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In D.C., low-cost apartments disappearing at rapid rate

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For a year, Julio Benitez, 61, has complained to his landlord about the unpatched walls, leaky bathtub and broken electrical outlets in his apartment. Down the hall, where Paul Fisette, 28, moved in a month ago, everything is new, from the paint to the appliances. When the garbage disposal broke recently, the landlord replaced it by 11 a.m. the next day.

Welcome to the New Hampshire, where the underprivileged and upscale exist under the same roof, part of a shift in the District’s housing stock that experts say is likely to change the face of the city for decades to come. Fueled by a strong job market for young professionals and a credit crunch that has made condominium conversion difficult, low-income apartment buildings are undergoing rapid makeovers to meet the demand for upscale housing.

As a result, low-cost rental housing is now disappearing at a faster rate than it was during the height of the housing boom, according to a new analysis of census data by the D.C. Fiscal Policy Institute. Median rents soared by as much as 50 percent between 2000 and 2010, with much of that increase taking place during the downturn, the analysis found.

The residents of the New Hampshire, a 1920s vintage building by the Georgia Avenue-
Petworth Metro station, are intimately familiar with the forces reshaping the city. Their building and the adjacent Quincy were purchased in 2010 by Urban Investment Partners, which launched extensive renovations under an agreement worked out with the tenants.

To comply with the District’s housing laws, UIP promised to bring the buildings up to code and even upgrade them and let the residents who chose to stay keep their apartments rent controlled. Those who wished to leave could walk away with a buyout of $10,000. In exchange, the owner would be allowed to charge new tenants market-rate rents.

Such voluntary agreements are increasingly common, housing advocates say, because they allow building owners to raise rents without a prolonged fight while giving tenants a way to get their buildings fixed up, or, if they prefer, money to move out. Over the past several years, UIP has pioneered the use of voluntary agreements and is now one of the city’s most prolific users of them. The alternatives, such as petitioning the residents to raise the rent, very often trigger court battles, which cost money and goodwill.

“Talk about making a group of people hate you,” said UIP co-founder and principal Steve Schwat. “I don’t like to be hated.”

Many of the residents at the New Hampshire and the Quincy chose to take the $10,000 buyout and clear out. When the renovation work began last May, about 30 of the 99 units were occupied. New roofs were installed, along with new windows and a new electrical system, and the lobbies got boutique hotel makeovers with bold wallpaper and new lighting.

Schwat said that he warned the remaining residents that the renovations would be messy and unpleasant for them but that they didn’t fully appreciate what it would be like. The longtime tenants say UIP’s contractors treated the buildings as if they were vacant, making living conditions there far worse.

“They don’t care who is in the way,” said Earleen Hughes, a 32-year resident of the Quincy and the vice president of the tenants association. They’re “just running all over you.”

Hughes is a retired federal government worker who raised seven children and several grandchildren in her two-bedroom basement apartment, which costs her just $600 a month.

UIP officials suggested that she move to another apartment during the renovation, but she feared if she left she would never get back in. Inside, there are unplugged holes, peeling paint and a heavily water-damaged wall in the bedroom where her grandchildren normally stay.

UIP contractors have been doing work on the rest of the basement, and she is no longer allowed to use the easiest route from her apartment to the laundry room. Instead, Hughes has to drag her laundry up a set of stairs. (There are 34 steps in all. She counted.) At one point, management had one of her neighbors arrested for unlawful entry for ignoring the new restrictions. The charges were later thrown out.

Hughes’s neighbor in the basement, Cheryl Scott, temporarily moved to another unit on the first floor after her apartment was flooded. Mold and mildew developed in her bedroom, she said, forcing her to sleep on her living room couch for three months. The unit where she is now is not renovated, either. Scott came home one day a few months ago to find construction debris coming from a hole in her ceiling, covering her bed. Earlier this year, she was putting groceries away in her kitchen when the cabinets came off the wall.

By contrast, the renovated units sport granite countertops, restored wood floors and stainless steel appliances. They come with upscale price tags, too. A 400-square-foot studio can cost as much as $1,400 a month. One-bedrooms go for more than $1,800. Most of the holdovers pay closer to $900 for a one-bedroom.

For the location and the space, it is a rate that would be hard to match. The D.C. Fiscal Policy Institute found that between 2000 and 2010, the city lost 50 percent of its low-cost rental housing. The rate of loss has accelerated since 2008, when the credit crunch began to slow condo conversions.

Marian Siegel, executive director of Housing Counseling Services, which helps low-income District residents find housing, said they try to encourage low-income residents not to accept buyouts because the money isn’t likely to go as far as they might expect. Many don’t realize how hard it has become to find low-cost housing.

The old residents of New Hampshire and Quincy are determined to stay. They have been vocal with their complaints about the renovation work, calling in city inspectors and elected officials.

In August, the Department of the Environment shut down construction for four weeks at the Quincy for lead abatement problems. After UIP tested all of the units, Schwat said, and did not find dangerous levels of lead, city inspectors allowed the renovations to go forward. The two buildings do not have any outstanding building code violations, according to District records.

But residents tell a different story. In January, longtime tenants — working with a lawyer from the Washington Legal Clinic for the Homeless — sent Schwat a 14-page letter detailing the conditions that the tenants wanted fixed, such as exposed wires, roaches and mice, mold and falling construction debris.

Schwat said that now that UIP is done with all the major system upgrades, it will tackle more problems in the unrenovated apartments. But those units won’t get the gourmet kitchens or refinished floors that the newcomers are getting.

Despite the anger directed at him from the longtime tenants, Schwat remains an advocate of voluntary agreements between tenants and landlords. Do they speed up the loss of affordable housing? Possibly, he acknowledged. But that may be unavoidable.

“Affordable housing in that neighborhood and in other desirable neighborhoods will erode anyway,” he said. “I’ve been here since 1980, when the city was losing population. This is every city’s dream. The city is more diverse. It’s safer. There are now multiple neighborhoods people want to live in. So you have to come up with ways of preserving affordable housing. You can’t put that all on the landlord.”

Housing advocates say tenants could benefit from more money in the city’s housing production trust fund, which tenant associations and affordable-housing developers tap into to buy buildings and keep them affordable. The fund depends on a portion of the transfer taxes collected when people buy property, and the real estate slump has left it depleted. Mayor Vincent C. Gray (D) is proposing to divert $20 million from the fund for other housing programs. The D.C. Council is slated to vote on the budget proposal May 15.

At the New Hampshire, Benitez said he isn’t sure how much more he can take. Last year, the retired building manager, who is disabled and awaiting a liver transplant, endured construction dust and unpatched holes for weeks while the workers installed new fuse boxes and rewired the building. But many of the outlets in his apartment remain exposed and don’t work, he said. The floor in the kitchen and the living room is a tangle of extension cords — a hazard for his 1-year-old grandson, who lives there with Benitez’s daughter. Most of the doors have no knobs, only gaping jagged holes. His bathtub leaks, and recently, bed bugs have appeared. They were first spotted in another apartment upstairs, where a baby was bitten all over. Another neighbor found enough of the critters to fill a coffee cup. Benitez insisted the neighbor take the cup to the property manager.

When his daughter found a bed bug in the room she shares with her son, she demanded Benitez throw out the bed. He told her he couldn’t afford to replace it. An exterminator paid at least two visits to the apartment, but Benitez is not confident the problem is solved.

Benitez has nothing against the handful of new tenants who have moved into the renovated units, and neither do the other longtime residents. He directs his frustration at the situation.

“It’s like you wash your face,” he said. “On the front, you’re looking all clean and nice, but the backside is dirty.”

Fisette, a contract lawyer from Boston, said he chose the New Hampshire after seeing smaller two-bedrooms in other parts of town costing upwards of $2,500 a month — too pricey for Fisette, who shares the apartment with a roommate.

He’s aware some of his neighbors aren’t happy with their apartments. He attended a recent tenants association meeting with two other new tenants.

“I didn’t have much to say,” he said. “I really have no complaints.”

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