It’s easy to stereotype landlords of small, low- and moderate-income multifamily housing as slumlords, but here’s the thing; a lot of them are honestly just trying to bring in extra income and do right by their tenants.

That’s the contention of Joe Flatley, president of the Massachusetts Housing Investment Corp. What’s more, he said, is that their challenges are steep. They often don’t make much of a profit, and they’re well aware that if they have a problem tenant to evict, the law won’t make it easy on them.

With a few exceptions, Flatley found a lot to agree with in the Federal Reserve Bank of Boston’s latest report on the subject, “Challenges of the Small Rental Property Sector,” which echoed his assertion that private landlords are an overlooked part of the housing industry.

In these times of distressed homeownership, plenty of former homeowners are going back to renting. What’s more, it’s an enticing time to buy the reams of foreclosed multifamily properties on the market right now, and the report notes many speculators are currently snatching up such properties for short-term gains.

A Bitter Taste

This makes it an important time to improve longstanding problems with the way the system treats landlords – including their relationships with government, community groups and lenders, said Prabal Chakrabarti, director of community affairs with the FRBB.

Right now, landlords’ interactions with government often are through inflexible code enforcers or uninterested city bureaucrats. It leaves a bitter taste in everyone’s mouth, according to the FRBB report, which was authored by Alan Mallach of the Brookings Institution.

Other than that, privately owned small rental properties largely “fall between the housing policy cracks.” Federal housing programs focus on homeownership or tax credits that help sophisticated developers or nonprofits develop large-scale rental properties.

But small multifamilies – usually between two and four units – make up an enormous part of the renting population, according to the report: two out of every three renter households are in such buildings. Also, more than 70 percent of low- and moderate-income households live in such properties.

And when that property deteriorates because of poor maintenance or low cash flow, the whole neighborhood suffers.

Getting cash flow is a difficult thing: Chakrabarti and Flatley both said landlords could get help from private lending institutions seeking to fulfill their Community Reinvestment Act requirements, but Flately noted that CRA is so intensely focused on mortgage lending and homeownership that it doesn’t encourage lending to owners of rental property. Banks, therefore, have much less incentive to make those loans.

The report encourages programs that give good landlords preferential treatment or monetary incentives – if they first complete a training course or sign agreements to carefully screen renters or follow certain standards. Chakrabarti said MassHousing, an affordable housing bank, had helped landlords by offering funding programs in cooperation with MHIC.

More controversially, however, the report advocates for a looser housing code in some cases, particularly for landlords with narrow profit margins in low-income areas. It acknowledges, however, such a suggestion might not go over well both practically and politically.

Chakrabarti tempered the suggestion by saying it wasn’t about having a different set of codes for certain landlords, but rather that the code enforcers needed to be more flexible in terms of important code violations versus less-essential ones that, if fined, would cripple the landlord.

MHIC’s Flatley thinks that idea is untenable: “Code enforcement is a serious issue and you can’t really relax it. To me, it’s more a matter of providing loans and resources to deal with the needs of their properties.”

The report failed to note that private landlords do benefit from some government programs, such as rental assistance for low-income tenants, Flatley said. Still, it’s true that in many cases the challenges seem pretty steep for small landlords.

If a small multifamily owner has a bad tenant, she or he could very easily lose out on many months’ rent and not see a dime of that money, he said. That’s enough to put lots of small owners in the red, and the law does little to help them or make it easy for them to keep their heads above water.

“A lot of them are unsophisticated owners, and a lot of them, too, view government as the enemy,” he said.