Why are you refusing section 8 vouchers?

182 Replies

I’ve just finished reading “The Color of Law” which is an eye opening look in to government sponsored segregation through housing policy. With section 8 being an actionable step in the right direction, why are some landlords refusing it? The inspections I’ve experienced look for things I’d demand for my family. The allowance for rent meets or sometimes exceeds market rent in my area.  The tenants are often more qualified than market tenants. They often have incomes 6-8x their portion of the rent vs the 3x I typically require. Aside from places where vouchers don’t match market rent, why aren’t you taking section 8 tenants?

1. They don't pay market rent in either of my rental markets

2. The local Housing Authority in my Erie, PA market is run by morons

they beat the crap out of your houses.. baby daddys move in.. they move often.. those are a few things.

(1) Inspectors have to justify their job.  So, they will always find something.  One time, we showed them a recently renovated unit.  They literally did not find a single thing wrong with the unit.  But they dinged us on peeling paint on the wooden post as divider for the garden area.  Remediation for that was easy enough.  We just painted over it.  But the point remains.  You can give them a perfect unit and they will still find something wrong with it.

(2) Section 8 tenants are lazy and demanding.  They will literally demand that you come out to press the reset button on the gfi.  

(3) No accountability at all.  Every section 8 tenant I have ever had ended up trashing the place.  They also live in filthy conditions.  

Sorry, will never do section 8 ever again.  Too much of a headache dealing with this segment of the tenant pool.

Edit.

Section 8 tenants are kings and queens of the learned helplessness examples.  They never ever want to improve their lives.  The tragic thing is they pass this learned helplessness onto their children.  It's sad to watch them not able to do the simplest things.  They don't even have the common sense for the simplest things.  


For example, one time they poured grease down the drain and clogged it.  They told us the kitchen sink was clogged.  When I got there, the kitchen was semi-flooded.  Why?  Because they continued to use the sink anyway and it was overflowing onto the kitchen floor.  Honestly, do you really want to deal with people like this?  I was going to say they are dumber than rocks but I'm sure social justice warriors on here will kill me over it.  But how would you describe people who continue to use the kitchen sink that was clogged even though it was flooding the kitchen floor?

Honestly it sounds like the poster is trying to start some kind of political argument. Section 8 has it's positives and negatives, any real estate investor should be aware of this already, acting like it's all roses is a bit ridiculous.

The housing choice voucher program doesn't pay market here because they don't pay extra for things like remodeled kitchens and baths, garages, AC, washer/dryer hookups -- things tenants like and are willing to pay extra for. The hud standard payment for fair market rent (FMR) on a one-bedroom in my lowest income zip, including utilities is $659. My understanding is that the most rent that can be used for calculation of the HUD payment amount is 110% of this hud standard payment. I believe the tenant can pay more (on negotiated lease amount) so long as the tenant isn't rent burdened (paying more than 40% of income). In this zip code I get 650.00 plus all utilities (gas, electric, water/sewer/trash) paid by tenant. It is high for that zip code but my units have unusually nice ammenities (especially for the money)

 I was thinking about trying it in light of all the recent eviction moratoriums but then we didn't have any move outs for a long time until end of Feb. I'm not really refusing them but after I looked into it and read about the rules, I don't think they will pay me enough. https://www.akronhousing.org/p...https://www.hud.gov/sites/dfil... I don't want to mess around for 30 days going the hud rental process only to find out they don't pay enough after losing a month's rent. These will rent quick.

@Lam N.   my classic was the tenant complaining of mold around the windows.. go and check it out and they have

and they have ruined the blinds and put up foil and plastic and so you had all this moisture  and when the mold started they were scrubbing it and ended up ruining the sheet rock try to rub the mold out..  

All I can say is look at homes that are bought by rehabbers and the condition those are in.. those are what your section 8 tenants will end up doing to your house over time.. Now again NOT all but enough to get you pretty jaded on it.

if you live and work in the area and are totally hands on constantly you can make it work though. but its anything but passive.

@Jay Hinrichs :

I've done this long enough to have had all kinds of tenants.  Here's my observation.

The more educated/intelligent the tenants are the easier they are to deal with.  For example, I have a paramedic as a tenant.  Last time the motion sensor light went out in the backyard he told me about it and promptly went out bought another one and installed it himself. He's actually a pretty handy guy.  

Another one is a college educated banker and his wife is in IT.  They actually take care of the property really really well.  Even though they have 5 cats you would never know that they have 5 cats because they keep the place spotless clean.

On the other hand, one of my tenants is a family I inherited from the previous landlord I bought the property from.  I keep them around beause they are nice people.  But god damn they are lazy as hell and dumber than rocks.  The whole family is on disability.  And by golly, they complain about everything.  One time they wanted me to come all the way out to tighten a loose screw.  My more educated tenants would have tighten the screw themselves.

Section 8 people tend to be difficult to deal with because they are at the bottom of the barrel.  We are talking about people who are perpetually poor and they keep themselves that way.  They keep themselves helpless.  Hence, they don't want to know anything and they don't make any effort to better themselves.  

Honest to god, I am not making this up.  One time I had a section 8 family complain to me that they got ants. They have tried raid and everything else but the ants kept coming back.  So, I dropped by to see what was going on and the first thing I noticed was their kitchen was a mess.  Food everywhere on the countertop and sugar crystals from soft drinks everywhere.  I had to explain to this family that if you leave food out it will attract ants.  They honest to god did not know this.  After they followed my advice, the ants went away.  

Again, I swear I am not making this up.  

My point to those reading this is sure go ahead and go with section 8.  But be prepared to deal with people dumber than rocks.  They wouldn't be on section 8 if they were any better than that.  Most of the time, they can't even help it.  They are literally that difficult to deal with.  

Also, this is something my parents taught me.  It is human nature to not value things that are free or discounted.  Section 8 (along with food stamps and other types of welfare) is literally the definition of free and/or discounted stuff.  Take this to its logical conclusion.

Nowadays, I veer more toward college educated young couples.  They are pleasant to deal with and they always pay on time.  They are hard working and ambitious.  No more section 8 for me.  

Originally posted by @James Elden :

Honestly it sounds like the poster is trying to start some kind of political argument. Section 8 has it's positives and negatives, any real estate investor should be aware of this already, acting like it's all roses is a bit ridiculous. 

This has nothing to do with starting a political debate. It has to do with starting a discussion. I feel certain that, much like myself, many of you aren’t aware of all the previous injustices done in housing. Anyone who knows me would expect me to make all the same statements seen in other comments. After reading this book, I’ve come to realize that the problems are greater than I had imagined. It goes far beyond calling someone lazy and assuming they could easily do better. I realize in the context of a forum it’s hard to fully understand, but if you knew me you’d know that I am absolutely an advocate for working hard and helping yourself over handouts. I simply think there is a case for public assistance far greater than what I had previously believed. You’re welcome to disagree and I’m most certainly NOT here for a political debate. Regardless of your thoughts on section 8, I’d encourage you to check out that book. It was eye opening to say the least. 

Unlike 98% of people, we actually read Loan Documents, Contracts & so on. We want to know what we are being required to do and follow. Here are just a few items in the Housing Assistance Payments Contract that keeps us from accepting section 8

1. The owner must give the PHA any information on rents charged by owner for other unit.

2. PHA shall not be obligated to pay any late payment if HUD determines that late payment by PHA is beyond the PHA's control.

3. HUD shall have full & free access to contract unit, premises, & all accounts & other records of the owner that are relevant to HAP Contract.

4. The owner must grant such access to computerized or other electronic records & to any computers, facilities & must provide any information or assistance needed to access the records.

5. PHA failure to pay the owner is not a violation of the lease. The owner may not terminate the tenancy for nonpayment.

6. Must give 90 days notice to vacate

As you can see there are a number of reason not to take section 8. We will not allow them full access to any of our computers, smart phones, office and so on. Read the contract before you jump on the Section 8 band wagon and know what you are really getting yourself into.

@James York

My negative experience with section 8 was more with the housing authority itself. I was the evil capitalist landlord, and they were the poor, subjugated tenants. It felt like the relationship between a business, and a labor union. They were there to protect them from me. The tenants could do no wrong, and I couldn’t hold them accountable for anything. This was in the Seattle area. I’m sure it’s different in other parts of the country.

Originally posted by @James York :
This has nothing to do with starting a political debate. It has to do with starting a discussion. I feel certain that, much like myself, many of you aren’t aware of all the previous injustices done in housing. Anyone who knows me would expect me to make all the same statements seen in other comments. After reading this book, I’ve come to realize that the problems are greater than I had imagined. It goes far beyond calling someone lazy and assuming they could easily do better. I realize in the context of a forum it’s hard to fully understand, but if you knew me you’d know that I am absolutely an advocate for working hard and helping yourself over handouts. I simply think there is a case for public assistance far greater than what I had previously believed. You’re welcome to disagree and I’m most certainly NOT here for a political debate. Regardless of your thoughts on section 8, I’d encourage you to check out that book. It was eye opening to say the least. 

I don't accept Section 8 for the reasons others have cited: bottom-of-the-barrel tenants, tend to violate lease at a higher rate than other tenants in the same price range, irresponsible, yadda-yadda. At least 80% of them left their places trashed and cost the owner money.

I haven't read the book but I would be careful about taking one source as the final word on the subject. Let me ask you this: if someone discriminates against me, how does discounted housing for my son or grandson right the wrong? I think government tries to fix problems by throwing money at it (in this case, discounted/free housing) and it's unlikely to work.

 

@Jonathan Hulen that’s very interesting. I’ve actually had the opposite experience here. I recently had an applicant I wanted to approve but was having some concerns with. The housing office realized my concerns and recommended that this may not be the right match. They’re not easy to communicate with, but when I can reach someone they’re actually quite supportive. I appreciate your input!

I like having a few tenants that hold section 8 vouchers. I market my properties at market rents and I put all the applicants to the screening process. If a section 8 tenant happens to be the best applicant then they get the unit. I have had some really good experience with section 8 tenants. I had one bad experience with a section 8 tenant but that was my fault. I never should have moved her in.

I have had some really good section 8 tenants. Example, working mom that put her self through college, a Vietnam vet that was the most clean and organized tenant I have ever had, another one actually priced her self out of the program because she started making too much money at her job.

You have to treat them like any other tenant credit check, back ground check  and employment verification. This information builds a story on how responsible they are and gives you an idea of their past rental history. 

I feel that the people with bad experiences do not properly screen their tenants. There's definitely a trick to making it work. Remember, anyone can qualify for section 8 but that doesn't automatically qualify them for your property.

Originally posted by @James York :

I’ve just finished reading “The Color of Law” which is an eye opening look in to government sponsored segregation through housing policy. With section 8 being an actionable step in the right direction, why are some landlords refusing it? The inspections I’ve experienced look for things I’d demand for my family. The allowance for rent meets or sometimes exceeds market rent in my area.  The tenants are often more qualified than market tenants. They often have incomes 6-8x their portion of the rent vs the 3x I typically require. Aside from places where vouchers don’t match market rent, why aren’t you taking section 8 tenants?

Have you done much reading on these forums of hundreds, probably thousands of posts regarding this issue? Whether or not to accept section 8 is a personal decision in most places. For us, we determine our own criteria and contracts, rental rates, etc. and don't wish to partner with additional entities. We have no problem filling our properties with tenants that don't have vouchers and can avoid the additional delays and hassles that the section 8 process brings with it. Some landlords think section 8 is an amazing program and focus on that model and others have tried it and are in the "never again" camp. We choose to not utilize it. But hey, have at it.

 

@James York I read the book a few months ago and completely agree with your sentiment. To think that an entire group of people were explicitly excluded by the government from one of the largest housing booms in our history (post-WWII) due to the color of their skin is mind boggling.

Maybe Section 8 isn’t the right answer- it might be building more government housing (as they have in the UK) or something else. I for one own mobile home parks and find they are a great way to offer home ownership to people that otherwise may rely on a Section 8 voucher.

Bottom line, I think there is (clearly) a lot of hate being thrown at people with Section 8 vouchers without much consideration for historical problems or discussion of ways to help solve the problem. 

A rising tide lifts all boats and helping marginalized people and communities get out of poverty (through government programs, investment in education, etc) in the end helps everyone. Anyways, end of my rant, I’ll await the backlash about how I’m a socialist.


Originally posted by @Nathan G. :
Originally posted by @James York:
This has nothing to do with starting a political debate. It has to do with starting a discussion. I feel certain that, much like myself, many of you aren’t aware of all the previous injustices done in housing. Anyone who knows me would expect me to make all the same statements seen in other comments. After reading this book, I’ve come to realize that the problems are greater than I had imagined. It goes far beyond calling someone lazy and assuming they could easily do better. I realize in the context of a forum it’s hard to fully understand, but if you knew me you’d know that I am absolutely an advocate for working hard and helping yourself over handouts. I simply think there is a case for public assistance far greater than what I had previously believed. You’re welcome to disagree and I’m most certainly NOT here for a political debate. Regardless of your thoughts on section 8, I’d encourage you to check out that book. It was eye opening to say the least. 

I don't accept Section 8 for the reasons others have cited: bottom-of-the-barrel tenants, tend to violate lease at a higher rate than other tenants in the same price range, irresponsible, yadda-yadda. At least 80% of them left their places trashed and cost the owner money.

I haven't read the book but I would be careful about taking one source as the final word on the subject. Let me ask you this: if someone discriminates against me, how does discounted housing for my son or grandson right the wrong? I think government tries to fix problems by throwing money at it (in this case, discounted/free housing) and it's unlikely to work.

 

Like most things this tends to be quite regional.. in many markets if your in the C/D class your going to have to deal with Section 8. And even with all its short comings many times is a better move to get most of your rent than  3 months of rent per year then an eviction and costly turn over.   I can only fall back on my personal experience and this was in the mid west/deep south we owned over 200 sfr's that were on Section 8.. I would say 90% or better of the tenants were female head of household with baby daddys bouncing in and out.  And its just a fact these young women have kids out of wedlock at early age ,  baby daddy not responsible at all and their life is going to be what it is with very little chance of a major change. Does not make them bad people but it keeps them many times from proper education and higher education very rare.  So as a landlord with you have a single mother head of household with 2 to 6 kids many times with different fathers .. those households are just very tough on the house.. I dont have the answer but if there is one I think having kids while a single female in the US at a young age when they have no employment opportunities above basically a minimum wage service job is a pretty tough life.  And then it becomes systemic poverty or just above the poverty level. In the bigger cities of course they try to address this with massive apartment complex's that are all subsidized and I dont know what they call them in other places but in SF and Oakland they are called Projects.. And they do become little mini war zones.. Now in SF they are tearing them down. The one OJ Simpson grew up in (SF) was on Protero hill thats now high end condos .

City of Seattle has been hammered by protest and now some of the downtown apartment developers are being forced by market conditions to sell out to the City / state at huge loss's and those are going to become public housing.

 

Originally posted by @Will Stewart :

@James York I read the book a few months ago and completely agree with your sentiment. To think that an entire group of people were explicitly excluded by the government from one of the largest housing booms in our history (post-WWII) due to the color of their skin is mind boggling.

Maybe Section 8 isn’t the right answer- it might be building more government housing (as they have in the UK) or something else. I for one own mobile home parks and find they are a great way to offer home ownership to people that otherwise may rely on a Section 8 voucher.

Bottom line, I think there is (clearly) a lot of hate being thrown at people with Section 8 vouchers without much consideration for historical problems or discussion of ways to help solve the problem. 

A rising tide lifts all boats and helping marginalized people and communities get out of poverty (through government programs, investment in education, etc) in the end helps everyone. Anyways, end of my rant, I’ll await the backlash about how I’m a socialist.

Do keep in mind if you read CCR's from the early century through about 1930.. there were many many different groups of people precluded by the CCR's from buying property not only those of color.. Its quite amazing to read those old documents..

Different cultures have different ways of living their lives.. you dont see a lot of other cultures ( at least here on the West coast were we are a melting pot) that have children before they are married.. And they have very strong parental guidance to the point of overbearing I guess you would say..  :)  

 

Here in NJ it is illegal to deny someone based on Section 8 (or any other program). Every so often you will see an article in the paper about it happening. Up until about a year ago I would field inquiries from prospective tenants whether we accepted Section 8. I believe that the majority of these were watchdog groups or other enforcement agencies. The one or 2 that were not were extraordinarily flakey and never completed the initial intake process.

Out of curiosity I just checked my locations fair market rent which the voucher is based on and my rents are far beyond those listed.

Originally posted by @James York :

I’ve just finished reading “The Color of Law” which is an eye opening look in to government sponsored segregation through housing policy. With section 8 being an actionable step in the right direction, why are some landlords refusing it? The inspections I’ve experienced look for things I’d demand for my family. The allowance for rent meets or sometimes exceeds market rent in my area.  The tenants are often more qualified than market tenants. They often have incomes 6-8x their portion of the rent vs the 3x I typically require. Aside from places where vouchers don’t match market rent, why aren’t you taking section 8 tenants?

 You may be misunderstanding the purpose of the 3X rent rule. The point is that housing should be 1/3 of income because the other 2/3 of your income is needed for utilities, phone, transportation, food, clothing, entertainment and other expenses. A voucher is part of your income, it doesn't reduce the income requirement. Let's say rent is $1500 and a voucher is $1400. You are saying someone may make 6-8X their portion of rent, so in this example that would be $600 to $800 a month. That is not enough money to cover the expenses I mentioned.

Compare that to 3X rent and it would be $3100 ($4500-$1400 voucher). That includes all income sources, so other assistance like utility or food programs. Some may still argue that 3X is too high with section 8, so maybe you reduce it to 2.5X or 2X. Just make sure there is enough money to cover all household expenses. 

Section 8 covers a wide variety of people. Even if you take section 8, you need to heavily screen tenants. There are a lot of irresponsible people in section 8 programs. Successful landlord isn't just about collecting rent. You also need to minimize wear and damage, to keep expenses low. 

@James York

Every time  I see a post like this, I say a secret prayer to the land lording fairy, that the poster gets a a real, hands on experience, to understand-- why others might be against it.    It's about understanding-- both sides. I say this, as  I am experiencing the downside of renting to a charity program like section 8, and the houses are TRASHED.  Double security deposit helped and rent got paid from the charity, but  trashed is an understatement to how badly these people abused our houses. 

1) In VA, when a section 8 tenant moves, they have to give 60-days notice to their current landlord, so as an example-- i have a move in ready place now, so if a section 8 comes to me, and wants to move in May 8th, you think I'm going to pick to miss out on 2 months rent?

2) Another reason I don't like it-- year leases.  You're locked down, it feels like rental jail.  I  LOVE M2M, as long as everything is good... it's  kind of like a forever lease IMO.    It keeps it like dating and as long as both are happy-- awesome, stay forever!  1 year can feel like eternity with a bad tenant!


I  have 1 section 8 tenant, really great older lady, love her.. but I also had another section 8 tenant,  that made me swear I'd never do the program again--  HORRIBLE experience, super stressful, high maintenance tenant-- she literately asked my maintenance guy if he thought she could sue us (ps. we did everything right).  It's all about the person, program is just how you get paid.

@James York      Different people will always have different views about this and there's the saying that

"A man convinced against his will, is of the same opinion still."

My experience initially with Section 8 in Cleveland was very negative because of the inspectors. No standardization, being very unorganized, etc.  I call it short term pain for long term gain. Deal with some red tape, unorganization and nonsense up front.....to know that you will have a tenant that (in my experience) will stay longer on average than many cash tenants and most (if not all) of your rent money is guaranteed. 

Luckily I had also dealt with Housing Authorities in Alameda County and Contra Costa County here in the Bay Area so I knew NOT to expect to pass the inspection the first or even second time. I also know that when you screen the tenants properly that makes a world of difference. I personally screened the Section 8 tenants in all of my rentals, including the ones in Cleveland. Many of my colleagues have asked why am I personally screening them when I have a PM that should be doing this. My answer is simple. Nobody will care about your property as much as you. After I screen them, then I turn it over to my PMs to actually work with the housing authority to sign the packet, place the tenant, etc. 

 Nobody can guarantee a perfect tenant, cash or Section 8. But I sure sleep well at night....especially this past year knowing that none of my Section 8 tenants went on a "rent strike". In fact a few of them lost their jobs....and the Housing Authorities simply started covering their entire rent.