OAG “Looking” at Foreign Investment in Hill East Voucher Rentals

1307 K Street, SE.

1310 – 1312 L Street, SE.

Image from Investhome website.

OAG “Looking” at Foreign Investment in Hill East Voucher Rentals

by Larry Janezich

Posted June 13, 2024

Investhome is a company – based in Istanbul, Turkey – that buys DC residential properties – including some on Capitol Hill – adds stories, converts them to micro condo units – markets them to investors in Turkey – rents them to DCHA voucher recipients and manages the properties for 8% of the rent.  Its website urges investors to “Let the United States of America be your tenant.”  An Investhome partner – DILA Construction – replied to a neighbor’s expression of interest in investing by saying, “”These units are not for sale in the DC market. Thank you for your interest.”

Investhomes has two projects in residential neighborhoods in the Hill East single member district of ANC6B Chair Edward Ryder, at 1307 K Street and 1310 – 1312  L Street, SE. 

Last Thursday, Ryder told the ANC6B Planning and Zoning Committee that the Office of the Attorney General (OAG) was “looking into” the sales practices of Investhome and whether they are violating the Fair Housing Act which prohibits sales based on national origin.  He noted the prominent use of the DCHA logo on the firm’s website. 

Ryder said that the OAG Division of Civil Rights and Public Advocacy had reached out to him after several X followers had forwarded Ryder’s tweets raising questions about Investhome’s renting practices.  

@EdwardRyder

“Question for DC Twitter. I have a developer in my SMD who is building a condo building. The condos in the building are being marketed only to Turkish investors, with the aim of then offering them to voucher holders as an “investment opportunity” for the buyers.

The developer confirmed they will not accept or consider DC or local buyers for the condos. They wish to only consider Turkish citizens as buyers who will then in turn “let the government of DC be their tenant”. Can a seller discriminate and only sell to foreign nationals?

For the record I am VERY supportive of more housing, especially for voucher holders.  But blocking local buyers is what I have an issue with (and when it’s a company flush with money from foreign investors it makes it hard for locals to afford housing).”

Ryder told the committee members that his intent had been to ask the Planning and Zoning Committee to write OAG and ask for an investigation, “but at this point the gears are in motion,” so he was not asking for any action now.  OAG told Ryder they will keep him informed of developments. Ryder also engaged the DC Housing Authority and CM Charles Allen who said he would followup with DCHA.

It’s not clear how use of the DCHA voucher system to fill the units being created by Investhome is working out for the company.  But it is clear that the DCHA voucher system – now undergoing investigation by the Department of Housing and Urban Development which is looking at overpayment to landlords – continues to be beset by problems.

Some developers who build multi-unit residences and rent them to recipients of DCHA vouchers end up with rundown and poorly maintained buildings filled with unhappy residents.  Such is the case with a project developed by DC developer Habte Sequar of Pierce Investments.  CHC reported in April of 2014 on Sequar’s appearance before the ANC6A Economic Development Committee seeking support to develop at 49 unit condo building at 1215 K Street, NE.  Sequar completed the project in 2018 and marketed the units to voucher holders. 

The Washington Post published an article on February 16, 2023, describing the current marginally habitable building in an article titled:  “D.C. overpays landlords millions to house the city’s poorest.  Paying above-market rents means fewer people are helped by the troubled housing authority.”  https://bit.ly/3RrsgMz  The Post says, “In an interview, Sequar blamed the building’s state of disrepair on its tenants.”

The article followed a Washington Post piece on January 23, 2023, which reported that federal officials are investigating whether D.C. landlords are overcharging for apartments rented to holders of low-income housing vouchers.  https://wapo.st/3x5FqYR  

On February 1, of this year, Washington City Paper published a story titled “D.C. Housing Authority’s ‘Rent Reasonableness’ Tool Is Susceptible to Fake Online Ads, Leading to Inflated Voucher Payments.”  https://bit.ly/4bTs9BA