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D.C.'s small landlords are struggling under eviction moratoriums, survey finds

Signs hang from the windows of an apartment building in Northwest Washington in May. (Andrew Harnik/AP)

As many businesses remain shuttered and stimulus payments run out, the economic crisis created by the coronavirus pandemic continues to batter the District’s residential real estate market and small landlords in particular.

Since the early days of the crisis, Mayor Muriel E. Bowser (D) has maintained an eviction moratorium, keeping renters housed as the virus has spread. A national moratorium issued by the Centers for Disease Control and Prevention on certain evictions also remains in effect through the end of March.

But small landlords — property owners with fewer than 20 units — for months have said that the freeze has put them into an untenable position: Although a court decision has allowed some eviction cases to proceed, many remain on hold, and landlords say they can’t remove bad tenants who are crippling the livelihoods of landlords.

A trade group advocating for D.C. property owners, the Small Multifamily Owners Association, has released the results of a survey of local small landlords and property owners about the impact of the pandemic and eviction moratoriums.

“The kind of losses that small landlords are experiencing are not sustainable,” said Dean Hunter, the group’s president and chief executive. “Landlords are seeing a 40 percent decline in revenue but the mortgage, utilities and common-area bills are still 100 percent due.”

The group plans to hold a rally on Wednesday outside D.C. Superior Court at 11 a.m. to emphasize the need for local leaders to act.

“We do not want to see anyone evicted for nonpayment of rent,” Hunter said. “With $200 million in rental assistance that should not happen. But we need access to the courts.”

‘No safety net’ and little sympathy. Some small landlords struggle under eviction moratoriums.

According to a 2020 report by the D.C. Policy Center, 2,150 small landlords in D.C. manage more than 8,600 units total.

About 186 people filled out the Small Multifamily Owners Association survey. More than 70 percent of the respondents said they owned rental properties, while the majority of the rest identified as property managers. More than 80 percent of the landlords said they had fewer than 10 units in their portfolios.

More than 70 percent of the landlords and property managers surveyed reported that they have experienced “nonpayment of rent” involving their tenants. Thirty percent of the tenants leasing from the surveyed group were reported to be behind on the rent.

The group also averaged an estimated 14 percent vacancy in combined holdings this month, up from the reported 5 percent vacancy one year ago. In the survey’s comment section, respondents noted that the “area jobless rate,” “loss of demand” and a “drop in interest in one bedroom and studio listings” have all seemed to hurt them.

“I had to lower the rent 25 percent to accommodate the fact that my tenants lost their jobs/had reduced hours due to Covid,” one respondent wrote. “Their rent payments only cover my mortgage and I’m losing money by renting my property once I account for utilities and repairs.”

Many landlords also noted that the increase in costs related to managing property during the pandemic, coupled with the District’s laws that limit how rents can be raised, also strain their ability to stay afloat.

“For those of us who have seen our expenses increase but are not able to ask our tenants to share in the increased costs with higher rent, it would be helpful to allow modest rent increases,” another respondent noted.

The city has taken steps toward rental relief programs for tenants struggling to pay. But more than 50 percent of the survey respondents said they have received no government help during the pandemic. Forty-five percent said tenants were unwilling to communicate about relief programs, creating an obstacle to obtaining government aid.

Hunter and his group are pushing for more direct access to that relief on behalf of owners. “Landlords need immediate and direct access to rental assistance,” he said.

With the eviction moratorium set to be in effect as long as Bowser keeps the city in a state of emergency, some survey respondents expressed a grim view of the months ahead.

Thirty percent of them reported that they were planning to sell their properties in the next 12 to 24 months, which could radically change the marketplace because small landlords are integral to affordable housing, Hunter said.