Charge Housing Voucher/Section 8 Tenants More

[Victor Olowu]

Am I allowed to charge more for an apartment if the tenant is a voucher user versus regular tenants?  There is more work involved and a number of additional things you have to do to maintain a voucher tenant including additional inspections.  Can I charge more rent for this extra work, or would that be considered some kind of discrimination?  This is in the Chicago market, if it makes a difference. 

[Ned Carey]

Yes regarding federal laws fair housing laws, section 8 is not a protected class so you can discriminate against section 8 applicants. However some local jurisdictions have added a protected class from discrimination as "source of income." 

You will have to check with someone more knowledgeable than me to see if it applies in your area.

[Brie Schmidt]

@Ned Carey in Chicago Section 8 is a protected class!  

@Victor Olowu you can charge whatever rent you want.  But the section 8 program has a specific amount they will pay depending on location and bedroom size. 

[James DeRoest]

Originally posted by @Victor Olowu:

Am I allowed to charge more for an apartment if the tenant is a voucher user versus regular tenants?  There is more work involved and a number of additional things you have to do to maintain a voucher tenant including additional inspections.  Can I charge more rent for this extra work, or would that be considered some kind of discrimination?  This is in the Chicago market, if it makes a difference. 

 Doesn't matter if you can charge more, the housing office will determine what they pay you in most cases.

As for it costing you more to run a Section 8 property because of the inspection, if your unprepared property isn't within a couple of small fails on the checklist - you really need to consider what sort of landlord you are. If you can't pass an Section 8 inspection, or if the list of requirements seems daunting, you are a slumlord.

[Thomas S.]

If you don't have to rent to section 8 don't bother. It isn't worth the hassle and obviously they are bottom of the food chain when rating quality of tenants. The inspectors nit pick beyond what any regular tenant would require.

[Sue K.]

@Victor Olowu I think I get what you're looking at doing.  Renting to Section 8 tenants, if it means you can ask a higher rent?

At any rate, the info you need is the "payment standard" for the housing authority where your properties are.

The payment standard, as I understand it, is the top amount you can ask for rent.  For instance, here's the spreadsheet for the payment standards for all of the neighborhoods/zip codes in Cook County:

http://thehacc.org/wp-content/uploads/2015/07/Marc...

Here's the main housing authority website on the subject:

http://thehacc.org/hcv/rent-determination/

So, look at the spreadsheet, determine the code for where your property is, then go to the last page and see what the top rent amount is for the property.  

That's how I understand it.  But, you might want to call the housing authority up to be sure.

But, as far as your advertising goes, you can't advertise the rent for certain tenants to be one amount, and other tenants to be another amount, as it would open you up to discrimination complaints.

If you want Section 8 tenants, then advertise the rents based on the max you can get per the HA. You are still allowed to do as much screening as you would normally do, and ask for your full normal deposits. Section 8 tenants don't get help with their deposit. They have to come up with the full deposit money on their own. HUD does not regulate tenant screening (as long as it's not discriminatory) or deposits.

[Victor N.]

@Victor Olowu the short answer to your question is NO! you are not allowed to charge more for an apt if the tenant is a voucher user vs a regular tenant. 

Im a landlord who accepts section 8 and one of the forms in the contract with section 8 specifically refers to this issue where you are basically asked to confirm that you are not charging the section 8 tenant more than you would anyone else. If you are, the form asks for the reasons why you are requesting a higher rent.

Off course, this doesnt mean that the amount you are requesting will be approved because, as others have pointed out, the housing authority has the final word on how much they will pay. But, if you are experienced with section 8, there are ways to increase your chance to get the rate increase approved.

[Mark Ainley]

@Victor Olowu depending where you are at sometimes CHA pays more than market rent anyways.  You need to screen a CHA tenant just like you would a market tenant as well.  There is a wide range of CHA tenants as well.  We have the CHA tenants that have had no income for their entire life and they do nothing but sit home all day, bored, causing drama(We try to avoid these nowadays). We also have many more tenants that working full time jobs, going to school, and have aspirations of not being on the program forever.   This higher end CHA tenants want to do nothing more than blend in with the community especially if they are in an area filled with many more market tenants.   Every property has a rent range that a landlord an get and with a working CHA tenant or a tenant with higher income, which includes SSI, a landlord can get a higher dollar amount.  

One thing I was able to learn in last decade of renting to CHA is there is you must screen as they are a market tenant and offer some leniency on the financials side because that is structured for them to be able to get the owner paid.   The bigger the voucher for sure doesn't always mean better.  

[Victor Olowu]

Thanks for the insights, @Mark Ainley and @Victor N.

I understand the split between what the voucher program will pay and what the tenant is responsible for because I have a couple already, but they came with the building when I bought it.  This is the first time I would be placing one myself.  The plan is to screen them like I would any other tenant that wants to live in my building.

@Sue K. To clarify why I am asking about charging more: I am not a fulltime landlord, I have a fulltime job and do this when I am not working.  The inspector I got for the one Section 8 inspection I've had so far was very nit-picky on a lot of things that no tenants care about, which then means I have to take time away from my fulltime job to address these issues.  So I basically look at it like I have a product that I am selling to everyone, but then one person(voucher users) wants a customized version of that product, which is why I don't see why the extra effort needed can not be reflected in your rent price.

[James DeRoest]

The flip side of the time you'll spend on these nitpicking things as you say, is that most of your rent will be paid on the first of each month like clockwork.

[Sue K.]

@Victor Olowu Surely, you don't expect the government to make sense? :-)

[Dawn Anastasi]

I just went through my first County rent inspection and they are very picky! For example, the bathroom register was dented so I had to put in a new one.