Developers, operators, buyers, and sellers of apartment buildings in D.C., whether market rate, mixed-rate, or 100% affordable housing, will be impacted by the impending RENTAL Act (aka, the Rebalancing Expectations for Neighbors, Tenants, and Landlords (RENTAL) Act of 2025). The D.C. Council completed its first vote (10-2) in favor of the RENTAL Act on July 28, 2025. The final vote is anticipated to be in September 2025, before it goes to Mayor Bowser for her expected approval.
The RENTAL Act is a sweeping reform bill affecting many D.C. housing laws. One set of changes is a modification of the Tenant Opportunity to Purchase Act (TOPA) whereby certain apartment buildings could be made exempt from the tenants’ purchase option rights under TOPA. For example, affordable housing developments with long-term commitments – where at least half the units are reserved for households earning 80% or less of the area’s median income (AMI) for 20 years or more could be exempt from TOPA. In addition, new buildings or buildings “substantially improved” within the last 25 years before the date of the sale could also be exempt from TOPA if at least 51% of the building’s apartment units are rented at market rates that are not affordable to lower-income households, defined as greater than 80% AMI. Under such an exemption, a building qualifies as “substantially improved” if “renovation costs” exceed half of the building’s “original value.”
The TOPA exemptions are intended to reduce transaction costs and transaction duration for a number of apartment buildings while preserving affordable housing supply. However, some critics argue that the 25-year limit on the “substantially improved” TOPA exemption may be too narrow and that the RENTAL Act should have also eliminated or materially reduced the mandatory 90-day notice period for property transfers – especially in the case of TOPA-exempt apartment buildings.
For the most recent updates on the RENTAL Act and additional analysis on how the Act could affect your ownership, purchase, or sale of apartment buildings, please contact me.
