saying that it faithfully reflected the potential value of the building once it gets redeveloped.
  
  The tenants sued, saying Bush Companies had not put forth a "bona fide" offer as required by TOPA. Instead, they argued, the building was worth just a fraction of that — a later appraisal set it at just under $70 million — and any proposed sales price should be closer to that. In April 2015, a trial judge sided with the tenants, and last [month] the Court of Appeals backed that decision.
  
  "TOPA is supposed to work by allowing tenants to purchase a unit at a fair and reasonable price and giving them the right of first refusal if they choose to," says Jonathan Levy of the Legal Aid Society of D.C.,(1) which represented the tenants. "The reason this decision is important is because it clearly says that a land owner cannot evade the intent of the statute by choosing an arbitrarily high figure to sell the building to the tenant, which is functionally the same as not offering to sell it at all."

For more, see D.C. Court Backs Low-Income Renters In Fight With Developer Over Building.

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(1) The Legal Aid Society of the District of Columbia is a non-profit law firm that provides legal services to persons living in poverty in the District of Columbia in the areas of domestic violence/family, housing, public benefits, and consumer law. In addition to providing direct representation, it also helps clients avoid unnecessary legal entanglements through outreach and education, and helps them resolve their own disputes with advice and other brief assistance.