Owning Investment Property In Washington DC
Rental Real Estate Is Profitable In DC, But Know The Rules
If you’re thinking about purchasing DC investment property, due diligence is essential. It’s not as easy as buying a row house with a basement and putting up a ‘for rent’ sign.
You’ll need to understand DC’s unique landlord/tenant laws, short term rental restrictions, TOPA for multiunit rental buildings, plus what’s required to obtain your Basic Business License and get your rental property prepared, inspected and exemption perfected.
Once you’ve navigated the process once, you’ll find it simple to repeat. Here’s a guide to get you started.
Rent Control vs Rent Stabilization
Rent stabilization refers to rent increases in qualified units, which are subject to a set percentage rate determined by a number of factors, including market rates, location, and local economy.
Rent control refers to rental rates capped at a certain value.
DC Law
Rental Housing Act of 1985 (DC Law 6-10) as amended (the Act), codified at DC Official Code § 42-3501.01 et seq.
Definitions
Under the 1985 Act, an apartment building or apartment complex is called a housing accommodation, and a single apartment or house is called a rental unit. A renter is a “tenant,” a landlord is a “housing provider.” The Rental Accommodations Division (RAD) administers the Act.
Applications
The Act applies to all rental housing accommodations in the District of Columbia. Certain parts of the Act, such as eviction protections, apply to all District tenants.
Title II of the Act pertains to rent stabilization. It applies to any non-exempt rental unit. All rental units must be registered with the RAD either as subject to rent control or exempt from rent control. For any unit that is not registered with RAD, rent control automatically applies. The most common exemptions from rent control are for rental units that are:
Federally or District-subsidized
Built after 1975
Owned by a natural person (i.e., not a corporation) who owns no more than four rental units in the District
Vacant when the Act took effectHousing Categories
Apartment
One Family Rental
Two Family Rental
One-Family Rental
Includes single-family homes, townhouses, duplexes, individual condominium units, or individual rooms (includes individual rooms in a dwelling licensee also occupies);
Two-Family Rentals
Includes rentals of English basements and converted basement apartments or carriage houses in single-family homes where the main residence is occupied by the property owner or another tenant;
Apartment Houses
Includes buildings with three or more units.
Landlord Resources
DC Rental Housing Business
Corporate Registration
Tax Registration
Small Business Resource Center
Housing Provider Ombudsman
BBL Inspection Requirement
DHCD Rent Control
DHCD-Stamped Rental Accommodations Registration
Certificate of Occupancy
DOPA
TOPA: Conversion & Sale
DC Courts: Landlord & Tenant
DC Council Caps Rent
2023 - 2025
The rate cap applies to rent-stabilized apartments, which includes most multifamily buildings constructed before 1976. It prevents property owners from raising prices by more than 12% over two years. Seniors see more aggressive protections, with new rent increases capped at 8% total over the next two years.
2026 Pricing Schedule
For all rent-controlled units, the maximum standard rent increase for rent control year 2026, May 1, 2026, through April 30, 2027:
Standard Units: Maximum increase of 4.1% (calculated using the 2.1% regional CPI-W plus 2%).
Elderly or Disabled Tenants: Maximum increase of 2.1% (tied to the lowest of CPI-W, Social Security COLA, or 5%).
Requirements: To get the lower rate, tenants must register their status with the D.C. Office of the Tenant Advocate or Rent Administrator.
RC Exemptions
Rent control applies to any unit that does not have an exemption. The most common exemptions are:
Buildings built after 1975
Units owned by a “small landlord” (natural person (not a corporation) who owns four or fewer rental units in DC)
Units subject to a government subsidy (federal or District-subsidized)
Elderly | Disabled Reasonable Accommodation
The federal Fair Housing Act protects tenants who have such physical or mental impairments against eviction. It does so by requiring the landlord to make “reasonable accommodations,” including for example “heavy-duty housecleaning” to cure housing code violations, or assistance from a social worker in paying the rent.
Perfecting Your Exemption
Every. Single. Landlord. Yes, that means you.
All rental units must be registered with the RAD, either as subject to rent control, or exempt from rent control. Any unit that is not registered with RAD as “Exempt” is automatically rent controlled.
You must give your tenant written notice of the exemption at the beginning of the lease, or simultaneous with the filing of the Claim of Exemption. Without it, your exemption is invalid.
When a landlord perfects the exemption, rent increases are not regulated, and rent increases don’t require prior filings or fulfillment of formal notice requirements.
If the exemption is not perfected, the exemption is void, rent control limits the amount and frequency of rent increases, and landlords must comply with rigorous filing and notice requirements.
Consequences for failure to file and perfect your exemption are illogically severe. The Rental Housing Commission insists landlords strictly comply with their filing requirements, so don’t neglect to file immediately.
Disclaimer:
We are not attorneys, legal experts, investment counselors, or CPAs. The content on this channel is presented for informational purposes only and derived from reliable sources, but should not be considered legal, financial, investment, transaction or real estate practice advice. Susan Isaacs and Compass, their principals and/or representatives, do not guarantee or warrant its accuracy, completeness, or applicability to any specific real estate transaction. Homebuyers should read applicable D.C. law and code as part of their due diligence, and seek help from licensed, qualified professionals for interpretation and application to their specific transaction.