40+ years of experience with TOPA in Washington DC:

TOPA has been in Washington DC for over 40 years and has not widely spread across the country because there are serious problems with it. In fact, DC started to unwind parts of TOPA in 2018 and passed an amendment to exempt Single Family Dwellings (SFD) from damaging TOPA restrictions. In DC, TOPA no longer applies to single family homes, ADUs and single rental unit in a condo, co-op or homeowner association.

The so-called “Tenant Opportunity” to Purchase Act (TOPA) is a False Promise. The bureaucratic and ineffective TOPA program strips affordable housing funds from efficient approaches that directly help tenants and homeless residents. DC prioritizes 3 effective housing programs over TOPA as is reflected in the funding budget each year:

1. Rental assistance to directly help low-income tenants.

2. Down Payment Assistance to directly help tenants purchase homes (first time homebuyer program).

3. Shelter programs with supportive services like drug treatment for homeless residents.

Serving as our nation’s capital, Washington DC (DC) had special access to vast funding and became a perfect Petri dish for testing many housing ideas. The city collected performance metric on different housing approaches over many years and allocates funds based on tangible outcomes. The DC Local Affordable Housing budget is an astounding $291 Million for last year, Fiscal Year 2020. In 2020, DC devoted about 50% of its total affordable housing budget toward rental assistance while TOPA only received approximately 5%. Downpayment assistance and homeless shelter programs received more priority and funding than the ineffective TOPA program.

During the 40 plus years that TOPA has been in Washington DC (DC), it was so inefficient that the people administering the program avoided collecting data and could not produce performance numbers required in formal city reports. The TOPA program in DC can not produce data before 2002, lacks data stretching decades and also recently failed to be forthcoming with data in official fiscal audit and budget oversight reports. TOPA data is spotty or highly selective, unlike effective affordable programs which submit concrete numbers annually. What little TOPA data available is often not in formal financial review and disclosure reports, is selectively presented out of context. The people administering TOPA in DC still choose not to collect TOPA outcome data — they do not track completed sale to tenants because the rate is so poor and instead choose only to report TOPA notices. TOPA gets very little funding in DC due to its poor performance over decades.

The below graphs show DC spent over $150 million on rental assistance in FY 2021 and over $30 million in the prior year for downpayment assistance to promote home ownership. By contrast, TOPA received only a small fraction of the Housing Production Trust Fund (HPTF). The approved budget for TOPA in FY2021 is a mere $10 million out of the $100 million in the Housing Production Trust Fund. The local total affordable housing budget is around $300 million annually in DC for the last few years.

The proposed local TOPA legislation is much more problematic and restrictive than TOPA in DC, and thus much more worrisome for Bay Area residents. TOPA has forced deed restrictions that is being sold using the benign sounding “permanently affordable” euphemism. Unlike unencumbered properties, these forced deed restrictions would drop property values by hundreds and thousands of dollars, wiping out life long savings for many seniors and leaving them bereft of the means to pay for medical expenses and care for themselves in retirement. In practice, these restrictions would also make it difficult to maintain homes in habitable conditions which is especially detrimental to resident renters.

As is historically consistent, housing programs with heavy government regulation and management such as the TOPA program or Public Housing Projects has resulted in poor outcomes for residents. In DC, poorly managed Public Housing Projects led to dilapidated buildings with leaky plumbing, hazardous lead, rodent infestations and toxic mold which have sickened families and sent many children to hospitals. An estimated 7000+ of DCs’ 8000+ housing units are severely deteriorated, requiring HUD to take over management. Many social or public housing projects across the country experienced similar deteriorated living conditions. The local TOPA program would be the most convoluted and heavily regulated government run social housing program, which does not bode well for our Bay Area cities or residents.

Another Affordable Housing lesson in DC worth mentioning is the potential for misuse of public fund by trusted officials in the name of affordable housing and helping homeless residents. An auditor in DC had to issue a subpoena seeking documents during an investigation. The auditor was repeatedly stonewalled by bureaucrats and only eventually obtained the needed data from a concerned whistle blower. The subsequent DC audit report found “…the (government housing) agency appeared to have a hands-off approach to projects once they had been selected for funding.” There was a lack of accountability in measurable outcomes and insufficient transparency in the use of public money for housing. As a result, DC Council member Elissa Silverman introduced a bill, the Housing Production Trust Fund Transparency Amendment Act of 2019 that would require DC’s Department of Housing and Community Development (DHCD) to make information more public for increased transparency.