New D.C. legislation wants to end hidden apartment utility fees

Driving the news: D.C. Councilmembers introduced legislation Wednesday that would prohibit property managers of large apartment buildings from separately charging residents for utilities in shared spaces like gyms or hallways.

• If housing providers are to charge tenants for such utilities, the costs should be built into their agreed-upon rent, per the bill.
• Councilmembers Charles Allen, Zachary Parker, Christina Henderson, Brianne Nadeau, Janeese Lewis George and Anita Bonds support the bill.

Plus: The bill also aims to ensure that residents are informed of all unpaid charges within 45 days of moving out.

• Some tenants say housing providers have sent debt collectors for charges like cleaning fees or unit damages without first notifying the resident of the outstanding costs, therefore impacting the tenant's credit, per Allen's office.

Failure to pay utility bills can also lead to evictions, and affordable housing tenants are especially vulnerable to displacement, Washington City Paper reports.

What they're saying: "Anybody who's renting and all of a sudden gets hit with thousands of dollars of extra bills they weren't planning on, it puts their housing in jeopardy," Allen tells Axios.

• Allen's office says the common-area utility charges are often imposed through vague lease language, which masks a building's true rent cost.
• The council member likens it to a consumer protection issue like hidden fees. "It's predatory," he says.

Zoom in: Earlier this year, Allen met with residents of the NoMa luxury apartment building Cielo to discuss what tenants say are unfair common-area utility charges enacted by the property's management company, LCOR.

• Cielo residents tell Axios they weren't properly informed about how much these charges would be and that they've spiked this year.
• Residents say there's no transparency about how bills are calculated and that it seems like residents are charged varying amounts.

"I've never seen anything like this," says Cielo resident Nic Rogers. "I just figured it was a D.C. thing."

• Before Rogers moved into Cielo in summer 2023, he was told that common-area utility charges would be around $40 a month. But the bills started spiking this spring, he tells Axios, and he's recently paid as high as $180.
• "[It's as if] they increased my rent 7% without really consulting me about it," says Rogers. "If it does that again, I can't afford to live here."

LCOR didn't respond to Axios' request for comment.

Zoom out: The D.C. Office of the Tenant Advocate has seen a "conspicuous spike" in the number of complaints concerning this kind of practice since the end of the pandemic, legislative director Joel Cohn tells Axios in an email.

• Many of these concerns come from residents in luxury buildings, he says.

Former tenants of the apartment buildings Novel South Capitol and Illume allege in two lawsuits filed in December that property management groups Bozzuto and Greystar repeatedly charged residents illegal utility surcharges.

• Meanwhile, a group of residents from Navy Yard buildings like Vela and Twelve12 have formed a collective action group against property manager Brookfield Properties, alleging it imposes excessive utility charges.

The other side: Brookfield Properties declined to comment.

• Bozzuto and Greystar did not respond to Axios' request for comment.

What we're watching: Should the Council sign off on the bill, it would go before Mayor Muriel Bowser and Congress for approval.

• "That would be a big change for the city," says Rogers of the legislation. "It would really benefit people in my situation, who are spending, you know, 40% of our salaries on rent just to work here."