In every income level there are rational, dependable tenants.  

I'd come with photos of how the place couldn't be accessed without a ladder and show the damage to the washer and dryer and let a rational judge determine if someone would get a ladder, break a glass door to come in and vandalize a washer and dryer.  

I don't think there's any rational basis to the idea small dogs piddle more than large dogs, anyway.  

When you start trying to justify or explain or rationalize what they might really mean - when on the face of it, it doesn't make rational sense - deny!

I've had tenants in the past that ran into financial issues, however, they were rational human beings.

I do not mean to insult but I do not understand your rational when there are plenty of places to rent that allow dogs.

Those eager beavers out there, who may not be acting entirely rational in many cases, could work in your favor as a seller.

Sorry, To me, there is not rationalization that would make me want to keep a house that has negative cash flow.  

Use that as a rational.

Another option could be to make a few small upgrades to their units and/or the building and use that as additional rational for the increases.