December 3, 2024

Denton’s Providence Village homeowner’s association made national headlines when it attempted to oust tenants who were using 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 landlords to accept vouchers, the vast majority do not. A new report reveals just how difficult it is for low-income renters to find a rental residence even after the government agrees to pay for most of it.
A new report by Dallas-based nonprofit Child Poverty Action Lab and IDEO.org examines the difficulties voucher holders face in finding housing in North Texas, where only 7 percent of the surveyed apartment complexes in four counties—Denton, Dallas, Tarrant, and Collin—reported taking vouchers. (The survey included “1,413 reasonably priced private market apartment complexes.”) Market rent is up 12 percent year-over-year in Dallas County, but household income has only increased by 4.4 percent.
Voucher holders in Texas can sit on a waiting list for almost two years before entering the program. Dallas County’s list, for instance, is currently closed. (That’s different from the Dallas Housing Authority, for the record.) But even after securing a voucher to help pay for housing, renters have to find a landlord that will actually take it.
Vouchers are often the only way very low-income Dallasites can afford leases on apartments renting for market rates, which is most of the available housing stock in the city. Twenty states prevent landlords from refusing Section 8 vouchers, but Texas isn’t one of them—in fact, state law includes only an exception for veterans who have secured vouchers.
The premise of CPAL’s report is this: How can the experience of renting to someone with a voucher be made the same or better as renting to someone without one? That question may sound simple, but the report finds that the problem requires overcoming neighborhood opposition, misconceptions about who is in the program, and reluctance by potential landlords to accept federal housing dollars.
If someone is approved for a voucher and finds an apartment or home that will accept them, the local housing authority pays the landlord directly. Those payments can cover some or all of the rent, depending on how much income the household is bringing in. On average, nationally, the split is something like 60 to 70 percent paid by the vouchers and the remainder paid by the renter.
Voucher amounts are based on the fair market value of each ZIP code, which the U.S. Department of Housing and Urban Development determines once a year. In a market like Dallas, where rents have shot up and are often adjusted frequently by landlords, the federally-defined fair market values are often lower than what current values really are. That means landlords might be reluctant to risk losing money.
The rules for the program were set in the 1970s, when most rental properties were owned by individuals. Today, institutional buyers and investors hold a far larger share of rental properties.
CPAL finds that working with the housing authority means getting approval from every single person with an ownership stake in the property. 
Requirements for lease periods might differ from the systems the landlord already has in place. Other barriers to working with vouchers include finding insurance underwriters that don’t view it as a risk; navigating banks and lenders that will not finance loans for properties that count more than 10 percent of its residents as voucher holders; and the landlord must keep detailed records to provide to the housing authority.
CPAL interviewed voucher holders, landlords, and public housing authority employees. It identified that the largest barriers to entry may actually be in the perception of both the voucher program and those who use vouchers.  
Voucher holders interviewed said they felt landlords and neighborhoods opposed to vouchers looked at them as lazy and not self-sufficient. The National Low Income Housing Coalition found that in Texas, 45 percent of low-income renters are in the workforce. To afford a two-bedroom home at fair market rent in Texas, a household would need to earn almost $47,000 a year. A very low-income household, on average, brings in $26,200 per year.
Landlords interviewed acknowledged that it can be a challenge, but they ultimately felt that Section 8 “got a bad rap.” (But the vast majority still don’t accept them.) Often, the interviewers found that those involved in the voucher system felt that people were holding on to old information and were unaware of improvements to the system that made it easier for landlords to rent to this population. 
In Dallas, nonprofits often provide wraparound support for voucher holders, believing that eventually they’ll use the housing stability to find reliable employment that pays a living wage. Nationally, voucher holders spend about three years on the program, a HUD report found. The same report said that users of housing assistance, which would include several 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 in a household with children but were not elderly or disabled.
But to go back to the question—what needs to happen to make renting to a voucher holder just like renting to any other person? For CPAL, the answer isn’t in dismantling the system in place, but instead focusing more on the relationships between voucher holders, landlords, public housing authorities, and the nonprofits that provide services.
The report said that looking for opportunities to tell new and more accurate stories about voucher holders will help, as will explaining why a voucher is a financial tool for reducing housing costs—just as, for instance, the homestead exemption on your property taxes reduces the cost of owning a home.
Improving lender participation is also necessary, especially when it comes to producing more affordable units. The Federal Housing Finance Agency recently proposed a rule change for Freddie Mac and Fannie Mae that would require at least 61 percent of the multifamily lending they engage in 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 and older tenants to live together affordably. Making it easier for mom-and-pop landlords to participate in the program would also be a benefit, CPAL’s research found. 
Some of the solutions offered in the report would be fairly easy to implement, too. Removing housing authority decals from vans and work trucks would provide some privacy to voucher holders when employees visit the home for inspections and other appointments. Tweaking existing software could make it easier to onboard prospective mom-and-pop landlords. Providing myth-busting information to landlords is another, along with convening landlord focus groups to get feedback about their experiences.
Other changes, CPAL said, can also be implemented relatively quickly, like better aligning the program’s timetable with conventional leases by getting a third party—like a nonprofit—to sign a master lease agreement for specific units with a property owner and then sublease those units to voucher holders. A risk mitigation fund could offset any potential damages to the unit could also improve participation in the program, as would making experienced landlords a mentor to others who have just entered the voucher program.
The report acknowledges that there are more long-reaching questions that need to be asked about how to improve the voucher program, and this report is meant to be a jumping-off point to further conversations. CPAL says it plans on leading an as-yet-unnamed project designed to create some early momentum, too.
With nearly 300,000 Dallas residents living in poverty, and almost 600,000 living in housing-distressed households, moving the needle on affordable housing is imperative. This report provides the lay of the land and also provides the foundation for the kind of out-of-the-box thinking needed to address how we house our community.
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