Code of the District of Columbia

§ 42–2802.02. Maintaining affordability.

(a) A rental unit constructed pursuant to this chapter shall remain affordable for a period of 40 years or a longer period selected by the developer.

(b)(1) Except as provided in subsection (c) of this section, a for-sale unit constructed pursuant to this chapter shall remain affordable for 180 months or a longer period selected by the developer, in accordance with section 2218 of Title 14 of the District of Columbia Municipal Regulations (14 DCMR § 2218). If a for-sale unit is sold before the affordability period expires, the new affordability term shall begin on the date of the sale.

(2) After the affordability period expires, there shall be no resale restrictions unless otherwise agreed to by the developer or a subsequent purchaser in an additional covenant negotiated pursuant to subsection (d) of this section. If no additional covenant exists after the affordability period expires, the purchaser shall repay all preexisting equity to the Housing Production Trust Fund established in § 42-2802; provided, that:

(A) Title to the property transferred from the purchaser to another party by a means other than inheritance; or

(B) Refinancing of indebtedness secured by the property results in any withdrawals of cash or equity value from the property by the purchaser/borrower.

(3) If the future sales price is not sufficient to pay off all deeds of trust, the customary seller’s closing costs, and the preexisting equity, the amount due to the Housing Production Trust Fund for the repayment of the preexisting equity shall be the amount available from the sale of the property after payment of all deeds of trust and customary seller’s closing costs.

(4) Repayment of the preexisting equity shall not be required upon the refinancing of indebtedness resulting in withdrawal of cash or equity value if the new loan, all other indebtedness, and the preexisting equity result in an amount that is less than 80% of the appraised value of the property.

(c)(1) A for-sale unit constructed pursuant to this chapter and located in a distressed neighborhood shall remain affordable for 60 months or a longer period selected by the developer, in accordance with section 2218 of Title 14 of the District of Columbia Municipal Regulations (14 DCMR § 2218). If a for-sale unit is sold before the affordability period expires, the new affordability term shall begin on the date of the sale.

(2) After the affordability period expires, there shall be no resale restrictions unless otherwise agreed to by the developer or a subsequent purchaser in an additional covenant negotiated pursuant to subsection (d) of this section. If no additional covenant exists after the affordability period expires, the purchaser shall repay all preexisting equity to the Housing Production Trust Fund; provided, that:

(A) Title to the property transferred to another party by a means other than inheritance; or

(B) Refinancing of indebtedness secured by the property results in any withdrawals of cash or equity value from the property by the purchaser/borrower.

(3) If the future sales price is not sufficient to pay off all deeds of trust, the customary seller’s closing costs, and the preexisting equity, the amount due to the Housing Production Trust Fund for the repayment of the preexisting equity shall be the amount available from the sale of the property after payment of all deeds of trust and customary seller’s closing costs.

(4) Repayment of the preexisting equity shall not be required upon the refinancing of indebtedness resulting in withdrawal of cash or equity value if the new loan, all other indebtedness, and the preexisting equity results in an amount that is less than 80% of the appraised value of the property.

(5) When a resident or developer submits an application for development of a property with affordable for-sale units that is located in a distressed neighborhood, this subsection shall apply for a period of 3 years regardless of any subsequent changes to the determination of whether a neighborhood is distressed under subsection (e) of this section.

(d) Nothing in this chapter shall prohibit a developer from making the developer’s properties subject to affordability periods that are longer than those minimum affordability periods required under subsections (b) and (c) of this section, including for developments such as limited equity cooperatives, land trusts, and shared equity models. These covenants may require the developer or purchaser to repay additional amounts if terms of the covenant are not satisfied.

(e)(1) The Mayor shall make the determination of distressed neighborhoods on an annual basis by rulemaking pursuant to Chapter 5 of Title 2 [§ 2-501 et seq.] and a map identifying all distressed neighborhoods shall be included in the annual Consolidated Action Plan submitted to the Department of Housing and Urban Development, which is the annual plan associated with the 5-Year Consolidated Plan.

(2) For the first determination of distressed neighborhoods under this subsection, the proposed rules shall be promulgated as part of the next Consolidated Action Plan developed after March 10, 2015, and submitted to the Council for a 45-day period of review, excluding Saturdays, Sundays, legal holidays, and days of Council recess. If the Council does not approve or disapprove the proposed rules, in whole or in part, by resolution within this 45-day review period, the proposed rules shall be deemed approved.

(3) The Mayor shall use as a baseline for the determination of distressed neighborhoods those United States Census Tracts with a poverty rate of 20% and may add or remove United States Census Tracts designated as distressed considering the median sales price, median home appreciation rate, homeownership rate, and other factors deemed reasonable by the Mayor.


(Mar. 16, 1989, D.C. Law 7-202, § 3b; as added Mar. 10, 2015, D.C. Law 20-190, § 2(c), 61 DCR 12156.)