In a city separated by race and class, D.C.’s Housing Authority is trying to bridge the divide with a seemingly simple solution: Paying landlords competitive rates to house poor residents.

The public housing agency covers rent on behalf of more than 18,000 low-income households in D.C. via its housing voucher programs, which receive both federal and local funding. Under the program’s current rules, landlords in wealthy enclaves such as Chevy Chase can charge voucher holders as much as $2,648 a month with utilities for a one-bedroom apartment. The tenant chips in 30% of their income and the voucher takes care of the rest.

The system works for D.C. residents like Miyanna Walls, a 27-year-old mother whose voucher covers most of the $3,800 rent for her three-bedroom apartment at Connecticut House in Van Ness. The neighborhood is safer than the one she left in Ward 8 less than two years ago, she says.

“Right now in our old neighborhood I’m losing childhood friends [to violence] almost every week,” says Walls, who is studying to earn a Bachelor’s degree.

If Walls still lived in Ward 8, her voucher would be worth less, too. The housing authority currently sets voucher rents around $1,435 — utilities included — for one-bedroom units in high-poverty neighborhoods such as Anacostia and Barry Farm.

According to DCHA, the varying rates keep voucher rents on par with the private market and use public dollars efficiently, in addition to promoting socioeconomic diversity in D.C. neighborhoods. But as the agency prepares to raise maximum voucher rents for the first time in more than three years — pending a vote on Wednesday by the housing authority’s board — its leaders are under scrutiny by residents and tenant advocates who say generous voucher subsidies have created a parallel housing market that erodes rent control and rewards property owners seeking to cash in on the poor, especially in pricey neighborhoods like Van Ness.

“Landlords can take advantage of housing vouchers to make windfall profits,” says Harry Gural, president of the Van Ness South Tenants Association. “You can make $500 or $600 a month above the market rate if you rent to voucher recipients.”

Led by Gural, the Van Ness South Tenants Association and eight other Northwest D.C. tenant groups have emerged as vocal critics of the rent standards as the housing authority considers raising them in the coming fiscal year. Critics say high voucher rents create a powerful financial incentive for landlords to replace longtime tenants with voucher holders, whose rents aren’t covered by rent control.

“Rent stabilization is being undermined. That’s the ultimate target here,” Gural says.

D.C.’s nearly 40-year-old rent control law caps annual rent increases at the rate of inflation plus 2% at larger apartment buildings constructed before 1976. Roughly one third of rental units in D.C. fall under rent control, but that number has decreased over time, according to the D.C. Policy Center.

Gural says he doesn’t have hard proof that landlords are charging voucher holders more than everyone else, but he says there’s compelling evidence. He points to websites such as DCHousingSearch.org, where landlords advertise subsidized apartments for low-income residents. One listing on the site is for a one-bedroom apartment at the Park MacArthur in Foxhall Village for $2,467 a month, the neighborhood’s maximum voucher rent without utilities. On apartments.com, the same property lists a similar one-bedroom apartment for $1,900. The building’s management company, Robtco, did not respond to questions about the discrepancy in advertised rent prices.

The D.C. Council passed a law this year barring landlords from charging voucher recipients higher rents than tenants without subsidies.

DCHA Executive Director Brenda Donald denies that voucher rents have become a cash cow for landlords. “The narrative that we are overpaying and therefore creating some huge incentive for landlords to rent to voucher holders is wrong,” Donald says in an interview with WAMU/DCist. “This is not incentivizing. This is just paying for a service.”

Some advocates say the money is well spent. Adam Rocap, Miriam’s Kitchen’s deputy director, says the formerly unhoused residents his organization serves have benefited from the housing authority’s current rental rates, which were set in 2018.

“If you go back to those years before 2018 when they raised the rent payment standards, it was very hard to help clients find units that they wanted to live in,” says Rocap. “We were mostly having to look in Ward 7, 8, or 5. There was far less choice, which is not what sets people up for success.”

More than half of D.C. residents with a federally funded Housing Choice subsidy — the city’s largest voucher program —  live in Wards 7 and 8, according to DCHA. Eleven percent live in Wards 1, 2, and 3, combined.

The housing authority is seeking to cap voucher rents at $3,020 for a one-bedroom apartment, citywide, starting in October. (Individual voucher rents would still be subject to approval based on a neighborhood median, according to DCHA.) That ceiling is equal to 187% of Fair Market Rent, a level set annually by the U.S. Department of Housing and Urban Development. The housing authority says most of its rents are well under the limit, despite an earlier third-party analysis that found the city was overpaying voucher landlords to the tune of $21 million. DCHA says those findings were based on bad data.

But while some advocates say the rent ceilings work well, others say they have unintended consequences. After rents increased, real estate developers began scooping up rent-controlled buildings in hot neighborhoods, squeezing in more bedrooms, and marketing the redeveloped properties to voucher holders, says Anita Ballantyne with the D.C. nonprofit Housing Counseling Services. Ballantyne says that’s both good and bad. More housing choice is an obvious benefit, especially for voucher holders who continue to face illegal housing discrimination, she says. But when developers flip aging buildings into exclusive residences for subsidized tenants, she says, the city loses more rent-controlled property for people who aren’t fortunate enough to have a coveted voucher.

“If the voucher rents were lower, it wouldn’t be happening in this way, and at this rate,” Ballantyne says.

One company that appears to be capitalizing on high voucher rents is Petra, a D.C.-based development and real estate management firm. In 2018, Petra paid $4.7 million for a rent-controlled apartment building at 5616 13th St. NW. The tenants signed away their rights under D.C.’s Tenant Opportunity to Purchase Act in exchange for buyouts from the company, according to the firm that brokered the sale. Petra rebranded the building as The Madison and set the voucher rent at $2,520 for a studio apartment, according to a price sheet the company sent to government officials. Asking rents are roughly $500 lower for similar apartments in the same zip code, a search on RentCafe.com shows.

Petra’s founder, Rashid Salem, could not be reached for an interview.

The company is one of many housing providers that have been urging the housing authority to raise rents. Another is Madison Investments, founded by Barry Madani. The real estate investor says it’s good policy for the housing authority to pay higher rents in wealthy neighborhoods. If they didn’t, he says, landlords would be much less likely to rent to voucher holders.

“The reality is that housing voucher tenants is considerably more expensive than housing market-rate tenants,” says Madani, whose real estate portfolio includes hundreds of units leased by voucher holders. “They’re much more hard-wearing tenants. Typically, they’re not cleaning their units or not vacuuming the unit. They’re very hard on appliances.”

Ben Soto, a real estate attorney who sits on Eagle Bank’s board of directors, agrees with Madani. He says lenders like Eagle Bank are hesitant to finance housing projects with a high number of voucher tenants unless the rents are relatively high. “There’s just more issues associated with voucher tenants,” Soto says. “Some of them have mental issues. Some have a hard time understanding how to take care of a unit.”

Adam Rocap with Miriam’s Kitchen says he’s well acquainted with similar stereotypes about voucher recipients. “Sometimes there’s a lot of misunderstanding about what is the source of quote-unquote ‘problems’ in a building,” Rocap says. “I think people are quick to say it’s not only voucher holders, but voucher holders who used to be homeless. And I think a lot of those assumptions are not always accurate.”

Harry Gural with the Van Ness South Tenants Association says his quibbles with the city’s voucher rents aren’t rooted in bias.

“Everybody I know who’s working on this issue are dyed-in-the-wool liberals,” says Gural, who used to work for former Democratic Congressman Barney Frank. “We’re pro-using vouchers. We’re pro-affordable housing. We’re pro-helping the homeless.”

But if Gural had his way, the city’s voucher program might not be able to help residents like Miyanna Walls.

The mother of four says she’s felt the sting of racism since she and her four children moved to Van Ness. Some of her white neighbors assume she isn’t a tenant when she walks around her building, she says, and residents recently called the police on her while she was trying to dispose of mattresses outside the property.

“The Karens in my building — it’s a hassle,” Walls says.

Living in Northwest provides her peace of mind in other ways, however.

“I’d rather deal with racism from strangers than keep on making my children learn how to fall to the ground to dodge a bullet,” Walls says. “It’s terrifying when you have to grow up like that.”