Modeling DC’s TOPA Program

Developer-tenant partnerships have a higher likelihood of receiving public financing, observes NHPF's Tim Pryor.

Tim Pryor

Although the country’s affordable housing shortage has been felt as acutely in Washington, D.C., as many parts of the country, developers in the District have a tool to create more affordable housing in a unique partnership arrangement with tenant associations.

The Tenant Opportunity to Purchase Act of 1980 affords tenants and developers in the District of Columbia with the opportunity to partner on purchasing the building in which tenants are renting. Because TOPA ensures tenants have enough time to assemble the right financing and, once the developer is on board, TOPA offers residents a powerful voice in the selection of building amenities and other construction issues.

Developer-tenant partnerships are also more likely to get public financing. TOPA deals receive priority scoring from the D.C. Housing Production Trust Fund, the D.C. Department of Housing and Community Development’s subsidized subordinate financing program. Therefore, partnering with tenants gives developers a leg up in a very competitive market and benefits to tenants help developers, too.

The NHP Foundation has acquired several properties in Washington, D.C., in partnership with residents, through TOPA, including Parkchester, Benning Heights, Woodmont, Anacostia Gardens, Ridgecrest Village Apartments, Takoma Place Apartments, Elm Gardens Apartments and Columbia Heights Village Apartments.

Other communities are beginning to consider their own version of TOPA. These programs go beyond creating strong partnerships, in which developers work with residents to ensure they have a significant say in purchasing, developing and rehabilitating the properties they call home. TOPA buildings with tenant-friendly developers selected by residents tend to experience fewer tenant-owner disputes and, sometimes, less renter turnover as well.

Developers in TOPA partnerships see to it that residents have a seat at the table in discussing topics such as: security, customer service, resident services programming, and management overall in a more unified way. The two groups work hand in hand on the pre-construction process as well.

Can the DC TOPA model be replicated in other communities? Los Angeles, Portland, and Massachusetts have explored the idea and, if those markets can make the structure work, it will become a win-win that could spread to even more of the country.

Tips for Success

The following strategies can help communities strengthen the idea of developer-tenant property acquisitions:

  1. Do your homework. Research local housing law to see if there are precedents for TOPA-type property purchases, and make sure you are well-versed on DC’s TOPA program before proceeding.
  2. Learn about the advantages for developers and tenant associations. Benefits include having an extra-long time period for developers to create trust in associations and ink a deal with partner (up to a year), and a preference from public financing sources for projects that involve developer/tenant partnerships.
  3. Obtain “success stories.” Build a file of case studies that showcase how the model benefits developers.
  4. Lobby your local legislators. Check local laws and talk to lawmakers to create a strategy to promote such ownership programs. Opportunities include attending and speaking at County Board meetings, penning op-eds and seeking one-on-one meetings.
  5. Build coalitions. Work with other parties—including experienced attorneys and nonprofit developers who have experience working with tenant associations—interested in supporting the creation of more affordable housing via this model.

 As we continue to face an overwhelming shortage of affordable housing in the U.S., it is vital to look at every possible solution. Engaging tenants in the development process is an important one.

Tim Pryor is vice president, Acquisitions, NHPF.

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