Attorney General Brian L. Schwalb announced Wednesday a landmark settlement mandating the owners of Foster House in D.C.’s Shaw neighborhood to pay $1.65 million to tenants and the District and commit to preserving affordable housing at the site for at least 30 years.
The agreement follows a lawsuit by the Office of the Attorney General (OAG) alleging years of neglect that endangered tenants and forced many to leave their homes.
The settlement resolves claims that New Bethel Baptist Church Housing Corporation and their partner, Evergreen 801 RI Apartments LLC, failed to address widespread code violations at Foster House, a 76-unit building. The lawsuit outlined extensive damage and poor living conditions, including severe water leaks, mold, rodent infestations, and malfunctioning elevators.
The DC Superior Court appointed a receiver in April 2023 to oversee emergency repairs.
Schwalb’s office secured commitments from New Bethel and Evergreen to sell the property to a buyer who will covenant to maintain at least 76 affordable units at Foster House for the next three decades. If New Bethel and Evergreen do not secure a buyer who agrees to these terms within one year, they will face additional penalties exceeding $6 million.
Under the settlement terms, the owners will pay $650,000 directly to tenants impacted by the conditions and $1 million in civil penalties to the District. Additionally, the agreement includes forgiving all unpaid rent by current and former residents. The penalties aim to deliver both restitution and a deterrent against future negligence.
“My office will always have tenants’ backs,” Schwalb stated. “We will not allow District landlords to systematically neglect their buildings to force longtime residents out of their homes.”
He added that the settlement supports the Foster House tenants and preserves affordable housing in the fast-developing Shaw neighborhood.
Former Foster House tenants described years of deplorable conditions, including rat infestations, water leaks, and mold that led to serious health issues.
“The mold in our apartment left my young nephew struggling to breathe, and my mom’s health declined rapidly because of the conditions,” said Joy Perry, who lived at Foster House. “She passed away in June, and I believe she might still be with us if we had been living somewhere else.”
Ericka Malloy, president of Foster House Tenants’ Association, expressed her gratitude for the outcome while pointing out that the landlord had abandoned the tenants.
“No one should have to live with rats coming into their home through holes in the walls and cabinets, infestations of huge flying bugs, or water coming through the roof, floors, and ceilings — but that’s exactly what my neighbors and I were dealing with,” Malloy said. “Conditions in our building were awful, and we appreciate Attorney General Schwalb and his team for fighting for us and making us feel heard.”
The settlement also requires New Bethel and Evergreen to repay over $700,000 in emergency repair costs the District covered through the Tenant Receivership Abatement Fund. Should the owners fail to meet the terms of the affordable housing covenant or close on the sale within the allotted time, they will face additional fines totaling over $6 million, including $800,000 in restitution for tenants and $5.25 million in penalties to the District.
“This settlement is a significant win for dozens of Foster House residents and the community as a whole — putting money back in tenants’ pockets, holding the owners accountable for threatening tenants’ health and safety and preserving affordable housing in the rapidly developing and historic Shaw neighborhood,” Schwalb declared.