The Incentives That Might Make Landlords Take Section 8 Tenants
While “Section 8” has long served as a dog whistle for racist opponents of welfare, recent research suggests that reluctant landlords aren’t entirely motivated by bias. With a few nudges, landlords could even be persuaded to return to the program, meaning better opportunities for families with housing assistance, something that’s crucial for children especially, as research from Harvard economist Raj Chetty’s Opportunity Insights program has shown. This theory is the basis for a bipartisan bill before the Senate that would add new features to the voucher program to try to lure property owners back into the fold — including signing bonuses for landlords.
The Choice in Affordable Housing Act, which Delaware Senator Chris Coons and North Dakota Senator Kevin Cramer are introducing Thursday, aims to fix one of the biggest hitches in the housing vouchers program: Too many landlords resist participating in it. Right or wrong, what they think of the program matters. So the bill is filled with carrots for property owners who have fled the program, as well as straightforward cash benefits for others who decide to join.
“Housing is the foundation to a safe, healthy, and productive life, and by increasing the number of landlords that accept Housing Choice Vouchers, more Americans will have greater choices and opportunities in finding a home to build their foundation upon,” Coons told Bloomberg CityLab in a statement. “This is a commonsense solution that would open doors for low-income families — an important step toward addressing housing affordability issues across the country.”
The bill arrives at a time of heightened anxiety for tenants, with the future of the federal eviction moratorium uncertain and full economic recovery still months or years away. This proposal could wind up as part of the American Jobs Plan — housing is infrastructure, as numerous Biden administration officials have underscored. But it could also stand alone as a reform bill for a federal housing assistance program that has long been beleaguered by years-long waiting lists and administrative burdens. The Choice in Affordable Housing Act would aim to tackle both.
Signing bonuses, for example, would be available for landlords who own property in a census tract with a poverty rate of less than 20%. The bonus would be capped at two times the value of one month’s federal subsidy (with a limit of one reward per landlord). That’s one way that the lawmakers hope to expand the geographic scope of the Section 8 program and introduce voucher holders to neighborhoods where they are currently excluded.
Coons’ and Cramer’s bill would authorize $500 million for such incentives. Beyond the signing bonuses, this new Herschel Lashkowitz Housing Partnership Fund — named for the late mayor of Fargo, North Dakota — would include assistance for security deposits, another feature to expand the horizon for voucher holders searching for a place to live. The fund would also hand out bonuses to local public housing agencies, the operators that administer vouchers, to retain a landlord liaison on staff. Other adjustments would address how the U.S. Department of Housing and Urban Development manages the federal side.
The incentives in the proposed bill draw on recent research into what landlords want — a critical but often overlooked question in discussions about housing aid. Despite the Section 8 program being a form of public–private partnership, lawmakers and advocates have typically neglected the landlord side of the equation, according to Stefanie DeLuca, professor of sociology and social policy at Johns Hopkins University. With colleagues Philip M. E. Garboden, Eva Rosen and Kathryn Edin, DeLuca sampled landlords in Baltimore, Cleveland and Dallas. “We did something that was unusual,” DeLuca says. “We talked to landlords about what it was like to find tenants and work with housing agencies.”
Landlords — especially owners of older properties in Baltimore and Cleveland — told researchers that the regular inspections the voucher program mandated were burdensome and unpredictable, to name one issue. They also don’t want to be held responsible for any damage done to their units by tenants using federal aid (landlords grossly inflate the potential liability of voucher holders). And they don’t like that it’s hard to reach someone when they have questions about the program. The new bill from Coons and Cramer includes provisions that touch on each of these concerns: If a housing unit has passed an inspection for another federal program, it gets reciprocity for the vouchers inspection. New local landlord liaisons would have a hotline to HUD.
“Lots of landlords who have properties in high opportunity areas are willing to lease to voucher households,” says DeLuca, who supports the bill. “With the right kinds of services, landlords are perfectly happy to participate in the voucher program.”
To be sure, many landlords who reject voucher holders refuse them out of hand, for reasons that might have nothing to do with program design. While some housing assistance recipients belong to categories protected from discrimination under the Fair Housing Act, voucher holders as a class are not protected under federal law, and property owners have not been coy about taking advantage of that. (Former President Donald Trump, who as a landlord was sued by the U.S. Department of Justice in 1973 for violating the Fair Housing Act, declared in his 1987 autobiography, “What we didn’t do was rent to welfare cases, white or black.”)
This still-legal form of housing discrimination has earned the attention of state and local lawmakers in recent years. A handful of states and a few dozen cities now prohibit discrimination based on source of income, and Virginia Senator (and fair housing stalwart) Tim Kaine has led efforts to write this protection into federal law. Better enforcements of these laws is necessary to drive the point home to landlords in these places, advocates say. The issue is far from settled in the law, however. In Iowa, Governor Kim Reynolds just signed a bill in April that enables Iowa landlords to discriminate against voucher holders.
The idea behind the proposed Choice in Affordable Housing Act is to defuse the knee-jerk criticism of Section 8 vouchers by improving the experience for landlords. And for tenants, too: People who grew up in entrenched poverty facilitated by the program don’t speak fondly of vouchers. One technical fix could boost the program’s uptake in higher-rent areas by using a zip-code-based formula for increasing the value of the subsidy (known as “small area fair market rents,” the subject of this helpful explainer by CityLab’s Brentin Mock). The new bipartisan bill would dramatically expand the number of metro areas using the SAFMR formula from 24 to 72.
Access to opportunity matters for families. Housing vouchers could be a key to greater opportunity, so long as landlords let them in. Sweetening the deal by adding services for landlords could make them a lot more receptive to vouchers. That’s the theory, and it might actually come up for a test. Coons, a member of the Senate Appropriations Committee, and Cramer, who is on the Senate Banking Committee, are ideally placed to make Section 8 reform into law, even in a polarized Senate.
As Harvard’s Chetty notes, the stakes of the program’s success could be even higher in a post-pandemic economy. A Seattle experiment led by Chetty, who has researched the benefits of moving to places with more resources, showed that Housing Choice Vouchers can indeed drive social mobility — with added services to help both tenants and landlords make the most of the program. The very low-income families hurt most by the pandemic will need help to get back on track.
“Research shows that increasing families’ access to high-opportunity areas is an important pathway to upward mobility,” Chetty said in a statement. “Children who grow up in opportunity-rich neighborhoods are more likely to go to college and to earn more as adults. Making it easier for landlords to participate in the Housing Choice Voucher program is critical for increasing housing supply in opportunity rich areas and by way of this, supporting families’ long-term success.”
Source: bloomberg.com
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