“You want to help but it’s also a business,” Djabatey said once his own door was closed, the noise from the neighbor still pushing through the wall. “That’s the way it is.”
Djabatey was not a typical resident in this small four-unit building in Northeast Washington’s Deanwood neighborhood. He was also the owner. With a mix of optimism and an eye for how gentrification was changing the District, he had hoped this property would prove to be the “start of my legacy for my future kids.”
But Djabatey’s aspirations of riding the District’s real estate market to a measure of financial security he didn’t know growing up in Southeast Washington are now complicated. The long-term cause is the economic fallout of the coronavirus pandemic. The short-term problem, however, was across the hallway.
In February, Djabatey won an eviction case against a tenant for failure to pay rent, the end of a saga that included claims of drug use, strangers allegedly spinning through the tenant’s apartment at all hours and complaints from his other residents.
But then the pandemic interrupted the legal process, and nine months later the tenant was still there rent-free, leaving Djabatey, a government contractor with the Federal Protective Service, without the monthly $1,002 rent to cover his own mortgage payments. “It’s coming out of my pocket,” he said. “I’m in a very tight situation.”
For the last 10 months, the pandemic has sent a series of jolts through the national economy’s central nervous system. An estimated 10.7 million are out of work. More than 50 million are expected to struggle to put food on the table this year. And an estimated 40 million Americans could face eviction by 2020′s close.
That possible displacement — exposing millions to the fast-spreading virus — triggered both local and federal policies geared at keeping tenants in their homes, from rental relief to eviction moratoriums. The District has been among the most aggressive municipalities, halting all evictions citywide until 60 days after D.C. Mayor Muriel E. Bowser (D) lifts the city’s state of emergency.
With coronavirus cases now rising, the moratorium is likely to stay in place well into 2021, leaving more and more small landlords in a difficult spot. Typically defined as owners with less than 20 units, small landlords are an important source of affordable housing in the city, but typically don’t have the political clout of large developers nor the public sympathy of struggling tenants.
“There’s been no safety net for them,” said Pegah Afshar, a D.C. real estate attorney whose family also owns a small residential building. According to the Small Multifamily Owners Association, an advocacy group for small landlords in D.C., one-third of the District’s rental units belong to small owners.
“The rental housing providers in the District of Columbia are regulated like they are all multinational corporations,” said Dean Hunter, the group’s president and chief executive. “They’re really small business owners that aren’t politicians or lobbyists or used to engaging in the process.”
A new proposal before the D.C. Council aims to offer some relief for small landlords, but many like Djabatey say they still have been left behind by the federal and local responses to the pandemic, pinned between following the policies and losing their own financial footing.
“It’s in my face every day,” Djabatey said, listening now again to the white noise of the television reaching his living room. “What can I do? I did my part, I went to landlord-tenant court.”
The Aspen Institute Financial Security Program and the COVID-19 Eviction Defense Project earlier this year projected up to 131,000 renters in the District were at risk of losing their homes in 2020. More recent data suggests that those worst-case predictions are on track.
Congress has so far failed to pass another financial aid package, meaning 12 million Americans may lose their benefits at the end of the month; the Centers for Disease Control and Prevention’s eviction moratorium is set to expire on Jan. 1. Moody’s Analytics recently said nearly 12 million renters will owe an average of $5,850 in back rent and utilities by 2021′s start. Data collected by LeaseLock showed only 13 percent of landlords nationwide reported receiving rent payments from tenants on Nov. 1, a nine-point drop from October.
The District is better shielded than most places against a mass wave of evictions. The current protections extend beyond the CDC moratorium, which is limited to only failure-to-pay cases — a loophole that has allowed thousands of evictions to continue cycling through the courts.
But small landlords feel the District’s moratorium and a companion ban on rent increases during the pandemic have put them in a no-win position as their own financial demands press in.
“It’s extremely inequable to treat all landlords as the same,” said Richard Bianco, a District real estate attorney who represents small landlords. “Small landlords don’t have the cash and credit to carry a loss in income. For many it’s not a full-time job, they just have one or two rental properties that might serve them in their retirement. And these things are threatened when the rent isn’t coming in over the course of a year. Their margins are small already, it’s not like they are stuffing money in their pockets.”
Small landlords, however, have been quiet about voicing their concerns because of public perception, according to attorney Afshar.
“Landlords get pegged as slumlords, often when they are not,” she said. “People assume they are in much more advantageous positions than they are, that they don’t have their own bills to pay.”
Last week, Bowser announced a new program offering $10 million in funding for landlords. Providers can apply directly for the money on behalf of tenants who owe back rent. The city will pay 80 percent of the rent, up to $2,000, and landlords are required to forgive the remaining 20 percent. Landlord advocates like Hunter say the program is a welcome step forward but may have come too late.
The fear is that the financial pressures on landlords like Djabatey will drive them to sell their properties to large corporate landlords who are better able to weather a prolonged downturn.
Ultimately, District residents may end up paying the price. According to a May 2020 analysis by the Joint Center for Housing Studies at Harvard University, the exit of small landlords can negatively affect the availability of affordable housing.
Small landlords have the flexibility — and empathy — to directly work with the needs of tenants, Hunter argued. They can respond to renter’s financial struggles or situations in a way that corporate landlords, locked into companywide policies, cannot.
“I know numerous small landlords who will tell you they keep their rents low because they know the tenants and want to keep them,” he explained. “The fact is, small housing providers are the most critical element in affordable housing in the District.”
When Djabatey first saw the two-story building of white brick on the corner of a residential street a few blocks west of the Kenilworth Avenue Freeway, he didn’t look at what it was — an abandoned crash pad for squatters and drug users.
He saw what it could be. Big rooms, high ceilings, original wooden floors, easy access to the highway, a short drive to the developments then growing up around H Street NE.
It was 2017 and Djabatey had already bought and renovated one building in Southeast Washington. The plan was to keep buying and restoring small buildings across the city, a modest empire he could one day pass on.
With an FHA Limited 203(k) loan, he purchased the building for around $300,000, then spent around $70,000 on renovations. When the building was ready, he took one of the top floor units for himself, and began looking for tenants.
He did not hesitate to accept a tenant whose rent would be subsidized through the D.C. Housing Authority’s Housing Choice Voucher Program.
“You talk to a lot of people who say they would never rent to Section 8,” he said. “My theory is a market tenant can tear up your place like a Section 8 tenant. You just have to make sure you do the right due diligence.”
It was also personal: When Djabatey was growing up in Southeast D.C., he and his mother had been on Section 8. He had been happy with the Section 8 tenants he had living in his first building.
The tenant across the hall (who did not respond to messages seeking comment) moved in through the program in 2017.
In later court filings, Djabatey would allege that his tenant began “maintaining a drug haven” in the unit. He also accused the tenant of having “disturbed the peaceful enjoyment of the other tenants” and of having an “unauthorized guest living on the premise.”
The tenant denied the allegations in a separate court filing and claimed that he was being evicted because “I complained about problems in my residence” and because Djabatey “does not like the people I associate with.”
In October 2019, DCHA alerted Djabatey that his tenant was being cut off from the voucher program due to “violation(s)” of the program’s “rules and regulations.” With no rent money coming in and the disturbances across the hallway continuing, Djabatey was granted a court date for an eviction trial in February 2020.
“We went, the judge sided with me, she banged the gavel, I filed a writ and the eviction was scheduled for the end of March,” he said. “On the eviction date, the marshal didn’t show up.”
When he called, he learned all evictions had been put on hold. His tenant stayed, and Djabatey continues to eat the cost while listening.
Djabatey acknowledges that his own situation is far better than others, both among tenants cut off from their income by the pandemic and housing providers struggling to maintain their business and meet their bills without their usual income. Djabatey is not sure whether he will apply for the city’s new assistance program. But he has no plans to give up on his legacy.
“It definitely hurts me financially,” he said. “It definitely is a struggle.”