To Fill Section 8 Housing: An Incentive Program Aimed at Cutting Costs, “Risks” For Landlords

 

With the City of Long Beach, like much of the state, struggling to provide enough affordable housing options for its residents Vice Mayor Rex Richardson is proposing an incentive program to ensure that those who have qualified for federal assistance can actually use it in units that have partnered with the city to accept those benefits.

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Richardson, who chairs the city’s housing authority, will submit a request Tuesday night for the city manager, health and human services department and development services to develop a package of incentives to encourage landlords to accept tenants subsidized under the Section 8 housing voucher program. The requested report is expected back before the council within 30 days. 

The package, he hopes, will keep units on the market for those receiving vouchers for subsidized rent instead of losing those units to the open market as well as getting more property owners to accept those voucher-holders seeking homes to rent.

The city currently has a vacancy rate below five percent. The city's housing authority rental database lists about 100 units either available or with potential availability for Section 8 recipients. 


 

“The fundamental issue is that if you are a property owner and you can get a premium on the market because there’s a housing shortage—supply and demand—why would you accept a voucher if there’s a perception that that voucher comes with problems,” Richardson said. “Why wouldn’t you go through the market that’s perceived to be faster?”

Richardson said that an outreach process that began months ago revealed that some of the decline in acceptance rates may also stem from misperceptions of the program.

He noted that some property owners did not know they were eligible to receive 120 percent of market rate rent on voucher-accepting units, that people could be evicted or denied a lease due to prior evictions and even that the city could provide “vacancy payments” to hold units for voucher recipients, adding that those time windows are usually short anyway.

The proposed package could include a streamlining of city-mandated inspections and possibly replacing them entirely with the Department of Housing and Urban Development-mandated free inspection required for units using the housing choice vouchers.

The city could also waive various permits and inspection costs for those landlords accepting the vouchers, provide vacancy payments to those willing to hold units for voucher qualifiers and even the creation of a damage mitigation fund which would assist in repairing any damage done by tenants using the vouchers.

“If folks are concerned that they’ll have increased damage to their property because of a Section 8 tenant, and that hasn’t been perceived by data, but we want to be prepared to have a fund,” Richardson said. “Because if there’s additional risk the property owners should be able to level a deposit that’s commensurate with that risk.”

A call to the Apartment Association California Southern Cities for a request for comment went unreturned by the time of publication.

Housing Long Beach Executive Director Josh Butler says that the package of incentives could help alleviate a portion of the housing crisis that has gripped Long Beach along with much of the rest of the state. He pointed to a woman he’s working with right now, a 40-year resident of the city who's had a voucher in hand since February but has yet to find a landlord willing to take it.

“I think it’s a real sign of the crunch that our market is facing right now,” Butler said. “If vacancy rates were higher, we wouldn’t have this issue. But vacancy rates are so low that landlords are able to take their pick, tenants are applying for places sight unseen, cash in hand, and they’re going to have an advantage over people who have this kind of voucher and have to go through paperwork and a process.”

Butler added that while this is a step in the right direction he’d like to see the city pursue a policy that is more tenant friendly. He pointed to Santa Monica’s recent efforts to establish a new law that would prohibit discrimination against renters based on their sources of income.

He recalled that just a decade ago he was out in front of city hall as part of a rally to save the HUD funding because the city had the units but not the funding to get people into them. Now, the opposite is the case and the city stands in danger of losing funding if the money they allocate continues to go unused.

The city’s housing authority currently partners with about 2,600 property owners and assists about 6,800 households that lease units throughout Long Beach.

The voucher program currently gets about $68 million in funding from HUD which has led to the city’s housing authority being able to provide assistance for nearly 7,400 families or individuals trying to attain stable housing, according to a city document. With those vouchers tenants are usually required to pay a set percentage of their monthly income, usually around 30 to 40 percent with the vouchers making up the rest of the rent payments.


 

While the city’s housing authority has for years attained high marks from HUD for its voucher utilization rate—the amount of vouchers granted and then actually used to secure housing—that rate has slipped in recent years.

Long Beach previously had a utilization rate of 98 percent. In fiscal year 2016 that figure dropped to 88 percent. As of March 1 the city’s rate was 85 percent.

HUD defines a public housing agency as being “high performing” if it maintains an average utilization rate of 98 percent. Any agency below 95 percent is in danger of receiving a failing grade from the department and cannot receive new unit allocations and could risk losing a portion of its funding at the time of renewal with the federal government.

“When the Congress reviews requests for additional housing assistance funding and finds that funds it previously appropriated sit unused, members of Congress assume there either is no real need for housing assistance or an inability to deliver the funds to families in need,” the HUD document said. ”A Congressperson who draws either of these conclusions is likely to vote against additional funding for housing assistance.”

Richardson’s proposal could not only help get many of the 1,000 people currently holding vouchers but unable to find a landlord to accept them into permanent homes. It could also ensure that the city’s future funding for the voucher program is not reduced.

While the federal budget has yet to be approved, President Donald Trump has outlined sharp reductions in domestic spending including over $6 billion in cuts to HUD. However, The Washington Post reported those cuts, for now, do not include reductions to the rental assistance programs like the housing choice voucher program.

The vouchers are fully funded by the federal government and Richardson projects that any kind of fee waivers granted to property owners would have a minimal impact on the city’s budget as they only constitute a small portion of the overall revenue the city takes into its general fund.

“If you’re helping us achieve our public policy goal of placing 600 more people in housing, then we should be able to give you some sort of a break in your business license to incentivize you taking that leap of faith and that additional step to help the city achieve this goal,” Richardson said.

 



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