Denton’s Providence Village Landlords Association made national headlines when it tried to evict tenants who used housing choice vouchers, also known as Section 8, in June. But the problem is more widespread and often lacks such a clear villain: Because state law prohibits cities and counties from requiring homeowners to accept vouchers, the vast majority don’t. A new report reveals how difficult it is for low-income renters to find a rental home even after the government agrees to pay most of it.
A new report from Child Poverty Action Lab, a Dallas-based nonprofit, and IDEO.org examines the difficulties voucher holders face finding housing in North Texas, where only 7% of apartments surveyed in four counties (Denton, Dallas, Tarrant and Collin) — reported taking vouchers. (The survey included “1,413 reasonably priced private market apartment complexes.”) Market rent rose 12% year over year in Dallas County, but household income n rose only 4.4%.
Voucher holders in Texas can sit on a waiting list for nearly two years before entering the program. The Dallas County list, for example, is currently closed. (That’s different from the Dallas Housing Authority, for the record.) But even after getting a voucher to help pay for housing, renters need to find a landlord who will actually take it.
Vouchers are often the only way for very low-income Dallas residents to rent apartments at market prices, which make up most of the available housing stock in the city. Twenty states prevent homeowners from refusing Section 8 bonds, but Texas is not one of them — in fact, state law only provides an exception for veterans who have obtained bonds.
The premise of the CPAL report is: How can the experience of renting to someone with a voucher be the same or better than renting to someone without? This question may seem simple, but the report finds that the problem requires overcoming neighborhood opposition, misconceptions about who participates in the program, and potential homeowners’ reluctance to accept federal housing funds.
If someone is approved for a voucher and finds a flat or house that accepts it, the local housing authority pays the landlord directly. These payments can cover part or all of the rent, depending on household income. On average, nationally, the split is about 60-70% paid by vouchers and the remainder paid by the tenant.
Voucher amounts are based on the fair market value of each zip code, which the US Department of Housing and Urban Development determines once a year. In a market like Dallas, where rents have skyrocketed and are often adjusted frequently by landlords, federally set fair market values are often lower than current values. This means owners might be reluctant to risk losing money.
The rules for the program were established in the 1970s, when most rental properties were privately owned. Today, institutional buyers and investors hold a much larger share of rental properties.
CPAL finds that working with the housing authority means getting approval from everyone with a stake in the property.
Rental period requirements may differ from systems the owner already has in place. Other barriers to using vouchers include finding insurance underwriters who don’t see it as a risk; navigating banks and lenders that won’t fund loans for properties that have more than 10% of its residents as bondholders; and the landlord must keep detailed records to provide to the housing authority.
CPAL interviewed voucher holders, landlords and employees of the Public Housing Office. He identified that the greatest barriers to entry may in fact be in the perception of both the voucher program and those using vouchers.
Voucher holders interviewed said they felt landlords and anti-voucher neighborhoods saw them as lazy and not self-sufficient. The National Low Income Housing Coalition found that in Texas, 45% of low-income renters are in the labor force. To afford a two-bedroom home at a fair rent in Texas, a household would need to earn nearly $47,000 a year. A very low-income household earns an average of $26,200 per year.
Owners interviewed acknowledged that this could be a challenge, but ultimately felt that Section 8 “got bad press”. (But the vast majority still don’t accept them.) Often, investigators found that those involved in the coupon system felt that people were keeping old information and were unaware of improvements to the system that allowed owners to rent more easily. to this population.
In Dallas, nonprofits often provide blanket support to voucher holders, believing they will eventually use housing stability to find reliable employment that pays a living wage. Nationally, voucher holders spend about three years on the program, according to a HUD report. The same report indicated that recipients of housing assistance, which would include multiple programs, tended to stay in the program for about six years if they were elderly or disabled, but about 2.2 years if they were part of ‘a household with children but were not elderly or disabled.
But back to the question: what needs to happen for renting to a voucher holder to be the same as renting to anyone else? For CPAL, the answer is not to dismantle the system in place, but rather to focus more on the relationship between voucher holders, landlords, HLM authorities and associations that provide services.
Finding opportunities to tell new and more accurate stories about voucher holders will help, the report says, as will explaining why a voucher is a financial tool to reduce housing costs – just like, for example, the exemption ownership on your property taxes reduces the cost of owning a home.
There is also a need to improve lender participation, especially when it comes to producing more affordable housing. The Federal Housing Finance Agency recently proposed a rule change for Freddie Mac and Fannie Mae that would require at least 61% of the multifamily loans they take on to be in the form of affordable housing.
Demonstrating that vouchers are a reliable form of income for landlords would be another, as would pursuing more unique opportunities like low-income investment funds and intergenerational home-sharing models that would allow younger tenants and older to live together at an affordable price. Making it easier for family owners to participate in the program would also be a benefit, according to CPAL research.
Some of the solutions proposed in the report would also be quite easy to implement. Removing housing authority decals from work vans and trucks would provide some privacy for voucher holders when employees visit the home for inspections and other appointments. Modification of existing software could facilitate the integration of future family owners. Providing myth-busting information to landlords is another, as well as convening focus groups of landlords to get feedback on their experiences.
Other changes, CPAL said, can also be implemented relatively quickly, such as better aligning the program schedule with conventional leases by having a third party, such as a nonprofit, sign a head lease agreement. for specific units with an owner and then subletting those units. to voucher holders. A risk mitigation fund could offset any potential damage to the unit could also improve program participation, as could having experienced owners mentor others who have just entered the voucher program.
The report acknowledges that there are longer-range questions that need to be asked about how to improve the voucher program, and this report is meant to be a starting point for further conversations. CPAL says he plans to lead an as-yet-unnamed project designed to build early momentum as well.
With nearly 300,000 Dallas residents living in poverty and nearly 600,000 living in housing-struggling households, moving the needle toward affordable housing is imperative. This report provides the lay of the land and also provides the foundation for the kind of original thinking needed to address how we house our community.
Bethany Erickson is the Senior Digital Editor of Magazine D. She has written about real estate, education policy, the stock market, and crime throughout her career, and sometimes all at the same time. She hates lima beans and 5 a.m. and takes SAT practice tests for fun.