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Section 8 Housing

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There’s been much news swirling around Section 8 housing, whether in Washington, the California statehouse or in the City by the Bay, where years of financial mismanagement has finally caught up with the San Francisco Housing Authority (SFHA).

Ben Carson muses about his future, but whenever he decides to bow out from heading HUD, he’ll leave behind a lot of ruffled feathers. Under his leadership, Carson has dialed back civil rights enforcement at the agency, suspended Obama-era rules that had been aimed at fighting housing segregation, and sought to triple the minimum rent paid by families on federal housing assistance.

For the embattled San Francisco Housing Authority, however, doubling the rent wasn’t an option. When HUD pressured the agency to bring in more money to cover budget shortfalls, SFHA balked at raising the minimum amount of rent housing voucher recipients have to pay, from $25 to $50 – the extra $25 was a deal breaker for the housing  authority.

When push came to shove, the federal government said: “You’re fired,” putting an end to a string of scandals and embarrassments. Rent relief for 14,000 low-income households is now in the City of San Francisco’s hands.

The conclusion of this debacle came not long after the federal government reopened for business after a protracted shutdown that forced many landlords to tap into their reserves. In an earlier article, we said that participation in Section 8 has always been a trade-off between guaranteed subsidies and other perks, and less endearing aspects of the program. Yet the government shutdown taught rental property owners that housing authorities could run out of money. The prospect of programs going broke fundamentally challenged the inviolability of rent security that has been so appealing to landlords who accept Section 8 vouchers. Without the assurance of the government’s regular checks, this give-and-take relationship crumbles and the system collapses with it.

Of course, the Section 8 program has never been big enough to subsidize everyone who qualifies to be on it and the program largely relies on willing private landlords who opt to work with housing agencies and voucher holders. Yet, whoever came up with the clever phrase that a rising tide lifts all ships clearly did not have Section 8 housing in mind. In today’s red-hot Bay Area real estate market, many landlords are giving Section 8 a cold shoulder, leading some cities to offer the promise of easing inspections and other reform, as well as to dangle carrots to attract more landlords. Oakland, for example, is offering financial incentives to hang on to more landlords.

Many of our clients, however, have found that once they opt-in, it’s until death do us part. The Oakland Housing Authority (OHA) will only sever ties when the lease has been terminated in accordance with the Just Cause for Eviction Ordinance and so, given the difficulty of exiting Oakland’s Section 8 program, owners are advised to do a careful cost/benefit analysis before taking the plunge.

No matter where you stand in the love-hate relationship with Section 8, Senator Holly Mitchell, a Democrat from Los Angeles, would compel rental housing providers to consider tenants who receive federal housing voucher assistance. If passed, SB 329 would make it illegal to deny a tenancy on the grounds of the applicant’s participation in the federal Housing Choice voucher program.

A law is already on the books prohibiting discrimination against a prospective tenant based on some sources of income (for example, Social Security, pensions, CalWorks, or the type of job one holds). California does not define Housing Choice Vouchers or other rental assistance programs as income, so the state law does not currently protect Section 8 clients.

Under the proposed legislation, this definition of source of income would be expanded to include housing subsidies paid by the government directly to landlords.

We hasten to say that while current federal law doesn’t make it illegal for landlords to deny a tenancy based on Section 8 participation, some municipalities such as Berkeley and San Francisco have filled the void. In case you were wondering, those type of ordinances have survived judicial challenges.

Landlords are reminded they can use their regular screening criteria regarding tenant history. Any reason that can be used to deny any other tenancy – a checkered rental history, for example – can also be used when the applicant is a voucher holder. Some owners mistakenly believe non-discrimination laws require them to rent to any voucher holder. While housing providers cannot refuse to accept a tenant based on his or her use of a voucher to help pay rent, more suitable tenants can be found when vetting a pool of candidates. When it comes to this type of communication, less is more.

Discriminatory advertising

Caution should be used when advertising the rental unit, as we have seen many apartment listings with exclusionary language that runs afoul of fair housing laws. When the language expresses a preference for certain groups or, conversely, attempts to discourage other groups from applying, it invites liability.  Property management companies that experience high employee turnover and a lack of formalized legal training are especially at risk of publishing ads like these.

Getting the elephant out of the room

Many landlords who give the cold shoulder to Section 8 applicants feel their position is justified by some preconceived belief that housing voucher recipients will cause damage to the rental unit or instigate other problems. Bornstein Law’s position has always been that no group should be painted with a broad brush.

We always operate under the assumption there are good landlords and bad landlords and in like fashion, there are good tenants and bad tenants. While there is a set of landlords who can relate horror studies about renting to Section 8 tenants, there is no shortage of bad experiences that can be told by landlords who rent to other tenants who do not hold housing choice vouchers. Indeed, many tenants who rely on these vouchers are extra studious tenants because he or she does not want to risk becoming ineligible for the program, so, once again, we urge proper screening to evaluate rental risks on a case-by-case basis.

Domestic violence in public housing

It’s been said that home is where the heart is, but what happens to the home when the heart is broken? When domestic violence rears its ugly head, it is a difficult subject that cannot be ignored. In our next article, we take on the Violence Against Women Act and HUD protections afforded to survivors of domestic violence. Subscribe here to stay in the know or follow us on Facebook.

Although potential minefields always await landlords, participating in Section 8 has its own unique challenges, paperwork, and rules. but you can count on Bornstein Law for proper counsel.

Section 8 housing has been the subject of some controversy and conflict lately. With a good deal of misinformation floating around, widespread landlord bias against Section 8 tenancies and a potential legal minefield for landlords, we felt obligated to chime in on the housing choice voucher program.

Spawned by 42 U.S.C. §1437, Section 8 aims to assist low-income families, the elderly and disabled to afford decent, safe and sanitary housing in the private market, but like most other matters that cross our desk, the law is much cleaner on the page than in real life application.

Rental property owners seem to have a love-hate relationship with Section 8. Their participation in the program has always been a trade-off between rent security through guaranteed subsidies, shorter vacancies and lower turnover, among other perks, and the unique challenges landlords face when renting to a tenant with a Section 8 voucher. Less endearing aspects of the program include frequent inspections, a labyrinth of regulations, ceilings on amounts the government will pay, concerns over possible property damage and the collection of security deposits, to name a few.

Getting the elephant out of the room

There is a pervasive belief held by many landlords that Section 8 tenants are destructive, with no shortage of horror stories that beset owners can tell to back up their claim – we will resist the temptation to recount the details of these tales. We hasten to say that excessive wear and tear can be afflicted by any tenant, regardless of their income source.

At Bornstein Law, we always operate under the presumption that there are good tenants and bad tenants. By the same token, there are good landlords and bad landlords, so it’s our belief that no group should be painted with a broad brush.

Some landlords do not share our sentiment and have a bias against Section 8 rental applicants. We have always maintained that the wholesale exclusions of any group expose landlords to liability, and a categorical policy of refusing to rent to recipients of Section 8 vouchers is no exception.

What the law says, and where it is mute

The Fair Housing Act (FHA) a federal law, doesn’t bar landlords from discriminating based on Section 8, but some states and municipalities do, oftentimes as part of a larger contextual ban on “source of income” or “public assistance status.” We’ve noted that California defines discrimination much broader than federal law, with the envelope of protected classes constantly being pushed.

Unique protections in the Bay Area

As one of the greatest enclaves of tenant protections anywhere, it’s with little surprise that some Bay Area municipalities have led the charge in discouraging the rejection of Section 8 applicants and codifying this disfavor into law.

Berkeley is one bastion of protective measures for low-income renters – if you say “no” to a Section 8 applicant, it may be tantamount to housing discrimination, as part of Ordinance No. 7568.

The Oakland Housing Authority is dangling financial incentives to landlords who rent to Section 8 participants, but in an earlier article, we related the frustration of many Oakland landlords who experience hurdles in exiting the program – owners who want to divorce Section 8 may find that it’s until death do us part, so a careful cost/benefit analysis is recommended before opting in.

In San Francisco, a longstanding argument over a law that prevents landlords from rejecting Section 8 has been settled for now, as the First District Court of Appeal ruled in favor of the city and affirmed protections for voucher recipients. But with further appeals in the offing, it is likely that we haven’t heard the last of this.

Parting thoughts

We note that there are unique documentation and unforgiving deadlines with the termination of tenancies and rent increases with Section 8 participants and the rules must be followed to the letter.

We also stress that when there is a failed relationship, Section 8 evictions are highly nuanced. The tenant can only be evicted for repeatedly violating the lease agreement, breaking the law in connection with the property, or another “good cause,” an ambiguous term best journeyed with an attorney.

In the vast majority of the cases we handle, tenants violate the lease agreement by failing to pay rent, but there are more nebulous reasons such as violations of the occupancy standards or nuisance violations.

For proper counsel, contact our office for experienced driven, informed advice on the Section 8 program and any other orbits of your real estate business.

 

Whoever came up with the clever phrase that a rising tide lifts all ships clearly did not have Section 8 housing in mind.

In the currently red-hot East Bay real estate market, we’ve seen a growing number of Oakland landlords that want to opt-out of Section 8 housing. When buyer’s remorse sets in and rental property owners want to jump ship, these owners get discouraged to learn that it’s not so easy to part ways.

A landlord’s participation in Section 8 has always been a trade-off between the appeal of rent security through guaranteed subsidies, shorter vacancies and lower turnover, among other benefits, and less endearing aspects of the program such as onerous regulations and oversight. The calculus changes in rising real estate markets, when the bad outweighs the good.

Take a look at one landlord’s harrowing experience with subsidized housing. Although this video is from Omaha, the frustrations of this owner should resonate with rental housing providers everywhere.

Closer to home, Oakland landlords cannot unilaterally opt-out of the Section 8 program. The Oakland Housing Authority (OHA) will only sever ties when the lease has been terminated, and this begs the question how to terminate the tenancy. The answers are found in Oakland’s Measure EE, the Just Cause for Eviction Ordinance that delineates the legally recognized grounds for eviction.

As the foremost practitioners in just cause evictions and managing landlord-tenant relationships, Bornstein Law is happy to engage and answer any questions related to Section 8 and assist Oakland rental housing providers transition away from the program if permissible reasons exist.