The Validity of Ordinances Limiting Condominium Conversion

In 1974, the New York Times ran a front-page story about the dilemma of an elderly woman who lived in a Washington, D.C., apartment building that was being converted into a condominium. On a limited budget, she faced the choice of either finding a new place to live in the tight Washington housing market or paying $2000 down and $422.50 in monthly installments for the same one-bedroom apartment she had been renting for $ 155.00 per month. The woman’s situation is not unusual: a federal study estimates that owners have recently converted 60,000 rental apartment units to condominiums, and real estate experts expect many more conversions in the future. Landlords and speculators find conversion profitable, but tenants and housing officials blame it for exacerbating shortages of rental housing, for displacing tenants from long-established homes, and for adding to the cost of housing. These complaints have prompted several state and local legislatures to regulate the conversion of apartment buildings into condominiums. Conversion laws fall into two categories: consumer protection laws that merely require an owner to disclose fully his plans to convert, but actually protect the condominium purchaser more than the tenant; and stricter laws that prohibit conversions unless the owner or the housing market satisfies certain conditions. The first group is almost certainly constitutional, but the second group’s legitimacy is less clear.