Hi Peter - Here in Atlanta you cannot refuse any applicant the right to apply to live in your rental property, even if you aren't part of the Section 8 program. For my next rental I do not intend to go section 8. I have another that is Section 8 (which I love my guaranteed check on!). My plan for dealing with the issue that you are facing is that I have strict criteria that I am use when reviewing candidates. And of course you want to use the same criteria for everyone due to the Fair Housing Laws. But I give Section 8 applicants have a 1% chance of meeting my criteria because of my 3x the rent income requirement. Hopefully when you explain your criteria, they will understand. It is a tough situation all over, because affordable housing is in such demand. Thanks for trying to be considerate about your approach. Best of luck...Melissa
Hi Peter - Here in Atlanta you cannot refuse any applicant the right to apply to live in your rental property, even if you aren't part of the Section 8 program. For my next rental I do not intend to go section 8. I have another that is Section 8 (which I love my guaranteed check on!). My plan for dealing with the issue that you are facing is that I have strict criteria that I am use when reviewing candidates. And of course you want to use the same criteria for everyone due to the Fair Housing Laws. But I give Section 8 applicants have a 1% chance of meeting my criteria because of my 3x the rent income requirement. Hopefully when you explain your criteria, they will understand. It is a tough situation all over, because affordable housing is in such demand. Thanks for trying to be considerate about your approach. Best of luck...Melissa
Thanks Melissa. If I understand this correctly 3x rental income is I can charge $6000 for a section 8 tenant if ordinarily a regular tenant pays me $2000?
Thanks Melissa. If I understand this correctly 3x rental income is I can charge $6000 for a section 8 tenant if ordinarily a regular tenant pays me $2000?
Hi Peter, no the 3X means their household income needs to be at least 3* of the asking rent.
The general rule of thumb (banks use this too) is that you shouldn't be spending no more than 1/3 of your income on rent/mortgage payments. This leaves you 2/3 for other living expenses/savings. For example. If I have a residence that I am renting out for $2,000 a month or $24,000 a year the person should be making about $75,000 a year or more roughly. That is gross, so if you think about it, after taxes they aren't really going to come home with anything at the end of the year. That said, I would like to see at least an $85,000 to $100,000 income or more.
I believe that we, as landlords, have an obligation to not put anyone into a financially stressful situation for either party to include risk mitigation regardless if they are receiving government assistance or not. In my experience, the applicants I receive usually never show up or move forward with the application when it comes time for the $50 credit check they have to pay through the service I use.
Thank you very much. Just one more question I had am I required to have income and credit score requirements in the rental ad or I can just reject based on the application without being explicit about income and credit score in the ad.
Thanks Levi. Some prospective tenants first inquire and later reveal that they are section 8 , can we just ignore in this kind of situation?
Not legal advice, but there is nothing stopping you from dropping off the face of the planet as they say. Maybe a more qualified tenant came along, who knows, but an none response has no affect, while a response does.
Not responding to a member of a protected class due to membership in such class is discrimination.
There is not a single case, successful or otherwise, where someone has claimed discrimination and won, based on someone failing to get back to them in a timely fashion, or not at all. This thread itself is more discriminating frankly.
Under the Housing Act, there is no provision requiring a landlord to accept Section 8 vouchers. However, some state and local Fair Housing laws, such as Chicago's Fair Housing Ordinance, do prohibit discrimination based on source of income.
If your city or state prohibits this type of discrimination, you cannot reject all Section 8 applicants outright.
If you have multiple applicants, or are waiting for additional applicants, you are well within your right to not respond to anyone until all applicants have been submitted, and you have chosen the applicant that is most qualified, because there is no law that say you must call, or otherwise, anyone back, ever.
Thank you very much. Just one more question I had am I required to have income and credit score requirements in the rental ad or I can just reject based on the application without being explicit about income and credit score in the ad.
I don’t put any income requirements on my ads. I just describe the property as all the other rentals are. You can always mention that there is a credit check. Tenants expect it.
"Section 8 vouchers are supposed to help the poor reach better neighborhoods. ... Under Texas law, landlords cannot be punished for discriminating against families with federal housing vouchers. The impact is clear in Houston, where one in four families who receive housing assistance never gets to use it..."
"New Jersey law prohibits discrimination in housing based on the source of lawful income that a tenant would use to pay rent. Landlords and property managers cannot refuse to rent units to potential tenants because they would pay with a Section 8 housing voucher or other public assistance..."
@Peter Morgan know your requirements under state law.
@Joe Martella Good point. Another good reason not to invest in Jersey. @Peter Morgan It looks like there is a bill heading to your governor to repeal the current law in some cities https://www.desmoinesregister.com/story/news/politics/2021/03/17/iowa-legislature-passes-bill-letting-landlords-refuse-accept-section-8-housing-kim-reynolds/4706645001/
@Joe Martella Good point. Another good reason not to invest in Jersey. @Peter Morgan It looks like there is a bill heading to your governor to repeal the current law in some cities https://www.desmoinesregister....
You are so right about investing in NJ. Then again, there is the United States and then there is Texas........
I just finished some of the required continued education classes for Realtors in NJ.
Though good intentioned one of the big issues I have with this site is that so many people post "in my state/area, we do this".
ALWAYS, always check YOUR state laws, the other do not matter.
As stated above, it is not allowed to discriminate on the basis of source of income. The " the home is not approved for the Section 8 program" phrase was specifically mentioned in the course as not being ok.
I just checked my local allowance for section 8 in my county. Google: "2021 small area fmr (add your County)". This shows by zip code the rates the program pays. I also confirmed that, for arguments sake a 2000.00 rent is actually 1700.00 as there is a utility allowance that is not stated in the site referenced. [the utility rate I show was for illustration purposes only]
"Section 8 vouchers are supposed to help the poor reach better neighborhoods. ... Under Texas law, landlords cannot be punished for discriminating against families with federal housing vouchers. The impact is clear in Houston, where one in four families who receive housing assistance never gets to use it..."
"New Jersey law prohibits discrimination in housing based on the source of lawful income that a tenant would use to pay rent. Landlords and property managers cannot refuse to rent units to potential tenants because they would pay with a Section 8 housing voucher or other public assistance..."
@Peter Morgan know your requirements under state law.
Thank God I invest in Houston...
I tried to deal with section 8 back in the day but it was a pain. I had to fill out packets (that I don't have to do for a non section 8 tenant). I had to allow the government to inspect my unit to see if it was 'worthy' (if it's acceptable to the TEANT that's what should matter. Not if it's acceptable to the state). I had to supply all sorts of personal info so they could 1099 me (something a non section 8 tenant doesn't do. And just creates extra tax work as my management software already records the tenant income as income. I don't need individual 1099's from all over the place due to people having their rent paid)
So it wasn't so much the 'section 8 tenants' as much as it was the 'section 8 process'. If the government really wants to help, they should make the process for the LL easier... Almost all my tenants pay online. We do digital leases. Everything is automated and electronic. Dealing with the government as a tenant breaks all that.
I always tell them the house has not been section 8 approved. As I do not partner with uninterested (and potentially punitive) othet parties, I do not have my houses inspected so can not be section 8.
I always include the requirements in my ad. I list 3 times rent as well as good credit. I do not list an actual minimum score, but am considering for future.
You can't discriminate based on source of income, but there is no law that says you have to respond at all.
Actually in most places you can deny applicants based on source of income, including Section 8. It is only considered discrimination if that group is a protected class. Generally discrimination is viewed as being judged for things outside a persons control, meaning you were born that way. Some localities have included source of income, but Section 8 is only a portion of income. For example, if you require 3X rent for income and someone has a $1500 voucher for $1500 rent, their other income needs to be $3000 per month.
Iowa has no state level ban, but Des Moines, Iowa City and Marion currently have "source-of-income" discrimination bans. There appears to be a state level effort to prevent cities and counties from enacting these bans. The Iowa state legislature passed a bill in March 2021 (Senate file 252) that prohibits localities from regulating based on source-of-income. The bill has a two year grace period for existing bans. I believe the bill is still awaiting signature by the governor.
As far as "not responding" that would be considered discrimination if they are a protected class. In fact most discrimination is a situation where applicants are ignored.
The answer for the original poster is really simple. Follow the local law. If city, county, state or federal law considers it discrimination to deny based on the criteria, you need to give fair consideration to the applicant. If the applicant meets all other application criteria, there is no reason to deny them.
If law allows you to deny based on Section 8, simply tell the applicant politely, "we do not accept section 8".
Landlords need to have firm acceptance criteria that includes only legal screening criteria. When you have 3X rent income requirement and minimum credit score requirements, it can be hard for a Section 8 person to qualify.