Nearly four years after the District forced them out of their dwellings, most, if not all, of the owners of condemned condominiums on Talbert Street in Southeast have received mortgage relief, according to a community figure familiar with the situation.
These developments happened amid terse negotiations between the Bowser administration and the Neighborhood Assistance Corporation of America. However, as the Rev. Graylan Hagler explained, there’s some work ahead to ensure that the beleaguered homeowners can afford to settle elsewhere in the District.
“We ended up in this battle of wills with the city,” said Hagler, NACA development director. “They didn’t want to put on the table the kind of mortgage assistance funds to help them get housing in D.C. We knew that with the city lowballing, the people free from a mortgage would not be able to afford to remain in D.C.”
Hagler, pastor emeritus of Plymouth Congregational Church of Christ in Northeast, went on to say that the D.C. government often colludes with developers to increase profit, much to the detriment of former condominium owners at River East at Grandview Estates on Talbert Street, and other low- and working-class people trying to make a way.
The mortgage relief negotiations, he said, became contentious as the government tried to settle on an amount that wouldn’t have been much help to condominium owners.
“They had no problem subsidizing loans in the beginning because that benefitted the developer,” Hagler said. “Then it went south. The city turned around and said it wasn’t their responsibility. But they created that.”
An Unprecedented Court Battle for Displaced Condominium Owners
In 2021, 40 families involuntarily left River East at Grandview Estates on Talbert Street in Southeast with little clue of where they would permanently, and affordably, resettle with a mortgage hanging over their heads.
The District borrowed against the Housing Production Trust Fund to finance the development project. Later, these first-time homeowners purchased their condominiums with dollars from the Home Purchase Assistance Program (HPAP).
Despite council legislation earlier this year allowing for re-enrollment in HPAP and access to affordable mortgage options, there remained the question of if, and how the D.C. government would make homeowners whole once again.
In years past, D.C. Mayor Muriel Bowser (D) denied that the District, as a government entity, had any obligation in helping the condominium owners rebound from their period of financial difficulty. The D.C. Court of Appeals, however, took on a different position, as seen in a Sept. 12 ruling that reversed a lower court ruling and affirmed six Black female condominium owners’ right to seek recompense from the District.
LaRuby May, the attorney for the plaintiff, argued in her brief that the D.C. government entered a relationship with the condominium owners that’s protected under the D.C. Consumer Protection Procedures Act. She cited Snowder v. District of Columbia, a 2008 case in which Robert Snowder and five other people sued the District and several tow truck companies for the imposition of storage fees and other costs without adequate notice or consent.
The nature of the D.C. government’s relationship with the former occupants of River East at Grandview Estates, bears much similarity to what Snowder and others entered.
“The District acted as a merchant and crafted a merchant-consumer relationship with our client, so they should be treated as a merchant, not like a municipality or jurisdiction,” May told The Informer just days after the Sept. 12 appellate court decision.
May said that she hasn’t heard from the D.C. government as of yet, nor does she expect them to respond immediately. However, she expressed an enthusiasm for making her case, once again, before a lower court judge.
“This case allows us to work on behalf of our clients to hold the District accountable in a way that hasn’t happened before in housing under the D.C. Consumer Protection Procedures Act,” May told The Informer. “D.C. met the test of what it meant to be a merchant, so the appeals court reversed the decision so they can be treated as such. This is a large, significant battle.”
Working to Prevent Another Talbert Street Situation
In weeks before the D.C. Council conducted its first post-summer recess legislative meeting, remnants of the Talbert Street debacle reappeared when the Bowser administration withdrew a contract it entered for construction of affordable housing at 2352-60 High Street in Southeast.
This decision, a Department of Housing and Community Development (DHCD) spokesperson said, happened after affordable housing developer Neighborhood Development Company (NDC), which was sponsoring the project, ceased operations.
Under the contract, the D.C. government, like had been the case with River East at Grandview Estates, would have loaned more than $13 million from the Housing Production Trust Fund to finance 22 units of affordable housing on 2352-60 High Street in Southeast. The loan would then be transferred to the future owners at High Street who would acquire a down payment for their mortgage through HPAP.
The parallels raised a red flag in the D.C. Council’s Committee on Housing, which threatened to introduce a disapproval resolution for the contract unless DHCD, Department of Buildings (DOB), Department of Licensing and Consumer Protection (DCLP), and Department of Insurance, Securities and Banking (DISB) developed a plan by Sept. 13 to avert a situation similar to River East at Grandview Estates.
The DHCD spokesperson, responding to an Informer inquiry, said that, in light of NDC’s closure, it would work to ensure compliance of existing affordability agreements at other properties likely to experience ownership transfer.
In speaking about what they called the “limited similarities” between River East at Grandview Estates and the proposed development on High Street, the spokesperson outlined a process implemented to protect consumers of DHCD-funded homes.
“DHCD, as a financial capital provider,” the spokesperson said, “will continue to work with the various District government agencies to ensure that prospective buyers of DHCD-financed homes are protected through thorough architectural plan review/approvals (via DOB and D.C. Department of Transportation), confirmation of developers being licensed to conduct business in the District (via DLCP), confirmation of appropriate insurance being in place for such developments (via Office of Risk Management) and other sister agencies within the District government, as applicable.”
At-large D.C. Councilmember Robert White (D), chair of the council’s Committee on Housing, reflected on his correspondence with the aforementioned agencies, telling The Informer that he wanted to avert further displacement of homeowners.
As the council mulls how to avert another housing crisis involving voucher holders, White said he laments the market forces (material and labor costs, etc) that drove NDC’s demise and further complicates efforts to make Talbert Street condominium owners whole.
“We’re still dealing with a catastrophe with Talbert Street homeowners and the government has no answers to keep them from rock bottom,” White told The Informer. “The homeowners have been out of their homes for three years. They have been limbo [and] the mayor has to make a determination of what the city will do to support them.”