Dive Brief:
- Petra, owner and manager of three Washington, D.C., apartment complexes, agreed to pay $700,000 and reform its practices to resolve a lawsuit alleging that it had illegally discriminated against lower-income residents in order to boost profits, thereby limiting local affordable housing options, D.C.’s attorney general office announced Thursday.
- An OAG investigation uncovered evidence that Arlington, Virginia-based Petra Management Group, LLC, and three other LLCs collectively known as Petra, illegally exploited a D.C. law exempting apartments from rent control requirements when they are leased to tenants with government-funded housing vouchers, per the release.
- The settlement, filed in the Superior Court for the District of Columbia, alleges that Petra illegally leased rent-controlled apartments solely to voucher holders, enabling it to charge significantly higher rents subsidized by the federal and D.C. governments.
Dive Insight:
Under D.C. law, all units built before 1976 are subject to rent control unless landlords qualify for certain exemptions. In a complaint filed in January, the OAG alleged that Petra deliberately excluded tenants without subsidies who would have been eligible to rent at lower rent-controlled rates, and advertised its apartments exclusively at the increased subsidized rates without disclosing the rent-controlled rates it was legally required to charge.
Petra was found liable for not abiding by rent-control laws at the following apartment buildings, which have more than 100 units combined:
- The Adams at 4825 - 4829 North Capitol St. NE in Ward 5
- The Keystone at 743 Fairmont St. NW in Ward 1
- The Madison at 5616 13th St. NW in Ward 4
The attorney general will not tolerate income-based housing discrimination that further limits affordable housing options in D.C., said Beth Mellen, assistant deputy attorney general and senior counsel for housing protection and affordability, in the release.
"Petra illegally exploited the District’s housing voucher program for profit—taking advantage of DC taxpayers as well as tenants without vouchers in need of affordable housing, including seniors and people with disabilities on fixed incomes,” Mellen said. “Today’s settlement both holds Petra accountable and ensures that more Washingtonians can access affordable housing.”
To resolve this litigation, Petra Management Group and its co-defendants will:
- Pay $700,000 to the district.
- Publicly advertise all available rent-controlled apartments at rent-controlled rates. If any rent-controlled unit Petra owns, operates or manages becomes vacant, Petra must post an advertisement for that unit at the lawful rent-controlled rate.
- Reform leasing and advertising practices at all of its D.C. properties. Petra will end its discriminatory leasing and advertising practices across all properties it owns, operates and manages in the district. This includes the three properties originally named in the lawsuit and extends to Petra’s entire D.C. rental portfolio.
- Provide fair housing training to staff. Petra must provide fair housing training to all its staff who provide property management or leasing services for its properties.
- Submit to three years of compliance monitoring by OAG.
The settlement is still subject to final court approval. Multifamily Dive reached out to Petra for comment but did not hear back as of publication time.
This is not the only fine the district has levied against Petra recently. In August, The DC Department of Buildings cited 486 violations resulting in $546,606 in fines against 15 district properties associated with owner Rashid Salem and Petra Development following a multiday inspection initiative.
