Dear PoPville – Question about Renting Basements

Photo by PoPville flickr user Rich Renomeron

Dear PoPville,

Last year we bought a house in Columbia Heights with a very nice finished basement. We’re looking into whether it is legally rentable, according to the byzantine guidelines of our fair city. An initial search turns up no Certificate of Occupancy for the property (the first requirement for renting a basement, before you get a business license). We’ve been told that, what with the many required inspections, architectural plan submissions, and fees, we’re looking at at least $5000 just to get the C of O – never mind whether we have to do any work to get the basement in line with code!

My question is not whether that is a plausible price (it’s ridiculous, but I can see it reaching that point), but whether DCRA was making any effort to decrease the price or streamline this process for non-commercial basement landlords or those whose property is likely under code. Years ago a earlier PoPville question seemed to incentivize DCRA to get their act together with the Rent My DC Basement site, but its been defunct for over a year and doesn’t seem like it was terribly helpful or went very far to make this process easier or more affordable. Is DCRA still working on reforms for basement rentals?

Are they aware they are incentivizing potential landlords to rent illegally? What’s crazy is that I could rent my whole house – basement included – without having to jump through a quarter of these hoops.

53 Comment

  • I went through the paperwork to have my rental unit registered, and it really wasn’t all that bad. You first get a CofO, which doesn’t cost you anything or much, if I recall, assuming your place is up to code. After that, you apply for a business license after a short review of your taxes to make sure you don’t owe the city money. The $5000 figure seems specific to what you personally need to do to pass basic codes, like having a window in the bedroom and a high enough ceiling.

    • actually, this assumes that your house is classified as a single family home. if its not, the conversion process is quite annoying and typically requires hiring an architect to submit plans of work that was already completed.

      • You’re right. And isn’t a single family home what the OP is describing?

        • (sorry to babysit/responding to couple questions). It’s now a single family home. Also, so far as I understand it, the $5K estimate was only for inspections, fees and architectural plans for work that was already completed (prior to purchase), NOT any additional work. Additional work may indeed be required, but that would be on top of the $5K estimate. P.S. We very much want to do this legally! But are flabbergasted that legally renting what appears to be an under code, very nice basement would cost thousands of dollars just to get permits and multiple inspections, since we could rent our full home legally without these requirements. P.P.S. Strange that experiences seem to vary on total hassle vs. no hassle at all? P.P.P.S. Ceiling height and separate meters – check, we’re good to go there. Stairs – really? We have separate back and front entrances, but you’re not allowed to have stairs that connect the main unit and the basement? Crazy.

          • The CoO is for the whole house, which includes where you live upstairs and your renter lives in the basement. It doesn’t cost much of anything to get one.

            If your basement unit is fully separate (including separately metered) from the rest of your place and it meets the required codes regarding exits, ceiling heights and break away bars on windows, it does NOT cost thousands of dollars for permits. The only large charge is about $250 for the business license. I just went through this process and am speaking from experience.

          • If you have stair leading to the main of the house, the space is not entirely independent, so to speak. The fees do sound high, for multiple inspections, etc. The only thing I’m wondering is (and it’s a total guess in the dark) that maybe the people who did all the work making it legal actually did not get permits and inspections and so the city is looking to you to pay the back-fees? It’s a total guess but when you ask the question, that’s what comes up in my mind. Anyone in the know who can weigh in on this.

          • anon 3:32, your house was already zoned multi family unit, right? that streamlines the process. OP sounds like they have a single family home. that makes things much more difficult. it needs to be reclassified as a multifamily home and requires full mapping of all the hvac, outlets, entrance, etc. it is difficult, but not impossible for a layman to prepare. i looked on CL and the cheapest i could find was 2k. am still considering preparation of the drawings, but in the meantime i just rent to whomever doesnt ask for a CoO, which is most people.

          • Be careful f.d. You rent out to people who don’t care about a CoO and that’s all fine. Except for when a problem arises and then that “insignificant” CoO will become a real point of contention for you. Hope it never happens to you.

  • I went through this process recently and it is indeed a hassle. However the hassles if you rent illegally and encounter any dispute with a tenant could be far worse.

    First of all make sure you need a C of O at all. If you can access the basement from your part of the house, chances are you don’t need a C of O. If the basement has separate heat/ac/electric and a private entrance then you may need a C of O. I would read through that Rent my Basement site even though it is not active. There is some good advice and guidance that is still in force.

    Don’t hold your breath waiting for DCRA reform. Honestly.

  • I don’t know how much the initial application to get a C of O costs in this city but first I would make sure that your basement fits all the legal requirements to become legal and get a C of O. I don’t doubt the process is costly and it is time-consuming because everything after a C of O adds up, so it’s not a process without expense. There are plenty of people who rent out basements illegally and the city is aware of this. I would advise (but something for you to think about) to do it legally, if you’re serious about doing this. I say so because DC is already pro-tenant (to a fault actually) but a LL has no recourse if you don’t have the licenses, etc. Hopefully it would never come to that in a LL-tenant relationship but that could be a risk and you have to decide whether or not that is one that you would be willing to take.

  • dcra is a wonderful agency! i especially commend the indian gentleman who works in the homeowner center. i found him to be very responsive to my concerns and that he answered all my questions. highly recommend seeking him out. also, they have taken the open kitchen layout that everyone likes and applied it to their office. its beautiful and i hope it receives the recognition it deserves. we should feel lucky to pay them whatever permit fees there are to do basic renovations to our property.

    • +1 The homeowners desk (where they expedite permitting) and specifically the gentleman mentioned above were both surprisingly helpful, knowledgeable, and reasonable.

      • I don’t know about DCRA, but I’ve been to that same space in SW a few times to get emergency parking permits for moving. I agree, it’s a great, citizen-friendly, space, and the process was supereasy. Nice to see government working!

    • i want some of what you’re smoking or is your sarcasm too subtle?

      • I was thinking from “We should feel lucky to pay them whatever permit fees there are to do basic renovations to our property” that the commenter was being sarcastic, but was puzzled by the subsequent earnest-seeming +1.

    • Gosh, was it necessary to point out that he’s Indian? Because that sounds like r-a-c-i-s-m to me!!!!

  • My understanding has been that, with the exception of basements specifically redone in order to meet D.C.’s standards for a certificate of occupancy, most basements in D.C. _don’t_ qualify for a C of O.

    Most basements do not meet the minimum ceiling height (the ones that do were usually specifically dug out for this purpose), do not have separately metered utilities, and have stairs connecting them to the rest of the house (not allowed for a C of O).

    As far as I can tell, from most landlords’ perspectives, doing the necessary renovations to get a C of O is so expensive and time-consuming as to not be worth it.

    • It’s indeed expensive, but if you think in the long run, $5,000 is likely less than three-months-worth of rent you’ll be collecting. That’s not a bad investment, assuming it is the worst case scenario for you to be legit.

      • $5K might be the OP’s worst-case scenario (unless he/she has to remove the stairs), but for most of us, the worst-case scenario cost is way more than that.

        I believe the cost of having a basement dug out to meet the required height is in the tens of thousands. Getting the electricity, etc. redone would be in the thousands of dollars.

        For most people, it’s just not worth it.

  • What if I just want to rent out a room in my house? Do I have to jump through similar hoops? What if the room just happens to be in the basement?

    • I agree with ‘potential future landlord’ here. Regarding your question, you do not have to go through similar hoops if you just want to rent out a room in your house. Also, I believe if the basement has access to the rest of the house and you write up in the lease that the basement renter is able to access the rest of the house, then you are not required to abide by these basement regulations. That may be complete hearsay but I’ve heard it now from a number of people.

  • Most people don’t bother because it only comes up as an “issue” when you have a tenant (who knew all along there was no CofO, or didn’t care) who you’ve pissed off and wants to stick it to you, which in the end usually means they’ve created as many problems for themselves as they have for you.

    And despite all the horror stories, that doesn’t happen very often.

    There is a general “look the other way” understanding with everyone involved because the city cracking down on it would lower property values, remove what…20-30K apartments from the market, skyrocking the prices on the rest. Lots of rentable english basements are a good thing for the city, whose benefits far exceed whatever negatives are associated with it.

  • You only need a business license if you rent more than 4 units. You only need a CO if it’s seperaty metered, other wise you are renting an unlawful suite and it is not illegal.

    • I believe you need a business license, even if it’s only a basement apartment. Anytime you are doing “business” you need a business license to do or engage that business practice.

    • You need a business license to rent any unit you own. I own a condo in a building and I had to get a license. Its a pain but not impossible. the “EZ” form on line is just the start. It also required a trip to OTR for a “clean hands” report and another to DHCD to get a letter stating I was subject to rent control. Then I had to wait for an inspector to show up (in a 3 hour window of time). he spent about 90 seconds looking around and signed off on the paperwork. Next is waiting a week for the license. Of course the very first thing DCRA makes you do is pay the license fee! I think it was around $200. I guess they figure you will give up somewhere in the process so they better get your money on the front end.
      I looked at house with a potential rental basement and got a quote from a contractor for $35k to dig out the floor so the ceiling heights would meet requirements. yes, thats a shitload of money but assume you could rent the basement for 1500/month, it will pay for itself in a few years and add about 30-50k in value to your home if its a LEGAL rental.

  • Yes, getting the necessary permits should be as streamlined as possible, but the process is there for a clear reason. Making sure the apartment is up to code is necessary for both making a buck off of your basement AND being a responsible landlord.

    • Can you explain how it is irresponsible to rent out a basement with a 6’8″ ceiling? How does that pose a hazard to anyone? As far as I can tell, the only thing that rule does is irritate homeowners who don’t want to spend $15,000 to gain 3″ of ceiling height, and drive people to rent their basement illegally even if they’re predisposed to do things right.

      • Without expertise in this area I can’t say for sure what the reasoning behind it is, but yeah, it seems entirely reasonable that ceilings should be 6’8″. I’m not arguing that requirements shouldn’t be scrutinized, I’m arguing that its generally good that we have them and that landlords should either bring their basement to code or shut up about not being able to rent it.

      • Why would you spend several thousand dollars just to lower your basement floor three inches?

        If you’re going thru the process, why not set the basement ceiling at the proper 8′ height?

  • What if you’re renting the entire house, including the basement and the basement doesn’t meet the code, height, window…. requirements. Are you still required to get a CofO on the basement? What if your tenant, who is renting the entire house, decides to live in the basement? It’s not like you can prohibit that.

    • As in renting the entire house to someone, which includes the basement? Or the house has been divided into apartments that you are renting out and want to also rent out the basement as an apartment (even though it’s not legal for some reason). Good question. I would think that the city would not have issued a CofO or business license if it found something like that but am not sure.

      • as in renting the entire house to someone, which includes the basement.
        Are you supposed to prohibit the tenant from living in the basement? And if not then why can you rent the basement with the house but not separately?

    • Only problem that arises is if the tenant decides to turn against you and cite no CofO in court…

      I’d love an official confirmation on not needing a CofO if the stairwell and meters aren’t separated. That would really make my day. I’ve found by keeping my stairs in to the basement unit and classifying it as an “In-Law Suite” That I’ve avoided most of the pitfalls of refinancing and rules in DC… My basement unit still has a front and back door (English Basement) mind you!

  • Again, the $5K estimate was only for necessary architectural plans for work completed prior to my purchase of the home, inspections and permit fees, not for any additional work required to come into code. My very fuzzy understanding is that multiple inspections/hoop jumping for the C of O are required because, though basement was “finished” as though it was going to be separate unit, the property wasn’t zoned that way at the time and permits weren’t authorized that way (this was before we purchased home). So, due to a “change in use,” various separate inspections are necessary to check heating, plumbing, electrical, fire alarms, etc. The basement is separately metered, with appropriate height and separate entrances (except that darned connecting stairway we need to deal with, apparently). For those who are learning from this thread, to legally rent your basement you would ALSO need a rental basic business license, following acquisition of a C of O, as well as tax registration for your business as well as a rent control permit).

    In my dreams, I would have loved to be told this is all a bunch of hand-wringing and we just need to stand in 4 lines, fill out 20 pages of paperwork and get a single inspection that can be taken care of in a week. What I don’t want to do is waste time barking up the wrong tree/process/long line, but that seems inevitable (except perhaps this nice new Homeowners Center?).

    • Seems like the best approach would be to go down DCRA and talked to that nice Indian gentleman mentioned above at the homeowners center and see what you’re up against. Hopefully that “stairwell to the main house, no separate meter and heater/AC” thing is correct and you won’t have to jump through many hoops.

    • how unfortunate that this thread is likely to confuse not clarify.

      it is not as simple as just applying for a CoO and having an inspection.

      if you live in a single family home and want to convert it to a multifamily home – a prerequisite to receiving a CoO – you have alot of work to do.

      DCRA deserves scorn for 1) not clearly stating how difficult this process is 2) not taking real measures to make it easier.

      OP, we should not have to go through all this BS to do something that is in the city’s interest.

      • So any SFH that wants to rent out their basement apartment legally is actually not a SFH but a mutifamily home that needs to be rezoned?

      • If this is true, doesn’t this also change the mortgage loan, the rate and the requisite down payment?

        • as i understand it, it would then be classified as multifamily/multiunit, and yes it would change the appraisal and the tax burden.

    • more on my experience. to avoid paying someone to do these bs designs for work already completed, i tried doing it myself. first attempt was with google’s sketchup program. its not too difficult to learn, but not right for these purposes (when i showed DCRA my first draft they said “nice try” and encouraged me to hire someone but i did learn that 3d was not necessary). so i tried to learn draftsight which is a free program but much more complicated. another option which is a sort of middle of the road that i haven’t tried but may work is floorplanner. anyone have advice?

  • Who has the most to lose from a dangerous rental? 1. The homeowner who will be sued if the tenant is harmed. 2. The insurance company that insures that homeowner.

    Who has the most to gain if more rental units are made available to the most desirable revenue-generating demographic in DC? The DC Govt.

    So DCRA should get the hell out of all regulations entirely and simply require that a homeowner provide a certificate of safety from his or her insurance company, based on the assessment of a qualified home inspector.

    Homeowner pays for the private inspection. Over and done with.

  • DC is actually working to make some of this easier through the zoning update process. The new proposed zoning changes will allow basement apartments in R-1, 2, and 3 zones as a matter of right:

    If you want to know why it’s so difficult, look at the fact that some people are opposing this reasonable change:

  • I wouldn’t bother. The District is incredibly pro-tenant, and you might end up having a tough time getting rid of problem renters. I think it’s more hassle than it’s worth.

    To rent out a basement, said basement must have: front and rear entrances; window exits in all bedrooms, and a minimum ceiling height (although I forget the precise height).

    Most rowhouses in the District cannot meet the basement ceiling height requirement and thus it is necessary to dig out the basement, which is a huge job. If you don’t have two separate entrances to each basement unit, you’ll have to dig down and add stairs and a door, which could easily cost you several thousand bucks.

  • We were going to get the C of O for our basement, until we found out it would need a separate meter, which apparently would be very expensive electrical work.
    A very wise person told me this – the biggest risk you have renting out your apartment without a C of O is having a tenant that refuses to leave. In that situation, usually the only effective way to get them out is to pay them a month plus of rent (especially with pro-tenant laws in DC). This would still be considerably cheaper than doing all the work needed in most DC basements.

  • Wow; all this inaccurate information is funny & freightning at the same time.

    (I’m a legal landlord of a 2 unit property with all the required paperwork an units bein in compliance)

    OP: Unfortunately for you is tat you bought a house that was renovated without going through the proper process. Did you even bother to ask if the basement was legal?

    Also, if it is too much trouble or cost too much to do in your opinion just don’t rent it.

    Why regulations; that is a funny one. Why should we have any building codes or regulations.

    Plainly put if you want to be a landlord and you want to make that green stuff off of who you’d pawn off as a apartment under your house you better make sure it is up to code and in compliance with te regulations.

    Do A LOT of people do it illegally with none of the above. Yes, but they are only ONE incident away from a problem with a tenant, their insurance company and/or the city.

    It’s your choice if you decide to take he risk. Just be ready to accept the consequences.

  • why put yourself through the hassel find a rental who knows upfront what the deal is and keep it moving. city only does that to tack on more property taxes to you at the end of the day

  • Just to close out – this thread proves the underlying point of hmh question. Few understand the process, even those who are using it. DCRA, any hope of consolidating the dozens of steps and cost necessary?
    And yes, I spent considerable time investigating whether my basement was permitted and up to code before I purchased it. I knew it was not. I don’t have to rent it. But since I’d like to, and legally. What I did not anticipate was the significant cost and time sink to get basement nicer that 90 percent on the market cleared to rent – I knew the basic process and requirements, but find this excessive for someone who is trying to do the right thing. I am happy to get one inspection, or 2, not six. I am happy to get a few permits, not a dozen. It’s not like my situation is unique. The city has thousands of homeowners in my situation. They’d have a safer (and more economically beneficial) rental market if they’d streamline. Make it easier for them to tell me what needs fixing.

    • OP, I need housing in August, potentially. I don’t care if it’s got a CoO, stairs to the top unit, or anything else like that. That, and I am SO not litigious. I resent the tedious process as much as you do. Let’s grab coffee?

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