Legal Aid Negotiates Settlement for Public Housing Tenants Overcharged for Rent
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Legal Aid announced today that it has reached a settlement, potentially worth over $265,000, for approximately 70 public housing tenants overcharged for rent. The proposed settlement would resolve a federal class action lawsuit Legal Aid filed in November 2015 alleging that the owners and managers of a D.C. public housing development had miscalculated utility allowances to which their tenants are entitled. The settlement, which has been submitted to the U.S. District Court for the District of Columbia, would provide monetary relief to all class members for past rent overcharges and also would reduce tenant rents over the next two years by increasing utility allowance amounts.

Under federal law, tenants in subsidized housing are supposed to pay no more than 30 percent of their income—the level generally considered affordable—in rent and utility costs. To put this into practice, landlords of such properties are required to establish a “utility allowance” that estimates how much the average tenant, living in a home of similar size and design, should pay for utilities. That dollar figure is calculated into the tenant’s rent, and if the family’s income is low enough, it will receive a check each month to help cover utility bills.

“When landlords miscalculate utility allowances, subsidized units quickly become unaffordable for low-income tenants, putting them at risk of eviction,” said Beth Mellen Harrison, a Supervising Attorney at Legal Aid and one of the lawyers for the plaintiffs. “The proposed settlement agreement provides real relief to families who have been struggling for years to pay their bills and remain in their homes.”

The complaint in this case, which Legal Aid filed on behalf of four named plaintiffs, alleged that public housing tenants at Capitol Gateway Family Rental, a mixed-income property that includes 61 units of privately operated public housing, had effectively experienced rent increases of up to $200 per month beginning in 2014 because the owners and managers of that property had systematically failed to follow federal law in determining how much the tenants’ rental subsidy should be adjusted for the utility expenses. For tenants living on very low and often fixed incomes, this change posed and continues to pose a significant hardship.

Under the terms of the proposed settlement, Defendants would pay $100,000 into a settlement fund for distribution to the class members based on the type of apartment they rented and the number of months they resided there during the relevant time period. In addition, Defendants would adjust future utility allowances for the apartments at Capitol Gateway over the next two years, which are valued at roughly an additional $166,215 total to current and future tenants.

Mildred Kinard, one of the named plaintiffs, said of the settlement, “I am pleased that we got something accomplished. It means a lot for my rent to go back down, because now I can concentrate on paying my utility bills, which keep going up.”

Legal Aid thanks Ms. Kinard and her three courageous co-plaintiffs who, for almost three years, have served ably as representatives for the class of affected tenants in this case. We would not have been able to achieve the important systemic results contained in this proposed settlement without their willingness to stand up for their rights and their perseverance in vindicating them.

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