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

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.