What does the author mean by “the house failed the tenants, and the tenants failed the house”?

The Hinkstons expect Sherrena to carry out repairs in their apartment when things get broken. After all, she's the landlord, and that's what landlords are supposed to do. But she doesn't, recognizing as she does that evicting tenants is actually cheaper than carrying out repairs. This is yet another grim feature of a broken housing market. Sherrena's dereliction of duty is what Desmond means by "the house failed the tenants."
Sherrena's refusal to maintain the property in a habitable state has a knock-on effect on her tenants. If she's not going to fix things when they get broken, then neither will the tenants. That's not their responsibility. They pay over the odds to have a decent, functional home, so why should they be expected to repair the property? This is what Desmond means when he says that "the tenants failed the house."