Why on Earth Would I Want to Be a Section 8 Landlord?

Transcription

1 Why on Earth Would I Want to Be a Section 8 Landlord? A Presentation to the Gulf Coast Real Estate Investors Assocation September 20, 2016

2 First: What is Section 8? Section 8 is part of the Housing Act of It authorizes the payment of rental housing assistance to private landlords on behalf of low income households. The largest part of Section 8 is the Housing Choice Voucher program, which allows the tenant family to select where to live. Often considered the gold standard of affordable housing programs because it maximizes the participant s choice of housing solutions.

3 Renting in Escambia County Total households* 116,238 Renter households* 40,820 Percentage of renter households* 35.1% Percentile of renters, compared to other counties* 86 th (High Renter County) Renters overburdened in Escambia County** 51.1% * Source: U.S. Census Bureau, 2010 Census ** Source: U.S. Census Bureau, 2013 American Community Survey

4 Housing Choice Vouchers in Escambia County General (Section 8) vouchers allocated 2,288 VASH vouchers (for homeless veterans) allocated 182 Total vouchers allocated 2,470 Percentage of Escambia Co. renters w/ vouchers 6% Current lease-up rate (September 2016) 98% / 96% Attrition rate 8% Annual vouchers returned (projected) 198 Applicants active on waiting list (SEPT 2016) 1,324

5 Voucher Program Eligibility for Landlords Relationship to the unit must be clear, and you must be legally able to enter into a contract regarding the unit. Meaning: Owner of record on the property appraiser website; or a trustee or member of the LLC; or can provide a current property management agreement between you and the owner of record. Out of area owners must have a local representative. Must not be disbarred by HUD or a PHA for fraud or contract violations. The landlord (owner or agent) cannot be related to any member of the tenant household, except in special circumstances.

6 Voucher Program Eligibility for Landlords, con d Landlords must conduct rental application screening in accordance with Fair Housing Law. Screening criteria should be transparent, and should not discriminate on the basis of race, color, religion, sex, national origin, disability, or familial status. As of 2012, voucher program landlords must also comply with HUD s Equal Access Rule, meaning they won t discriminate on the basis of sexual orientation, gender identity, or marital status. If you deny a rental application, be transparent about your reason.

7 Voucher Program Eligibility for Units Property taxes on the unit must be current. Your proposed rent must be Affordable for the household. Unit Household The unit must be decent, safe, and sanitary and pass a Housing Quality Standards inspection before the contract starts. Your proposed rent must be Reasonable in relation to the market. Unit Local Rental Market

8 HAP Contract When the unit has been confirmed, Pensacola Housing instructs the voucher holder to have utilities turned on in the head of household s name (except for utilities the landlord is including as part of the rent). The landlord and tenant execute a lease that includes the HUD- Required Tenancy Addendum. The landlord brings a copy of the lease to the Housing Office, and Pensacola Housing and the landlord execute a Housing Assistance Payments Contract (HAP Contract).

9 Continued Assistance Program participants must participate in annual recertification. Changes in income or composition must be reported promptly. Participants must comply with all program rules and with their lease. Court-ordered eviction from the assisted unit, or violation of program rules, may be grounds for termination of assistance. Common causes of attrition: reaching financial self-sufficiency; voluntary return of the voucher; expiration of the voucher; death; failure to recertify; violation of the obligations of the family.

10 VASH Program for Homeless Veterans Pensacola Housing has 182 voucher allocated for participants in the HUD-VASH program to house homeless veterans. These rental applicants may have issues commonly associated with homeless veterans, including PTSD, addiction issues, or criminal histories. VASH voucher holders are assigned a VA case worker and commit to a case plan. Noncompliance with the case plan may be grounds for termination from the voucher program. VASH households tend to be smaller in size, so studios and one-bedrooms are especially needed. Like Section 8 voucher families, VASH families may be elderly, disabled, working poor, or families with children.

11 Advantages for Landlords Timely subsidy payments. The HAP (subsidy) is transferred directly to your account each month. Fewer collection issues. If the tenant has a rent portion, it is affordable for the household. Free advertising. There are always voucher families looking for units. Less turnover. If the unit is a good fit for the voucher household, they may renew in place as long as they remain eligible for assistance.

12 Disadvantages for Landlords Government intervention. We inspect your unit. We tell you whether your rent is reasonable. No decrease in workload. The Housing Office does not participate in lease enforcement, and the HAP Contract indemnifies HUD and Pensacola Housing from damages. So, all the landlording work is still on you. Reputation. Section 8 tenants can have a bad reputation. We believe this is a combination of prejudice + poor landlord practices. But ultimately you have to decide for yourself.

13 What We re Looking For Professional Landlords who have a working business model. You re not running a charity. We know that. It s not supposed to be a charity. It s supposed to be a profitable business for you. Landlords who aren t afraid of screening and lease enforcement. See above. Units* of all sizes and types in Escambia County that are decent, safe and sanitary. Energy-efficient is also a big bonus. *With proposed rents that are competitive for similar affordable units in the area. (Not luxury units.) We are especially interested in units in low-poverty census tracts.

14 For More Information Pensacola Housing Office 420 W. Chase St (850) Web: Blog: