“Do you accept vouchers from the township?”
“Do you take Section 8?”
“Are you income-based?”
These are questions that have plagued property managers for years. Contrary to the stereotype, landlords, owners and property managers don’t want to say no to housing assistance, and they aren’t heartless. Landlords are often the target of elected officials and housing authorities when talk of an affordable housing shortage is brought up. If we as a country want to get serious about finding solutions to the affordable housing crisis, I believe we must start listening to landlords.
In 2017, I was part of a company that attempted to join the Section 8 Housing Choice Voucher Program, one of the most popular assistance programs. The first hurdle we met with the Section 8 program was the inspection requirement. Each unit that is offered to a tenant seeking housing assistance is required to be inspected by a housing authority inspector. When we submitted an apartment unit to inspection, we were flagged for having the smoke detector affixed in the “wrong” spot. It was just outside the bedrooms, which is compliant with local fire codes.
Next, we were cited by the inspector for a missing screen. The screen for the window in question was present in the apartment but was removed from the window to make way for an air conditioner the tenant had requested. As a result of these flags, the apartment failed the inspection after we’d dedicated valuable staff time to meet with the inspector and for a 30-minute inspection — time that staff members would typically spend addressing current residents’ needs.
I maintain we can improve the inspection step of voucher programs by submitting each property to an annual inspection, rather than an inspection of each unit each time someone needs housing assistance. Alternatively, assistance programs could offer a self-directed inspection where property staff or the prospective resident took photos on their phone and uploaded them into web portal, as some insurance companies do for homeowners insurance policies. Not only would one of these solutions save property staff members time, but it would most likely allow the organization to eliminate one or more inspector positions and put the money saved toward housing assistance, rather than the salaries of the inspectors.
Next, assistance programs should respect the privacy of the owners. In my experience, for each property, we were asked to submit the owner’s name, Social Security number, address and other personal details to the local housing authority, and subsequently the government — not the owning entity (LLC, corporation, etc.), but the person behind the entity. In most cases, an investor owns an asset inside an entity such as an LLC for many reasons, one being that privacy is extremely important. To make voucher programs more successful, remove this requirement or limit this step to obtaining the LLC details only (FEIN, business mailing address, registered agent, etc.). The entity information should be adequate for any voucher program.
Finally, rent payment for voucher programs needs to be streamlined. Section 8, for example, pays a portion of a tenant’s rent, while the tenant pays the remainder. Other programs follow this model by “splitting” the rent in one way or another each month. This payment method results in two payments to the landlord coming from two separate entities, usually at different times during the month.
This has two adverse effects from a property owner or manager’s perspective. First, a community with 50 apartments accepting housing assistance translates into 100 rent checks to track down before the property can close its books for that month. Voucher programs tout that rent is guaranteed, and while this is true for a portion of the rent, it still creates an administrative burden each month of each year. For government-backed programs like Section 8, when the government shuts down, are those payments still guaranteed? Does the resident get evicted? Who is responsible?
The unexpected consequence of remitting housing assistance this way has to do with a common stereotype. Landlords often complain about how their property is returned when a tenant who was receiving housing assistance vacates. The stereotype is that “the apartment was left trashed after move out.” In my 10-plus years, I have experienced good and bad move-outs in this situation, so to generalize is unfair. However, I believe we could limit or eliminate this sentiment if assistance programs paid assistance directly to the residents. Then, the resident would be responsible for using those funds for housing. If they didn’t, or if they were irresponsible with the assistance in some way, they would face eviction, which would subsequently make them ineligible to receive housing assistance again for a period of time (at least in the case of Section 8). The theory is that this method of payment would naturally prioritize the most responsible people to receive benefits.
Paying assistance directly to the resident removes the landlord’s administrative burden and involvement, and gives the resident more incentive to maintain their rented space. In my experience, residents with higher security deposits or higher monthly rent payments tend to take better care of their rented space. Residents I have encountered with low or no security deposits tend to disregard the lease, move out without notice and more often than not treat the entire premises (not just their apartment) with disrespect.
If we want to get serious about finding solutions to the affordable housing crisis, it’s time we start listening and inviting landlords to the conversation instead of bulldozing rent control laws through state legislatures. Voucher programs should make it easier for the property owners to participate in housing assistance by eliminating the obstacles described above. If all parties are invited to the table, we can make great strides toward solving our affordability crisis without implementing rent controls.