Sec 8 rent thousand dollars below voucher standard

7 Replies

I recently bought a triplex in Oakland, and inherited a sec 8 tenant. The rent this tenant is paying is far below the voucher standard. The voucher standard itself is a little bit over the rents for the neighborhood. What is the best approach to bring the rent this tenant is paying more into line with the market rents?  

Provide the HA with comps in the neighborhood and ask for an increase? I am not sure this strategy will work as the rent is nearly a thousand dollars below the voucher standard.

Improve the features in the apartment such as access to garage, newer kitchen cabinets, floors etc.? and ask for a rent increase based on the improvements to the apartment?  

Help the tenant move to a different place and bring the unit to market rents? 

So far, my dealings with the HA have been far from smooth. For instance, they still have not processed the transfer of ownership nearly two months after I sent the required documents. They havent paid me the rent for December. In theory, the HA is supposed to pay market rents, but I am not sure how this policy works in reality. If someone has any experience dealing with the Oakland HA, can you please advise?  

Thank you!

“Voucher standard” means nothing in Oakland. The amounts you are seeing on the voucher amount website are the OHA max rent amounts. They will pay close to the max in the best neighborhoods like Adams Point and Lake Merritt. Expect to see less for East Oakland. 

You can ask for an increase but they will go by what the neighborhood is currently paying. They usually use comps from GoSection8. Start there and print out comps and include in your rent increase request. 

I’ve had them increase an inherited tenant by over $500/month, so it’s possible. 

In the South Bay (Santa Clara HA) I increased almost 100% in one go-round.   Just follow the HA process.  It will require a letter to tenant about increase.  It will require a new lease.  Tenant could likely see having to pick up a portion of it.  Mine saw about a 25% increase (~$100/mo).   The Tenant/HA will have a conversation about it.   Like @Saj S. said, you need to look at market rent in your area and that is what you target in combination with the voucher maxes.

As far as booting up the HA after your first purchase, yes it can be a bit choppy for first 60-90d, but once it is all sorted out the payments just arrive like clockwork.

Originally posted by @Saj S. :

“Voucher standard” means nothing in Oakland. The amounts you are seeing on the voucher amount website are the OHA max rent amounts. They will pay close to the max in the best neighborhoods like Adams Point and Lake Merritt. Expect to see less for East Oakland. 

You can ask for an increase but they will go by what the neighborhood is currently paying. They usually use comps from GoSection8. Start there and print out comps and include in your rent increase request. 

I’ve had them increase an inherited tenant by over $500/month, so it’s possible. 

Thanks Saj! the rents in the neighborhood are lower than the standard, but only by two or three hundred dollars. What did you include in your application where you were able to get that increase? I will check out gosection8. Thanks again!

Originally posted by @David Putnam :

In the South Bay (Santa Clara HA) I increased almost 100% in one go-round.   Just follow the HA process.  It will require a letter to tenant about increase.  It will require a new lease.  Tenant could likely see having to pick up a portion of it.  Mine saw about a 25% increase (~$100/mo).   The Tenant/HA will have a conversation about it.   Like @Saj S. said, you need to look at market rent in your area and that is what you target in combination with the voucher maxes.

As far as booting up the HA after your first purchase, yes it can be a bit choppy for first 60-90d, but once it is all sorted out the payments just arrive like clockwork.

Thanks David! How do I get the comps off of gosection8.com? do they look at listings or what has actually been rented at that price?

I would use Zillow or some other rental listing app that shows your neighborhood on a map with other rental listings.   I don't believe Craigslist has a map.   That is how I do it.
 

For example if your current rent is $1500, and you look on the Zillow map and others around are "for rent" at $2100, and the HA pays up to $2400 -- then I would say you can secure $2100 fairly confidently with the HA's approval.  Above $2100 and you push the ceiling...which isn't bad either, but as you are learning the more go-rounds you have with the HA, the longer it takes.      

Going over the property records again, I think this is what happened. When the last landlord signed the lease, the tenant had a two bedroom voucher, while the unit had 3 bedrooms. At this time, the voucher payment standards in Oakland were also lower. Her voucher changed to a three bedroom some time in between, while the voucher payment standards were also increased in 2016. The last landlord asked for 5% increases and ended up with a rent that is nearly a thousand dollars below market. I recently rented a one bedroom in the same unit for almost the same price that the sec8 unit is getting me. The only question is, how do I justify my rent increase request when the time comes for that.

@sudeep jain     As another poster said...Sect 8 will pay according to the neighborhood....not what is on their website which is the max.  You can do all the improvements you want but the neighborhood is the neighborhood. Try gradually raising the rent.   

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