The District of Columbia’s Tenant Opportunity to Purchase Act (TOPA) states that, before any rental housing unit in the city may be sold, the owner must give notice to each tenant and to the mayor. The tenants then have a right of first refusal to purchase the property. The tenants may assign this right to a third party. The tenants have at least 120 days to negotiate a sale. This time period can be extended for another 120 days if a lending institution provides written notice that the tenant association has applied for financing. Some Washington, D.C., affordable housing developers have partnered with tenant groups to purchase and rehabilitate properties, often in complex transactions using tax credit financing.

For example, Somerset Development and NHT/Enterprise Preservation Corporation worked with tenants to acquire and rehabilitate Galen Terrace, a federally subsidized 84-unit community in serious disrepair and threatened with sale. The D.C. Housing Finance Agency provided $5.6 million in tax-exempt bonds and $4.65 million in tax credit equity toward the acquisition and renovation, while the city’s Department of Housing and Community Development provided $3.25 million in CDBG funds. HUD renewed the complex’s Section 8 rental assistance contract for another 20 years.

To help tenant groups purchase properties themselves, the District operates a First Right Purchase Program, which makes low-interest loans and technical assistance available directly to tenant groups for the purchase and rehabilitation of their buildings. A 2013 analysis found that this program has helped to preserve nearly 1,400 units of affordable housing over the past decade.

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