Landlords gird for a heating season perhaps like none other. The squeeze could push apartment owners out of business, reduce available units and wring out municipal services. It’s already raised rents.

LEWISTON – Stan Pelletier remembers locking in oil at 89.9 cents a gallon five years ago before prices shot up another 50 cents that winter.

“Those days are gone,” said the landlord who oversees 21 apartments in Lewiston and Auburn.

On Wednesday, oil prices were $4.71 per gallon. And for the first time in Pelletier’s memory, local landlords couldn’t lock into a discounted rate from oil dealers. Last winter he used more than 10,000 gallons of fuel to keep his buildings and tenants warm. This year, he’s not certain what he’ll do.

“I know this, though: If I didn’t own our buildings outright, I would serve eviction notices and close them down for the winter. That’s how tight it is,” he said.

Across the state, landlords expect skyrocketing fuel prices to eat up the margins they need to stay in business. Over the last few years they’ve absorbed increased costs for insurance, property taxes and new fees like Lewiston’s storm-water tax and trash collection. The latest squeeze could push landlords out the door, shrink available housing and slam municipal services. It’s already led to higher rents.

“Most landlords are already doing it,” said Don Poisson, president of the Lewiston/Auburn Landlords Association. “Most are going up at least $50 a month.”

Not that it offers much of a hedge. Carleton Winslow, vice president of the 3,000-member Maine Apartment Owners and Managers Association, said a $50-a-month increase in his eight-unit apartment building in Portland won’t even recoup a quarter of his expected increase in fuel costs.

Last year he spent $4,000 to heat it; this year he expects it will be closer to $18,000.

“And I consider $50 a month a hefty increase,” he said. “But I don’t have much of an alternative. I could shut the building down. … I’m not sure that won’t happen a lot this winter.”

Poisson said he knows of one Lewiston landlord who will likely file for bankruptcy as soon as the heating season gets under way.

“If you have lots of properties and high mortgages, there’s no way you can make the numbers work,” he said.

For some landlords, the heating costs will be the final financial straw.

“They’ll walk away … I know it will happen,” said Pelletier.

So do others. Public safety officials have been meeting this summer to devise a plan to address the expected increase in no-heat complaints from tenants whose landlords have gone AWOL. Mike Minkowski, deputy fire chief in Auburn, estimates there were more than 100 no-heat complaints from tenants last year.

“And that’s when oil was $3 a gallon,” said Minkowski, who initiated the public safety meetings in May. He said there were just a handful of similar no-heat calls the year before.

The meetings bring together public safety personnel, emergency management people, electrical inspectors, housing officials, municipal staff and local landlords to set up a protocol for handling no-heat situations. They’re in the midst of pulling together a manual outlining procedures that incorporate available public and private resources.

“If we field a (no-heat) call this winter, we want to be in a position to send them in the right direction,” said Minkowski, noting that sometimes that might mean the tenant moving in with relatives or sharing a home. “We know there will be a problem this winter. It’s better to act now.”

His fear is that people will resort to faulty space heaters or poorly installed wood stoves to stay warm and in the process, increase the danger of fire. Pelletier said he heard of one woman last year who was on oxygen and using a kerosene space heater and two dogs to stay warm.

“The issue I see is that people fall through the cracks and that crack now is a lot bigger,” said Minkowski.

Next week Maine Attorney General Steve Rowe is expected to attend the meeting.

Poisson said that will be a great opportunity to gauge the AG’s interest in a bill that the local landlords’ association hopes to introduce in the next session. Maine law requires landlords to keep the heat at a minimum of 68 degrees in rental units. Poisson said he’d like to see the law changed to allow heat to be lowered to 64 degrees between 10 p.m. and 5 a.m.

“It may save enough heating oil to make a difference to some … it can help those who are just barely hanging on,” he said.

The local landlords’ association has about 500 members, many of whom are spending the summer figuring out ways to reduce their oil costs.

Poisson said he’s considering offering his tenants a $100 annual bonus if they partner with him in lowering energy costs. Other landlords are exploring alternative heating sources, although the pay-back time on most systems is discouraging, he said. Some are putting in separate furnaces so renters can be responsible for setting and paying for their own heat.

Others are doing what homeowners everywhere are doing: adding insulation, sealing cracks, replacing windows.

“We’re having all our furnaces serviced and buttoning up the houses,” said Poisson, who oversees 11 units where he provides heat.

Still, he expects his heating bill will go from $22,000 last season to more than $50,000 this year.

“There’s no way you can make that up by increasing rents,” he said, noting tenants can only pay so much. Lewiston-Auburn already has the lowest rents of any metropolitan area in Maine, according to the Maine State Housing Authority.

Winslow warned that as the heating costs rise and the profit on rentals shrinks, municipal officials will be inundated with demands to lower the assessments on those rental properties. That, in turn, will erode the tax base.

In his example – the more than fourfold increase in heating costs for his Portland building – Winslow expects to see a change in that building’s valuation come April 1.

“It decimates my operating (budget) and significantly reduces the value of the building,” he said. “The numbers aren’t there anymore. If the assessors don’t budge, we may have to go to court.”

Minkowski said he’s sympathetic to the situation many landlords are in. Tenants who grapple with stagnant wages and higher gas and food costs may choose not to pay their rent. That only compounds the problem.

“I think most landlords make a good-faith attempt to remedy problems,” he said. “There’s not a large margin of profit here.”

Winslow said some of his members were literally in tears trying to deal with the heating situation. It’s the most severe problem he’s seen at MAOMA in years.

“At these prices, people will go under,” he predicted.

Pelletier concurred.

“Right now, you’re hanging on to what you’ve got and hoping to make it through the winter.”

Go and do

The Maine Apartment Owners and Managers Association is sponsoring an educational seminar on reducing energy costs Saturday, Oct. 18 at Lewiston High School’s Green Ladle. For more information, visit www.maoma.org