Reforming TOPA to promote development and housing affordability

Good morning, Chairman White and members of the Committee of Housing. My name is Yesim Sayin, and I am the Executive Director of the D.C. Policy Center—an independent non-partisan think tank advancing policies for a strong, competitive, and compelling District of Columbia. In my testimony, I will focus on what we know about TOPA, and what reforms can improve its effectiveness.

In March 2025, the D.C. Policy Center released, TOPA’s Promise and Pitfalls: Balancing tenant rights, affordability, and housing investment in Washington, D.C., which analyzed 11 years of TOPA activity, housing stock data, and stakeholder interviews. I have attached the full report to my testimony for your perusal. I have attached to my testimony a one-page summary of this report. We also used the data we complied for this report to assess the impacts of the RENTAL Act and the Common Sense TOPA Reform Act, which my colleague Emilia Calma discussed in her testimony,

I am here today to offer observations and recommendations drawn from our recent analysis of the law, its evolving use, and its impact on the District’s housing landscape.

TOPA was enacted over four decades ago to address a specific housing crisis: the rapid conversion of rental units into condominiums during a period of virtually no new rental construction. At that time, the law served a clear and urgent goal—protecting tenants from displacement. But the District’s housing landscape has since changed dramatically. Since 2007 alone, we’ve added nearly 43,000 rental units, primarily in large, market-rate buildings. At the same time, approximately 20,000 additional units were delivered through public subsidy and affordability programs.

Today, TOPA’s goals are no longer clearly defined, and its use has broadened significantly. It is still a critical tool in some contexts—particularly for older, smaller, rent-controlled buildings. But increasingly, it is used to negotiate for building repairs, rent concessions, and at times, substantial cash payouts, rather than achieving tenant ownership or long-term affordability.

Our analysis raises several concerns:

1. The law is not aligned with today’s market realities

TOPA applies broadly to transactions that are common in the normal lifecycle of multifamily buildings—such as internal ownership changes, refinancings, and investor exits. These are especially prevalent in newer buildings financed with equity partners. In fact, every single TOPA-triggered sale in buildings constructed after 2007 occurred within the first 10 years of ownership—precisely when recapitalization typically happens.

This broad definition of “sale” creates unintended consequences:

• It introduces costly delays, legal uncertainty, and financing risk.
• It deters investors from funding new developments or major renovations.
• It adds costs that are not tied to long-term affordability or tenant outcomes.

2. Tenant participation has become more difficult

Most tenant associations (TAs) form in smaller, older buildings—96 percent were built before 1978, and 88 percent have fewer than 50 units. These are the buildings where TOPA can be most impactful.

But TAs today face greater challenges. Due to a combination of factors, including higher interest rates and lack of tenant management experience, financial institutions have little interest in lending to projects with tenant ownership. In some cases, previous TA-led purchases have struggled financially due to undercapitalization. The TOPA deals that have produced long term affordability have tenants assign rights to an affordable housing provider and benefited from Housing Production Trust Fund financing, which is limited.

3. We do not have adequate data to judge effectiveness

There is no comprehensive data on what happens after an Offer of Sale. How many buildings are purchased by tenants? How many sales fall through? How often are repairs negotiated? How much is paid out? Without this information, we cannot evaluate whether TOPA is achieving its intended outcomes—or even what those outcomes should be.

Our data show that almost all TA formations and transactions occur in a narrow segment of the market: older, smaller, rent-controlled buildings. That suggests TOPA’s impact may be concentrated and limited. Yet, the costs are felt broadly—by tenants, housing providers, and investors alike.

4. Investor confidence is eroding

Capital is mobile. In interviews with brokers and housing developers, we heard consistently that investors are reluctant to engage in D.C.’s housing market because of TOPA-related risks. When combined with high interest rates, rising tenant arrearages, and constrained rental assistance programs, this uncertainty discourages the very investment needed to maintain and expand the District’s rental stock.

We are already seeing the consequences: a sharp decline in housing permits, and increased foreclosure risk for mission-driven housing providers.

Recommendations

1. Clarify the purpose of TOPA. Is it about tenant ownership? Displacement prevention? Affordability preservation? Policymakers must define success and align the law accordingly.
2. Focus on where TOPA is most viable. The data show the law is most used in small, rent-controlled buildings. In larger, newer properties, it serves more as a transaction cost than a preservation tool.
3. Modernize the law. Consider narrowing the definition of “sale” to exclude internal ownership changes and recapitalizations that do not affect tenancy. This change should be supplemented by certification of exempt sales by DHCD to minimize frivolous litigation.
4. Support long term affordability. Under current conditions outright tenant ownership is increasingly elusive, and mission driven housing providers are an integral part of preservation. To support them, provide dedicated funding for mission-driven housing providers through expansion of DOPA.
5. Improve data collection. Require transparent reporting on all TOPA transactions—from Offers of Sale to final outcomes—so we can evaluate the law with facts, not anecdotes.

Conclusion

TOPA’s original intent remains vital: preventing displacement and protecting tenants. But the law must evolve to match the realities of today’s housing market. Without reform, we risk discouraging housing production, weakening investor confidence, and undermining the very affordability we seek to protect.

I urge the Council to use this moment to recalibrate TOPA. This includes implementing the exemptions proposed in the RENTAL, and go further by defining TOPA’s goals, clarifying its scope, and supporting the actors who can help it succeed.

Thank you. I’m happy to answer any questions.