Real estate boom threatens rooming houses at bottom of the housing market

Jean-Paul Doh (L) and Tunde Kunnu (R) stand outside their rooming house on Humphreys Place in Dorchester. Photo: Meredith Nierman/WGBH News

A hot real estate market in Boston and surrounding cities is fueling rent hikes and evictions in what has long been one of the cheapest housing options in poor neighborhoods — rooming houses.

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Housing advocates say rooming houses — also known as SROs, meaning ‘single room occupancy’ — are a vital source of affordable shelter for minimum-wage workers, the elderly and people with disabilities or mental illness. But as urban real estate values surge, some investors and property owners are raising rents, evicting tenants and trying to shift away from low-income residents.

“People are being thrown out, and that’s happening across the city, because these properties are now so valued,” said Eloise Lawrence, an attorney at Harvard Law School’s Legal Aid Bureau who has defended tenants. “What was once considered housing at the last resort is now seen as desired and profitable.”

It’s not clear whether the number of rooming houses in the Boston area has declined over time, because city agencies don’t keep accurate historical records of such properties, but the New England Center for Investigative Reporting found many cases of rooming houses being sold and tenants displaced or under threat of eviction.

In Boston’s Roxbury neighborhood last year, tenants in a 20-unit rooming house got eviction notices after the building sold to an investor for $850,000.

Tunde Kunnu, 72, and other tenants formed an association and sought help from local activists and legal aid to fight the evictions. But still, the building is neglected with broken windows and trash strewn across the front and back yards.

“Everybody deserves a good place to live. They just don’t care,” said Kunnu.

In Lawrence, where a 72-unit rooming house sold last August for $2.2 million to Manik Zaman, 13 tenants have received eviction notices, according to records in the local housing court. In April, Zaman alerted tenants of rent increases.

David — a 62-year-old tenant in the building — says he is worried because his rent is going up from $550 to $700 a month. NECIR is not using his real name, because he is fearful of reprisals from his landlord for talking to the media. He has lived in this rooming house for three years.

“If I have to move out, who’s going to take care of her?” he said, pointing to his cat, Mia. “Her prior owner was a heroin addict who had OD’d.”

David’s hands trembled as he tried to operate his ceiling fan that dangled from thin wires.

“Watch your head. I think you should step back because this is dangerous,” he said, as the fan blades clattered. “It will come down on your head.”

David survives on a $700 a month disability check, living in this tiny room whose most striking feature is that it has no windows. Inside these walls, painted pale pink, there’s a single brown wooden bed, and lots of books and artifacts from his time spent teaching English in Asia.

At least three other tenants share a small bathroom with cracked floor tiles and decayed caulking around the tub.

Despite the downsides, David wants to stay put.

“One of the big problems for most people in the building is, where are we going to go? We can’t afford the rent anymore. And you’re talking about elderly disabled people,” he said.

Zaman declined to speak with NECIR. His attorney, Wendy Estrella, wrote in an email that the rent hikes aren’t about boosting profit, but are intended to cover the cost of improving the building.

A study this year by sociologists at MIT and Princeton University casts some doubt on that claim. Based on their research, landlords are making much higher profits by renting to poor tenants than they would renting to middle class or affluent renters.

“The median housing unit in a poor neighborhood was actually more profitable than a non-poor neighborhood by something like $50 or $100 per month,” said MIT sociologist Nathan Wilmers. “The gap mostly comes from the fact that properties in poor neighborhoods have lower building values. And so that trickles through to property taxes being lower and also mortgage payments.”

The study also showed that rents for poor tenants are inflated, in part because of the perceived risk of renting to an often-transient clientele that may not reliably pay their rent or stay for long periods.

Housing counselor Luz De La Cruz at Greater Lawrence Community Action Council said rooming houses are often the first step to lifting someone out of homelessness.

“I work with a gentleman who has been homeless for quite a while, and he’s a hard-working man,” said De La Cruz. “He was able to move into one those places, and he was in tears. That’s the only thing that he was able to get. He has a place to call home. He doesn’t have to stay in his car.”

De La Cruz is always scouting for available rooms. But there’s often a wait list.

One of the gatekeepers is Melanie Forzese, the manager of a 34-unit rooming house in South Lawrence.

She screens would-be tenants for serious criminal records and for income.

“I do a thorough background check. I need to see your last two pay stubs if you work; if you don’t, I need to see the benefit letter of social security, just to make sure that you have absolutely no problem paying rent,” she said.

A room here costs $650 per month and comes with a bed, dresser and refrigerator. For someone working a full-time, minimum wage job, that’s about a third of their gross monthly income. There’s no requirement to pay a security deposit or last month’s rent.

For Forzese, the job is about filling up rooms. Tenants who miss more than one rent payment in her rooming house get an eviction notice, meaning Forzese is in housing court most Thursdays trying to get delinquent tenants to pay up — or move out.

“I really don’t want to see people homeless,” she said. As tough as she is on delinquent tenants, Forzese actually knows what it’s like to be evicted and homeless. She knows eviction quickly becomes a stain on a person’s record, making it very hard to get a new place.

Four years ago, she was evicted — unable to work after stepping on a nail. After three months in a homeless shelter, she landed in a rooming house, and eventually she got a job managing it.

She says there’s a community among the people who rent rooms in this brick building, above a glass and mirror shop.

“On Easter I made spaghetti and meatballs, and I think I fed like 12 people,” she said. “I like the fact that a lot of people here are friends.”

Real estate developers say running rooming houses is hard. And when the economy is booming like it is now, there may be easier options — like turning the place into condos. Alan Hope ran two rooming houses in Lawrence after being appointed as a receiver for the derelict properties.

“It’s very difficult, I think, if you’re not a professional in maintaining a rooming house to the standard that’s required,” said Hope. “Real estate in general is becoming more higher-priced and valuable, so investors are trying to get the most they can out of it — maybe having more stable tenants that are probably earning a living and not dependent on subsidies.”

Nonprofits in and around Boston such as Caritas Communities and the Pine Street Inn still see a critical role for rooming houses. With some help from state subsidies, they are trying to buy up and expand the number of rooming houses to make sure low-income single people aren’t totally squeezed out.

Housing advocates point out that tenants who are paying less than $700 a month in rent often don’t qualify for any subsidies and are hard-pressed to find any other place to live if they lose their spot in a rooming house.

“Rooming houses that are occupied by working class folks are a vital part of the mix of affordable housing, and they’re being lost in the same way that all housing that used to be affordable is being lost,” said Steve Meacham, an organizer at City Life Vida Urbana in Jamaica Plain. “It’s a lousy way to run a housing system to have people pushed back and forth out of their home, because the conditions of the market have changed.”