WASHINGTON, D.C. – Attorney General Karl A. Racine today announced that the Office of the Attorney General (OAG) won a precedent-setting victory in a long-running lawsuit against well-connected slumlords and developers who conspired to displace long-time African American tenants from homes they lived in for decades.
The settlement fully concludes AG Racine’s first lawsuit to protect low-income tenants and hold slumlords accountable for forcing residents to live in unsafe and unlawful conditions and trying to push them out to clear way for development of expensive market-rate housing adjacent to the Congress Heights Metro Station, a highly sought after and valuable location. As a result of extensive collaboration between OAG and the remaining tenants, the building’s new nonprofit owner will transform the current 47-unit apartment complex into approximately 180 units of affordable housing as well as significant retail at the site.
This settlement resolves OAG’s housing conditions lawsuit against CityPartners and Geoffrey Griffis, the current owners of Congress Heights Apartments. A previous settlement resolving claims against the complex’s former owners, Sanford Capital and Carter Nowell, resulted in restitution of $214,000 to approximately 10 remaining tenants.
“This resolution holds slumlords and developers accountable for executing their illegal and immoral business plan that brazenly and unlawfully put profits over people. It’s a major victory for the courageous remaining tenants of the Congress Heights Apartments and for affordable housing in the District,” said AG Racine. “For years, my office has fought alongside the tenants and their exceptional team of pro bono lawyers and advocates to push back against the lawlessness of the well-heeled owners and principals of Sanford Capital and CityPartners. The District has seen an unprecedented wave of growth and development over the past decade. This growth has not been fair and just. Rather, it has made the District the jurisdiction that has experienced the most displacement of former long-time residents, especially Black and brown residents, in the entire United States. With today’s resounding victory—as well as other lawsuits that my office has filed—the message is clear: the days of ‘business as usual’ that encouraged ethically compromised slumlords, developers, and management companies to profit at the expense of long-time District residents, the majority of whom are Black or brown, is over. Today’s announcement represents a better path forward—one where tenants have a voice and affordable housing is expanded.”
“Thank you to our Attorney General Karl Racine for standing up for us, the tenants at the Congress Heights apartments, when our landlords for many years endangered our health and safety, violated our TOPA rights, and tried to force us to leave our homes,” said President of the Congress Heights SE Tenants Association Ruth Barnwell. “Now, at last, our determination and hard work with our advocates and lawyers—and the crucial receivership case brought by the Office of the Attorney General—are paying off. For decades in the future, our tenants—along with many other members of our community, including families and seniors—will be able to enjoy living in safe, healthy and affordable housing in Congress Heights.”
OAG enforces District laws, including the Tenant Receivership Act (TRA) and the Consumer Protection Procedures Act (CPPA), to protect tenants. Under the TRA, landlords can be forced to fix health and safety issues at a rental property. When landlords fail to provide safe and habitable housing to consumers or violate other laws, OAG also can take action under the CPPA, which prohibits a wide variety of deceptive and unfair business practices and protects consumers, including tenants.
In 2016, OAG filed suit against Sanford Capital, LLC, the owners of the Congress Heights Apartments over extreme disrepair and dangerous housing code violations. Tenants at the 47-unit affordable housing complex suffered for years with infestations of vermin, mold contamination, inconsistent heat, broken plumbing, and fire code violations, among other problems with their apartments—and they alleged that Sanford’s years-long pattern of neglect by was intended to push them out of their homes and pave the way for a planned redevelopment. When Sanford Capital purchased the property in 2010, 46 of the 47 units were occupied. Because of the conditions, when OAG filed suit in 2020, fewer than 20 units were occupied.
These slumlords and developers used illegal tactics to try to force District residents to leave their homes, but through OAG’s lawsuit, they were unable to get away with it. The slumlords’ and developers’ strategy was as follows:
- Identify and purchase residential buildings located in neighborhoods that were forecasted to experience intense gentrification, many of which are located near Metro stations;
- Once the buildings were acquired, intentionally cease providing basic services to tenants, requiring tenants to live in uninhabitable and unsafe units, with the objective of causing the tenants to self-evict from their homes;
- When the remaining tenants have no choice but to leave the dilapidated conditions caused by the well-connected slumlords and developers, these individuals and entities tear down the existing units in favor of new construction that will be marketed to residents who can afford market rate homes; and
- At the conclusion of the illegal plan, the slumlords and developers profit from receipt of high rents or by selling the building to a new owner.
As a result of this, long-time District residents lose their homes and are frequently forced to leave the city that has been their home for generations.
OAG’s lawsuit against Sanford Capital over conditions at the Congress Heights Apartments was the first filed under the TRA during AG Racine’s tenure. The office later added consumer protection claims to the case. The lawsuit was also the first of several cases OAG brought against Sanford Capital related to conditions at properties it owned in the District. (The company was forced out of the DC market through a 2018 settlement with OAG.)
During OAG’s litigation against Sanford, the company attempted to transfer the Congress Heights Apartments to a developer, CityPartners. CityPartners, and its owner, Geoffrey Griffis, had originally planned to redevelop the apartment complex and several adjacent plots of land through a Planned Unit Development (PUD). However, OAG successfully petitioned for the appointment of a receiver—a third-party manager in charge of making repairs. In 2017, the Court ordered Sanford to negotiate the planned sale of the building with the tenants and their attorneys under the District’s Tenant Opportunity to Purchase Act (TOPA). To deprive tenants of their rights under TOPA, Sanford, its lender, EagleBank, and CityPartners arranged a covert transaction to transfer ownership of the complex from Sanford to CityPartners in violation of the Court’s order.
OAG added CityPartners and Griffis as defendants to its housing conditions case in 2018 and obtained an order requiring CityPartners to pay approximately $1 million to fund the receivership. The tenants, represented by Arnold & Porter, filed their own lawsuit under TOPA. In addition to its litigation, OAG filed its first opposition before the Zoning Commission arguing that CityPartners’ PUD was not in the public interest because of the illegal attempt to transfer the property.
In late 2019, CityPartners sought to end OAG’s and the tenants’ litigation by agreeing to sell the property to a development partnership chosen by the tenants, which included non-profit housing developer National Housing Trust and a for-profit commercial developer that would manage other portions of the project. When the pandemic hit in 2020, financing for the deal fell through. Finally, in 2021, the tenants identified a new development partnership for the site, which includes the non-profit National Housing Trust and commercial developers Standard Real Estate and Trammell Crow Company.
The sale of the Congress Heights Apartments to the new entity closed on December 31, 2021. Under the terms of the deal, the redevelopment will include commercial office space and 179 units of affordable housing. Currently, only nine tenants remain. Of the 179 new units, 5% will be rented at 30% Area Average Median Income (AMI), 75% will be rented at 50% AMI, and 20% will be at 80% AMI. Thirty five percent will have two to three bedrooms are thus for families. There will also be 18,000 square feet of retail space in the final development. The transfer of the building to new owners concluded the tenants’ TOPA lawsuit and triggered the resolution of OAG’s lawsuit. The consumer protection portion of OAG’s lawsuit was previously settled in 2019.
A copy of the Congress Heights Apartments settlement agreement is available here.
The court order is available here.
A letter sent by OAG to the Zoning Commission opposing the extension of CityPartners’ PUD and explaining the history of the case is available here.
Resources for Tenants
In response to the District’s affordable housing crisis, AG Racine is using the law to protect tenants, hold abusive landlords accountable, and preserve existing affordable housing. OAG has won court orders forcing building owners to fix issues including mold, vermin infestations, and fire code violations at properties across the District and secured hundreds of thousands of dollars in restitution for residents who were forced to live in unsafe conditions. OAG has also sued landlords who refused to take basic security measures to keep tenants safe, stopped landlords who illegally converted rent-controlled apartments into short-term rentals, and took action against landlords who discriminated against District residents who use housing vouchers.
Learn more about OAG’s work to preserve affordable housing and find resources to help renters on OAG’s Tenant Resources page.