Multifamily Client Alert: Key Updates on D.C. Rent Freeze, TOPA/ROFR, and New D.C. and Maryland Legal Requirements and Programs

As summer turns to fall and the kids head back to school, it’s time to get smart on legislative and other developments affecting multifamily housing in the D.C. metro area. This Alert provides new updates on the D.C. “Rent Freeze” ballot initiative, a proposed D.C. property tax assessment reform bill and the D.C. Housing Investment Protection Act of 2026, reflections on the RENTAL Act amendments to TOPA, new Prince George’s County rental housing annual reporting requirements, Montgomery County Troubled and At-Risk Properties, the first acquisitions by “qualified entities” under Montgomery County’s right of first refusal (ROFR) law, and the Maryland Department of Housing and Community Development’s (DHCD) Multifamily Energy Efficiency and Housing Affordability (MEEHA) programs.

D.C. ‘Rent Freeze’ Ballot Initiative (Initiative 88)

Initiative 88 was first submitted to the D.C. Board of Elections (BOE) in November 2025. Originally filed as the D.C. Housing Modernization and Accessibility Act of 2026, the measure was subsequently revised and resubmitted multiple times and approved by the BOE in its current form on January 16, 2026. A key provision of Initiative 88 is a blanket two-year rent increase freeze on all existing and new multifamily housing (except exempt federal and D.C. government housing), with additional 12-month rent increase freezes if the consumer price index for the D.C. metro area surpasses 5% in any subsequent 12-month period. For more background on Initiative 88, please see our prior Alert.

There are currently a few avenues to challenging Initiative 88, including a lawsuit, the D.C. Council’s right to block ballot initiatives, and a request to the United States Congress to intervene. On May 22, 2026, a lawsuit challenging Initiative 88 was filed in D.C. Superior Court by Housing D.C.’s Future, a coalition of industry stakeholders led by the D.C. Building Industry Association (DCBIA). On September 16, the lawsuit challenging Initiative 88 was denied for being untimely, but no ruling was made on the merits of the challenge to Initiative. On September 18, 2026, a notice of appeal was filed. This lawsuit is one of the few avenues to block Initiative 88 as the D.C. Attorney General has ruled that the FILTER Act, a D.C. Council bill designed to prevent ballot initiatives such as Initiative 88 (see our prior Alert for more information), cannot be retroactive under the D.C. Charter. This ruling from the D.C. Attorney General means the FILTER Act would not be able to stop Initiative 88. The United States Congress or the D.C. Council could intervene to stop Initiative 88, even if it is approved by D.C. voters. The D.C. Council has at least partially blocked or repealed at least five ballot initiatives since 1980 and, under the D.C. Charter continues to have the right to do so. The D.C. Council can repeal a ballot initiative outright or can block an initiative by not funding it. Congress has previously only interfered with two prior ballot initiatives (and threatened interference with a third), so it is unclear how successful any request for Congress to intervene would be.

Real Property Assessment and Appeals Schedule Revision Act of 2025 (B26-0252)

Introduced in May 2025, B26-0252 was re-referred to the D.C. Council in February 2026. The bill proposes to change the real estate property tax assessment calendar for when D.C. assesses real property and when property owners can challenge those assessments through the administrative appeals process. The bill would bifurcate the assessment calendar and create a different appeal process for commercial properties or any other “large valued real property,” which is intended to truncate the real property tax appeal process for such properties. Currently, markups of the bill are underway; however, it is not expected that the markups will be available until October at the earliest.

Housing Investment Protection Act of 2026 (B26-0758)

Introduced in July 2026 by Chairman Phil Mendelson at the request of the Mayor, B26-0758 proposes changes to the eviction process, TOPA, and more. Below is a quick summary of some of the changes proposed by the bill:

• Clarifies a housing provider’s right and responsibility to access units for repairs.
• Expands who can qualify for the Local Rental Supplement Program project-based vouchers from potential tenants whose income is 30% of the area median income (AMI) to potential tenants whose income is less than 50% AMI.
• Establishes a 30- and 60-day hearing timeline for an initial eviction hearing based on the grounds for eviction.
• Updates the way notice can be provided to tenants for all forms of eviction to include certified mail, return receipt requested, or a delivery service providing delivery tracking confirmation for the mailing requirements. Note: there is still an additional requirement to either hand-deliver the notice or post it on the front door of the unit.
• Changes the definition of “tenant” in the D.C. Code Rental Housing and Conversion chapter to standardize the definition used for TOPA with the definition of tenant used with housing conversions.
• Adds a definition for “new building” that clarifies that non-residential conversions and certain additions to buildings that create more rental units qualify as new buildings eligible for the 15-year new construction exemption under TOPA.
• Changes the 15-year new construction TOPA exemption to allow the District to purchase newer buildings. This would entail providing the District with an Offer of Sale while simultaneously providing tenants with a Notice of Transfer.

A hearing is scheduled for September 24, 2026, at 9 a.m. to further discuss this bill, which is subject to change as it moves through the legislative process.

Reflections on RENTAL Act Changes

The Rebalancing Expectations for Neighbors, Tenants, and Landlords (RENTAL) Act took effect on December 31, 2026. We reported on the D.C. RENTAL Act in a recent Alert. Among other things, the RENTAL Act amended certain provisions of the D.C. Tenant Opportunity to Purchase Act (TOPA), including adding an Offer of Sale exemption for buildings completed within 15 years of the proposed sale date, as evidenced by a permanent certificate of occupancy (New Build Exemption). Over the last eight months, we have worked with several multifamily rental housing owners to issue Notices of Transfer for dozens of multifamily properties, including properties that qualified for the New Build Exemption. The New Build Exemption dramatically reduces the duration of the TOPA process for eligible properties, since the statutory period for a Notice of Transfer is only 45 days, as compared to statutory periods for an Offer of Sale, which can take up to 420 days. In addition, tenants have more limited rights with a Notice of Transfer.

Currently, the New Build Exemption is limited to newly constructed buildings and does not apply to converted or renovated buildings constructed more than 15 years before the proposed sale date. As noted above, the definition of a “new building” may be subject to change, pending the outcome of B26-0758. For the time being, this may be less of a concern for an office-to-residential conversion (since commercial tenants are not entitled to TOPA rights), as compared to a conversion of a dormitory or an extended stay hotel (where an individual person may be entitled to occupancy of a unit). The owner of an exempt building is also required to disclose in writing that the building is exempt before entering into leases with prospective tenants; however, TOPA expressly provides that the failure of the owner to provide proper notice “shall not affect the validity of the exemption.”

In June 2026, the D.C. Department of Housing and Community Development (DHCD) promulgated new Notice of Transfer and Offer of Sale forms for properties with five or more rental units. The new forms reflect certain changes to TOPA under the RENTAL Act. For example, the new Offer of Sale form contemplates delivery by a commercial delivery service with tracking confirmation, as opposed to previously only allowing delivery by certified mail. The new Notice of Transfer form also calls for owners to provide supporting documentation to substantiate the claim of exemption. This requirement may be easy to satisfy in connection with the transfer of a newly exempt building by including a copy of the permanent certificate of occupancy with the Notice of Transfer materials submitted to DHCD. However, it remains unclear what is required to substantiate other claims of exemption or claims that a transfer is not a “sale” under TOPA for other reasons, such as a transfer of a minority ownership interest or a portfolio sale, since TOPA does not otherwise require owners to provide documentation in support of a claimed exemption.

Prince George’s County Annual Report

In August 2026, the Prince George’s County Department of Inspections, Permitting, and Enforcement (DPIE) announced the release of the Permanent Rent Stabilization Act (PRSA) Annual Report Form and Instructions. The PRSA Annual Report form covers the previous 12-month reporting period from July 1, 2025, to June 30, 2026. Note that in accordance with the sample report form provided on DPIE’s website, a copy of the property’s current rent roll must also be submitted. This reporting requirement applies to all properties, regardless of whether a property is exempt from rent stabilization, and failure to submit the PRSA Annual Report Form by September 30, 2026, may result in the suspension of rental licenses.

Montgomery County Troubled and At-Risk Properties

On September 8, 2026, the Montgomery County Department of Housing and Community Affairs (DHCA) published the FY 2026 Troubled Properties Report. A press release published by DHCA states that the FY 2026 report shows “continued improvement in the health and safety of rental housing in the County,” with the number of units designated as “Troubled” and “At-Risk” declining by 78% and 69%, respectively, as compared to FY 2024. You can read the full FY 2026 report here. Although the Troubled Properties law was passed in 2016, the designation of a property as “Troubled” or “At-Risk” was of limited consequence to owners until July 2024, when the County’s rent stabilization law went into effect. Among many other requirements, Montgomery County’s rent stabilization law prohibits any rent increases for units within properties designated as “Troubled” or “At-Risk,” except as necessary to cover costs required to improve habitability. DHCA inspectors report that owners have been fixing violations more quickly to avoid this restriction under the rent stabilization law. If you have a property or are looking to acquire a property that is designated as “Troubled” or “At-Risk,” we can work with you to satisfy the removal requirements. Once all requirements are satisfied, DHCA will remove the property from the list, and the owner may increase rents in accordance with applicable law. In addition, beginning May 1, 2026, DHCA instituted reinspection fees for multifamily properties, which are imposed after the second reinspection. This creates an additional incentive for owners to promptly correct violations to avoid the additional reinspection fees.

First Montgomery County ROFR Acquisitions by Qualified Entities

Emerging developer and firm client Yoke Management Partners recently collaborated with DHCA to acquire and preserve naturally occurring affordable housing at Tilbury Gardens (in Bethesda) and Argyle Apartments (in Rockville). According to a draft of DHCA’s FY 2027 Annual Action Plan, these transactions marked the first- (and second-) ever exercise of Montgomery County’s ROFR rights by a “qualified entity” since the 2024 amendments to the ROFR law, which permitted the County to assign its ROFR rights to qualified affordable housing developers (including housing authorities for independent municipalities located within the County). In exchange for the assignment of ROFR rights, qualified entities must commit to affordable housing restrictions at the property, which may also be subsidized by the County (e.g., via acquisition financing and/or property tax abatements). According to the ROFR page on the DHCA website, Yoke is one of a dozen non-governmental organizations currently approved as “qualified entities” eligible for ROFR assignments. Although DHCA has not yet published a FY 2025 ROFR Report, the FY 2023 ROFR Report and FY 2024 ROFR Report indicate that DHCA had not exercised its ROFR rights since 2022. As such, Tilbury Gardens and Argyle Apartments may signal a shift in ROFR activity; however, given their relative size (30 and 22 units, respectively), it is not yet clear whether the exposure for institutional scale projects has materially increased.

Energy Efficiency for Multifamily Properties/BEPS Assistance Programs

The Maryland Department of Housing and Community Development’s (DHCD) Multifamily Energy Efficiency and Housing Affordability (MEEHA) programs (MEEHA) are designed to promote energy efficiency, greenhouse gas reductions, and clean energy use in affordable multifamily rental housing developments by providing economic incentives. These programs include the MEEHA EmPOWER Program, which provides funding for affordable multifamily properties to make conservation and energy efficiency upgrades, and the Multifamily Electrification Program, which provides funding for affordable multifamily properties to replace fossil fuel equipment with electric equipment. Eligible property owners can apply for MEEHA funds with DHCD.

Should you have any questions about the matters above, please reach out to our D.C. Metro Area Condo Multifamily Team at CondoMultifamilyTeam@ballardspahr.com.

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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.