I am located in Oregon, first time landlord. Our open house is tomorrow and someone has already mentioned they have Section 8 vouchers. My understanding is that it is an opt-in program? But that conflicts with the fact that it is "discriminatory" to tell people that you do not accept Section 8, or to refuse to accept it. I'm so confused. I am not interested in jumping through hoops to get my home "qualified," it would likely delay the move in and therefore impact my income.
Can I still hold the applicants to the same income requirements or am I forced to make accommodations for Section 8? That almost seems discriminatory toward everyone else. Would their voucher count toward income requirements?
Here is a local story, I'm discouraged by it.
@Amanda H., Under the new law, you cannot refuse a Section 8 applicant, but you also do not have to change your criteria specifically for them. As long as you use the same criteria for all applicants, then you are good to go. One thing they do mention is that you cannot "opt-out" of the program just because you don't want to hassle with the paperwork. See the links below for more information.
Discrimination on Source of Funds FAQs
Section 8 Bill
This is a gross generalization. None of our S8 tenants are as you characterize them to be. Our S8 tenants are retired veterans on fixed income, retired seniors on fixed income, and people with qualified disabilities on fixed income. All have contributed to society in the past and some are still contributing in a positive way today. We respect them and they respect us. With any benefit system there will be some people who game the system in an unethical way, but please don't assume all S8 people do.
You need to spend more time down the housing authority listening to the indiscreet people in the waiting room. You also need to chat to the staff a bit more - they know what's happening. There is a massive 'entitlement' chip on the shoulders of some - we've actually watched S8 tenants shout at the HA staff!
I have no problems with people with real disabilities or needs, we're even recommending one tenant to get on the list at the moment, and as I said, we accepted two newly issued vouchers from existing tenants last year.
However, don't for a moment think that the HA is stuffed full of people needing real help.
And there is a very good reason to be extremely annoyed at the people who are faking it (as a lot seem to be), because it pushes back the people who do need help, and makes a waiting list that shouldn't need to exist, 2 years long.
Be careful. Some of the practices given in the quoted post could be considered discriminatory, and the "testers" used by fair housing groups would be able to demonstrate such.
Great point bringing up the testers. I could always tell which ones were testers. I didn't worry about them because I wasn't doing anything against fair housing policies, but they will waste your time.
The testers won't ask normal questions. They won't look to see how big the closets are, they won't ask about parking or utilities. One actually showed up with a clipboard LOL. I gave everyone the same spiel and asked them all the same questions, so I didn't worry about them. Plus, if you saw my tenants coming and going, or even read the names on the mailboxes, we looked like the International House :-)
I had a thought - and it hurt - LOL...
Would it be any easier to get rid of a problem Section 8 tenant, if you only used month-to-month agreements?
Do any Section 8 landlords know if this would work? I'm wondering if that might be a way to avoid Section 8 tenants, or to at least be able to evict them easier if they become a problem?
@Marcia Maynard do you know? Will the housing authorities only do leases?
It probably varies from one HA to another. Our local housing authority (Vancouver Housing Authority) requires us to start with a one-year lease and allows us to use month-to-month or longer term leases after that. The reasoning is that the housing authority invests quite a bit of time and resources to establish the tenant file and contract with the landlord. It is important to them for the tenant to have stability in housing and a one-year lease helps them achieve that goal.
There are requirements as to how often we can raise the rent (once in a 12 month period) and the notice period for changes to any term in the rental agreement is 60 days, instead of the minimum 30 days required by Washington state law. This is to accommodate the needs of the case managers in processing the changes. But we are allowed to use our own rental agreement, the same as we use for our other tenants. The agreement the VHA and the landlord enter into just becomes an addendum to our standard rental contract.
We have never had to evict a S8 tenant. The one time when a S8 tenant became non-compliant, we just contacted her case manager at the VHA and served the appropriate legal notices to the tenant, with a copy sent to the case manager. The case manager met with the tenant and guided her back on track. If the tenant is not conforming to the terms of the rental agreement, they can be evicted according to the landlord-tenant law for our jurisdiction, whether they are on a MTM contract or a longer term lease.
I'm in awe of your knowledge and you are an excellent writer.
It would appear that a landlord could avoid having to rent to Section 8 tenants altogether, according to your info, by simply only using month-to-month agreements across the board, though, since HUD requires a year lease initially.
I can't imagine the housing authority having the ability to require landlords to offer leases. If the only issue is not discriminating for source of income, no problem. Just tell the housing authority you're not discriminating for source of income, and if they want to allow their tenants to sign a month-to-month contract, no problem. Which the housing authority won't do.
So, there you go @Amanda Hayes. Only offer month-to-month contracts, which have nothing to do with source of income.
Hi first time landlord. Congrats on the rental but from your first post and I stopped reading right there and had to ask....why on earth are you having a open house? Are you bored and have nothing else to do with your time? Do you want lots of strangers going thru your home and wasting your time? I don't get it. In this day and age where we have Craig list where you can drop an add and get pages of replies what on earth are people thinking about having a open house. With those pages of replies I pluck out my renter and usually only reply to 1 or 2 parties. Applicants these days offer up way more info then is asked and narrowing it down is pretty easy.
If you are having open houses and letting folks fill out applications and are taking screening cash from multiple parties you are not long for the REI world. You are responsible for all information you collect from these parties so do not collect more then you have to.
Good Luck
@Account Closed - having read the link you just provided, I can see where the one stated example from your earlier post came from. I found it odd that this link stated that the voucher amount is NOT a source of income! But I am still baffled a bit about the affordability as I gave in a real life example in my earlier post in this thread. This link you provided does not explain how that person with $900 per month of income can pay all living expenses; it just picks on a loophole in rental criteria where most would just state income of 3 times rent, by arguing the tenant's rent is just a fraction of the total amount the landlord is to receive. So now we have to stipulate an explicit dollar amount of income, not "3x rent and rent is $1200" - but rather "income must be $3600 minimum". And since the voucher amount doesn't count, the section 8 applicant has no chance of qualifying under that criteria - even though the landlord might have actually been willing to accept a section 8 applicant where income plus voucher was 3x rent. That starts to sound like unfair housing ... but it follows from the fair housing position on voucher and "rent".
I hear you on the affordability issue. It makes no sense to use a rent multiplier if one applicant has $2400 for monthly expenses and another has only $900....and you have to accept the $900 as equal to the $2400. But as I mentioned earlier, rent multipliers no sense to me for low income people anyway.
From my limited experience with Section 8, and what the news article linked says, I believe like this: You may not advertise AGAINST Section 8, however I have found that finding other non-discriminatory reasons for not leasing to them are not hard to come by. Especially things like credit history, criminal backgrounds and/or debt-to-income, etc.
But others on here, I'm sure, have more and better things to say.
IMO, in some better areas in states where landlords must accept S8, it's going to get harder to disqualify applicants based on things like poor credit or criminal track records. There are so many educated young adults right now with good credit post college, good rental references, no criminal history, steady jobs, but low incomes that qualify them for things S8, especially those with children. They'll look perfect on a rental application. And they will know to sue if they think they have been discriminated against.
If I really don't like someone, there's always a way to make then go elsewhere without denying them housing, this enticing them to reject your offer of housing.
charge higher rent
ask for a higher deposit
make fun of their car or clothes
be late for an appointment, continue to offer them appointments at weird times or locations
charge for applications and or showings
approve their application, but for a different property, not the nice one.
charge a move in fee
In general, it's okay to charge a higher rent/fees if you think the tenant is high risk. It's good business, and banks do the same thing with interest rates. They charge risky borrowers more. You can too. Sign a month to month lease and charge $300/mo extra. If they take it, then great. You're making extra. They'll probably decline and go elsewhere.
my point is that you can structure the rent in such a way that you could profitably accept nearly all applicants. Just know that you don't have to charge everyone the same price for everything.
Be careful. Some of the practices given in the quoted post could be considered discriminatory, and the "testers" used by fair housing groups would be able to demonstrate such.
You have to have policies in place that make the same requirements of all tenant applicants. You can't make up the requirements as you go along. If you want to charge higher rent, you have to show a policy of how and when it applies, and then apply it to all applicants. Like Steve said, any of the legal aid testers would take you down in a heart beat.
May I suggest that you stop posting things that might help incriminate you on public message boards. You own properties in your own name in the location in your profile, in addition to whatever family business you are connected to. I recommend backing off from the discrimination suggestions while you are actively land lording. .
I can't imagine the housing authority having the ability to require landlords to offer leases. If the only issue is not discriminating for source of income, no problem. Just tell the housing authority you're not discriminating for source of income, and if they want to allow their tenants to sign a month-to-month contract, no problem. Which the housing authority won't do.
So, there you go @Amanda Hayes. Only offer month-to-month contracts, which have nothing to do with source of income.
I think you missed the point. One, each HA differs in how they operate and what they require. Two, Oregon has their own way of doing things and to say you only do month to month contracts in an attempt to circumvent the intent of the law seems less than ethical. Three, just do business as you normally do, MTM or leases, tenant screen as you normally would, don't advertise that you don't accept S8. The S8 tenant will either qualify or not and your property will either qualify or not. If they qualify, negotiate with the HA to make it work for all parties involved.
I can't imagine the housing authority having the ability to require landlords to offer leases. If the only issue is not discriminating for source of income, no problem. Just tell the housing authority you're not discriminating for source of income, and if they want to allow their tenants to sign a month-to-month contract, no problem. Which the housing authority won't do.
So, there you go @Amanda Hayes. Only offer month-to-month contracts, which have nothing to do with source of income.
I think you missed the point. One, each HA differs in how they operate and what they require. Two, Oregon has their own way of doing things and to say you only do month to month contracts in an attempt to circumvent the intent of the law seems less than ethical. Three, just do business as you normally do, MTM or leases, tenant screen as you normally would, don't advertise that you don't accept S8. The S8 tenant will either qualify or not and your property will either qualify or not. If they qualify, negotiate with the HA to make it work for all parties involved.
No, I believe I understood your point.
If it's legal to circumvent a government policy that requires private owners of rental properties to have to participate in a government program that will require them to eat the cost of more management and accounting and inspections and headaches and that requires them to have to follow rules and regulations only required by a government entity, in which these private property owners have no representation (because these HUD rules cannot be voted on by these same property owners) - then I have absolutely no problem with legally circumventing this situation at all.
To say it's just a matter of source of income is really .....unreasonable at best. If it was truly just a matter of source of income, then the Housing Authority should just give the rent money to the tenant. Then the landlord can treat the tenant as he/she would any other tenant within the same landlord-tenant laws, with all of the rights allowed the landlord under statutory law.
Requiring property owners - and only property owners who happen to rent out that property - to be required to be the providers of government housing, is just wrong. And unethical.
There are states who are fighting these laws and in my opinion, they will win. In the meantime, while the fight is on, this system needs to be fixed. The Housing Authorities are just shooting themselves in the foot. There will be less and less private landowners who will invest in rental properties. This is already happening in a big way in the SF Bay Area. And who can blame them?
So, add rent control on top of a requirement for participating in the HUD voucher program? This is so unfair, there aren't words to describe it.
What's next? We require all restaurants to offer their food at controlled prices? What if all business sectors were under the government's thumb in this way?
The way to provide Section 8 housing, in privately owned properties, in my opinion, is to have it done with the tax incentive buildings that specialize in subsidized housing, which I happen to live in. This is fair. All parties go into business together willingly.
To force private landlowners to be subsidized government housing providers - against their will, is so un-American. And I'm someone with a Section 8 voucher. And I am incensed that this is going on.
So, no, I would have no problem legally circumventing this fiasco. And it looks like it's completely legal to simply offer month-to-month agreements across the board.
Next, they'll pass a law saying you have to have one-year contracts for all of your tenants. In the meantime, here's your way out.
/rant.
I can't imagine the housing authority having the ability to require landlords to offer leases. If the only issue is not discriminating for source of income, no problem. Just tell the housing authority you're not discriminating for source of income, and if they want to allow their tenants to sign a month-to-month contract, no problem. Which the housing authority won't do.
So, there you go @Amanda Hayes. Only offer month-to-month contracts, which have nothing to do with source of income.
I think you missed the point. One, each HA differs in how they operate and what they require. Two, Oregon has their own way of doing things and to say you only do month to month contracts in an attempt to circumvent the intent of the law seems less than ethical. Three, just do business as you normally do, MTM or leases, tenant screen as you normally would, don't advertise that you don't accept S8. The S8 tenant will either qualify or not and your property will either qualify or not. If they qualify, negotiate with the HA to make it work for all parties involved.
There you go again, Marcia. Being all pragmatic and logical. Taking all the fun out of inflammatory and ignorant posts. Such a spoiler :)
@David H. ;-) Joke, right?
I can't imagine the housing authority having the ability to require landlords to offer leases. If the only issue is not discriminating for source of income, no problem. Just tell the housing authority you're not discriminating for source of income, and if they want to allow their tenants to sign a month-to-month contract, no problem. Which the housing authority won't do.
So, there you go @Amanda Hayes. Only offer month-to-month contracts, which have nothing to do with source of income.
I think you missed the point. One, each HA differs in how they operate and what they require. Two, Oregon has their own way of doing things and to say you only do month to month contracts in an attempt to circumvent the intent of the law seems less than ethical. Three, just do business as you normally do, MTM or leases, tenant screen as you normally would, don't advertise that you don't accept S8. The S8 tenant will either qualify or not and your property will either qualify or not. If they qualify, negotiate with the HA to make it work for all parties involved.
There you go again, Marcia. Being all pragmatic and logical. Taking all the fun out of inflammatory and ignorant posts. Such a spoiler :)
Inflammatory and ignorant? Ignorant means someone is not knowledgeable on a subject.
Therefore, I beg to differ.
@David H. ;-) Joke, right?
Partly sarcastic, but still very real. There's no requirement to have underwriting policies documented. You just have to make sure you're not approving/declining an applicant based on race, color, sex, religion, creed, national or ethnic origin, age, familial or marital status, handicap or disability or sexual orientation. So, if you're declining someone because you thought they were rude and mean, so be it. If the prior landlord complains that they play loud music, you don't have to approve them. If you want to go high horse and approve everyone, so be it, but have a contingency plan when tenants default.
Some will argue that discriminating against Section 8 means you're discriminating against black people because there's a high correlation between the two. The argument fails though because you still did your underwriting and were able to provide whatever reason you came up with that isn't a protected class.
There's nothing that says you can't decline applicants who are poor with bad credit and don't have enough cash for a deposit. On the contrary, there are multiple blogs I get spammed with that stress the importance of income, credit, and cash for deposit.
This is a gross generalization. None of our S8 tenants are as you characterize them to be. Our S8 tenants are retired veterans on fixed income, retired seniors on fixed income, and people with qualified disabilities on fixed income. All have contributed to society in the past and some are still contributing in a positive way today. We respect them and they respect us. With any benefit system there will be some people who game the system in an unethical way, but please don't assume all S8 people do.
You need to spend more time down the housing authority listening to the indiscreet people in the waiting room. You also need to chat to the staff a bit more - they know what's happening. There is a massive 'entitlement' chip on the shoulders of some - we've actually watched S8 tenants shout at the HA staff!
I have no problems with people with real disabilities or needs, we're even recommending one tenant to get on the list at the moment, and as I said, we accepted two newly issued vouchers from existing tenants last year.
However, don't for a moment think that the HA is stuffed full of people needing real help.
And there is a very good reason to be extremely annoyed at the people who are faking it (as a lot seem to be), because it pushes back the people who do need help, and makes a waiting list that shouldn't need to exist, 2 years long.
I have spent time at our local Housing Authority. For several years I volunteered to teach classes with a "ready to rent" tenant education program there. My topics were "The Inquiry and Interview" and "How to Establish and Maintain Good Landlord-Tenant Relationships" and "Money Management Matters." I've met many recipients of the S8 program and HA case managers and other social service workers. There is a wide variety of people who seek subsidized housing for legitimate reasons. Some temporarily and some long term. Perhaps our housing authority uses more discretion in qualifying S8 recipients than yours, as my impression is quite a bit different than yours. I don't disagree that some people game the system and some people were raised with an entitlement mentality. My point was that it is not helpful to make generalizations.
It's great that you are a participating landlord, as the Section 8 Housing Choice Voucher Program needs good landlords who are willing to offer affordable housing in the privately owned rental housing sector. Not all landlords realize they have a say in the selection process as to whom they rent to when working with S8. Our market niche is low-income and fixed-income. We strive to provide safe, clean, affordable, comfortable and quite housing to responsible renters. Note the operative word "responsible." Not all S8 recipients would qualify to rent with us, but many do.
@David H. I have to confess, most of the time I do discriminate on color. If they don't have the "green" they don't get the unit!
@Account Closed
Previously in this long post I believe your mentioned that Maryland prohibits discrimination for source of income. They tried to pass a law to this effect in 2014, but failed. (HB1098)
They tried this in previous years, and no doubt will try it again. People need to actively work with their representatives to let them know their concerns.
i just to put it out there that its a new law here in Oregon that you can not deny a section 8 holder! Most of u are so heartless. It's a guarantee rent pay! What's so bad about that!?
There was a proposal to make it mandatory to take section 8 in Indiana as well but I don't think it went anywhere. I am actually not against housing subsidy. Nor do I think having a voucher automatically makes a bad tenant. The problem I have is the compulsion to deal with a govt bureaucracy. If the HA stayed out of my hair and simply paid some portion of the rent, I'd be fine with it. It may even be preferred. But to have to deal with their timeline, their inspections and their rules for eviction etc…no thanks. Its not a political statement. Its just a business decision. There are landlords who know how to manage the system and do quite well with Section 8. Just not something I want to deal with.
@Account Closed
Previously in this long post I believe your mentioned that Maryland prohibits discrimination for source of income. They tried to pass a law to this effect in 2014, but failed. (HB1098)
They tried this in previous years, and no doubt will try it again. People need to actively work with their representatives to let them know their concerns.
I think I probably got my info on MD from a list I read of states with prohibitions on source of income discrimination.. Even without state law, I think MD has case law on this. See Montgomery County v. Glenmont Hills Associates. Unless that was overturned by yet another appeal (a 3rd one), the courts found for the original plaintiffs (Sec8 applicant and the county). The courts rejected many arguments, including the one that landlords should be able to opt out of S8 based on the administrative burden imposed by HAs.
Check out this write-up I did on Section 8, I hope it's helpful to you. The shortest of short answers is no, you cannot be forced to accept a Section 8 voucher.
http://www.biggerpockets.com/blogs/6591/blog_posts/44172-section-8-explained
Wow, some wild ideas in this thread.
Forget state law, federal law, you can't discriminate on sources of funds BECAUSE they come from government sources, welfare. food stamps, Sec 8, grants for housing allowances, military housing` allowance, etc.
Then you get into allowable rents that may be paid under Sec 8, the household income is computed, with the voucher amount, the can't pay more than 33% of gross income (I believe it's still 33%).
The rent that can be charged is not effected, unless you have rental controls from other regulations.
If your rent is market rate and not under high rent area determinations for greater subsidies, a tenant is limited to their maximum rents based on their income, higher rents means they won't qualify even counting all subsidies they may be allowed.
You can't jack up the rent on an applicant because of receiving any assistance from any sources. It must be at or below the advertised rent, as you may agree.
Sec 8 is an opt in program nationally. A local administrator of Sec 8, not always a PHA, inspects the property, those requirements can be more stringent than local codes, you are not required to bring properties up to SEC 8 requirements as long as you are not having code violations, that's another matter.
Can local or state agencies require a landlord to accepts? YES! There are properties that have been renovated or built using government funding, even if you buy such a property, they may have deed restrictions for a certain period of time rather than just to the payoff of some government grant or loan being made. You should know of those instances before buying it anyway.
Sec 8 applicants are not being given a preference over others, these discrimination matters simply apply as to the source of the applicant's income, not what that income is or must be.
Further, just because an applicant receives assistance doesn't mean it is always qualifying income. If you know that a Sec 8 applicant is attending college, there are restrictions to students receiving Sec 8, usually not entitled if it is significant to income. That means the applicant may not be entitled to receive any or that same amount or they may lose the entitlement. Lenders and landlords then look to the expectation of income being the same over the period. If you have to count child support, and baby Johnny is 17 1/2, that applicant may only be entitled to that income for 6 more months.
Landlords can not require every adult occupant to qualify income wise, that falls under the definition of family and what constitutes a family unit, the family must qualify jointly, not severally. But, tenants may be liable severally for debts and obligations created.
Tough for a person to qualify for Sec 8 with a criminal record, depends, but drug convictions are an automatic rejection, It is possible that an applicant may have some minor offense, but if your qualifying standard for everyone is no convictions, you are not forced to accept that applicant just because they receive Sec. 8. You can have higher standards, you also have market influences to deal with and your standards must be consistent and fair.
There are really good Sec 8 and PHA tenants, not all are down and out trouble makers, that is where your experience and knowledge come into play, nothing says you must accept a Sec 8 tenant, it says they get the same chance to lease as everyone else....and that is if your property meets requirements too. The property requirement may not be an out if it is the same as code since you may have to meet code to lease it.
There are also exemptions from the discrimination laws, if you live on premises, religious or fraternal organization, non-profits, assisted living facilities as to health matters.
Remember too, states are free to set commerce, consumer law, business activities and attach strings to use government funds for the public good, not the welfare of a business operator......but we know they do that too....LOL :)
...
Then you get into allowable rents that may be paid under Sec 8, the household income is computed, with the voucher amount, the can't pay more than 33% of gross income (I believe it's still 33%).
...
A Section 8 tenant is REQUIRED to contribute 30% of income toward rent / housing, but may contribute no more than 40% of income toward rent / housing.
...
Then you get into allowable rents that may be paid under Sec 8, the household income is computed, with the voucher amount, the can't pay more than 33% of gross income (I believe it's still 33%).
...
A Section 8 tenant is REQUIRED to contribute 30% of income toward rent / housing, but may contribute no more than 40% of income toward rent / housing.
Thanks Steve, that's why I said I believe, it's changed. Makes since too as loans have gone up to 40% and with some even higher!
Key to underwriting lower incomes is the disposable income, can they really live in an area with what is left over? Most will buy food before rent, some other things, 60% of very little is even less. :)
@Amanda H.
No you do not have to accept Section 8. If pressed, just say your apartment is not Section 8 Compliant and that's it. (Not Section 8 compilant is very different from being illegal. e.g Not having wardrobes in all bedrooms already makes it non-compilant. That makes automatically mean that it is a bad house.)
This debate is no longer about facts.
We can clearly see we have one group, mainly consisting of liberals who believe you should follow the letter of the law and abide by what the state dictates is fair and equitable as government should be unquestioned legal and moral arbiter of what is best for society.
And we have another group mainly consisting of conservatives/libertarians who believe they should be free to make their own decisions on what they want to do with their own properties even if the government wants otherwise for a greater "social good."
No new objective information is being added to this discussion other than people dressing up their subjective political viewpoints as objective information .