All Forum Posts by: Bradley Bogdan

Does the person selling the car wash drive a Pontiac Aztec? If so, the numbers may be more manipulated than you think... :-P

Yes, absolutely! 

@Alan Russell They are always making 3x of the portion of rent and utilities they are responsible for. In your example, they are responsible for $300 in rent, they have an income of $900, therefore they are above the same threshold you're using for other, non-voucher tenants. The government doesn't feel compelled to guarantee 3x their portion of the rent because they're the gov't and are, in theory, never not going to pay. 

Going with a 3x the rent rule regardless of voucher will eliminate just about any voucher holder, effectively banning Section 8, even if you don't explicitly state such. If someone making $1797/mo for your $600, they will be responsible for $599 of rent and the voucher will cover $1. 1797+1=1798 means that they don't equal your minimum income of $1800/mo. Now, the math is a touch more complicated with utility calculations for any given area, but that's the gist. If you read the law review I linked earlier in the thread, there are areas who have hashed this exact question out in court.  

@Tamar Mar If you have no interest in participating in the program, there are legal ways to reduce/eliminate the likelihood that you'll have an applicant that qualifies with a voucher. 

1. Raise your rent above the FMR value for your area: This will eliminate any chance your rental will have a Section 8 applicant.

2. Impose stringent credit or/and past rental reference requirements: This will eliminate much of the Section 8 pool, but not all. Frankly, if someone has these requirements but has a voucher, you should strongly consider renting to them anyway. 

3. Charge a high (legal) security deposit: Much of the low income community can't afford high deposits. A high deposit will allow you greater security in terms of protecting yourself, as well as screening out a large portion of the Section 8 pool. 

The downsides to avoiding Section 8 in an area where you can't legally discriminate against it are you're shrinking your pool of possible non-Section 8 renters as well. Remember, the program exists to ensure folks with low income can afford rent. That doesn't mean that those folks are bad renters (or people), or that the local Housing Authority is poor to work with. If you screen well for legal factors (no evictions, good references, good credit, etc.) you should run about the same chance of finding a good tenant in the program as you would one that isn't. Hopefully someone local to you can comment on your local Housing Authority's ease (or not) to work with. 

@Heather W. I personally don't think someone should be compelled to ensure that a rental passes inspection (and that doesn't seem to have been a legal issue from what I've read), however in most cases, I would hope everyone here would live up to the fairly low bar Section 8 inspections usually impose. I know there are horror stories of finicky inspectors or odd property features that don't lend themselves to passing, but those are the exceptions, not the rule. I'd say we could do away with the inspections altogether, but I still have 2 landlords I work with that insist that their tenants don't need the heaters that they were required to provide and should just use the stove/oven for heat like they do. 

@Account Closed brings up an excellent point, none of these income discrimination laws compels you to rent your units to Section 8 tenants. You're still allowed to screen for every factor you were before, you're still allowed to set whatever price you chose for your rental, and you can always ensure your units won't pass inspection (though that still seems backwards to me). This isn't rent control like SF and NYC have. Instead of capping a free market like rent control, you're ensuring equal access to a free market, the entire point of a free capitalist economy.  

Finally, as Heather said, a rule like this is about as enforceable as any other FHA provision against discrimination. As I've said before, I run into A LOT of landlords and property managers that do things that, by the letter of the law, are clearly discriminatory. Unfortunately, lower income tenants don't usually have access to legal services, and even if they do, there is little proof of discrimination to make a complaint on when the landlord simply tells you they won't take your application for X,Y or Z reason, or that you wont fit in, etc. About all they can do is click the "prohibited" button on craigslist ads that say things like "looking for quiet younger tenants" "not a good fit for families with kids" "Must be employed, no welfare queens" Rules won't completely solve discrimination, but at least it will send a message that its not acceptable or legal.

@Dan Perrott I'm not sure your 3x income requirement will get you out of renting to Section 8 tenants. As I linked earlier, some states/localities with income discrimination laws like New Jersey have found that that isn't a valid criteria to apply to a voucher holder. I'm sure if this particular law passes, someone in Indy will challenge it in court and get a firm answer. 

As for choosing who you would like to rent to, do you believe that the current fair housing laws go too far? Should we as landlords be allowed to not rent to certain races, religions, ages, etc? Do we as landlords have a responsibility to provide housing to our community on a fair and equitable basis, regardless of if we approve of the life details of who apply? If its not ok to deny housing to a particular race "because they're more likely to be involved with crime/be evicted/become unemployed", why should we have the right to say we wont provide housing to low income folks who have a gov't subsidy to pay rent at the industry standard rate "because they're more likely to be involved in crime/be evicted/become unemployed"? Its uncomfortable to remember that the reason the FHA was passed in the first place was that these kinds of discrimination were common, and property owners almost always had a good explanation as to why.

I know I'm soapboxing a bit on this topic, so I apologize, but it frustrates me on a daily basis to see folks discriminated against in my day job. I've had landlords tell me that they won't consider one of my client's child support as part of her income because its "not real income" and refuse to take an application. I've had landlords tell me they don't think clients will "fit" at a particular rental due to veteran status, age, the fact they are a single parent, have a documented disability, have a voucher and race. Sometimes its subtle, sometimes its not, but in all cases, there is a moral judgement against these tenants that they are less worthy of housing. I entirely agree that we should have expansive rights when it comes to operating our properties, for instance I think many areas have some ridiculous hurdles to clear to evict someone who's violating the lease or not paying rent, but I disagree that we should have the right to deny housing based on moral grounds. If they take away a right that we shouldn't have had to begin with, are they really taking anything away?

 Not to pick on you Brie, but that's exactly the policy most of the income discrimination laws are seeing to avoid. In the various state/local law review I linked earlier, the majority (but not all) of state courts cited interpreted this exact policy as effectively banning Section 8 and specifically cited such a rule as discriminatory. The Chicago law is too new to be included there, but I would definitely get a legal opinion to make sure you're on the right side of the law. 

The rationale behind such a rule being illegal was much the same as the rationale in doing away with many of the Jim Crow laws of the south. Rules were equally applied, such as a poll tax or literacy test, but were in practice obviously discriminatory. If a tenant was making 3x the rent, it is virtually guaranteed that they wouldn't have a voucher, and the income caps for most areas make it not even close. 

Just wanted to share this as well: http://nhlp.org/files/03%20NHLP_Bull_NovDec08_sour...

A good summary (though a few years old) on different state's interpretations of how income discrimination laws apply to Section 8. California's laws hadn't been resolved in court at the time, but they too eventually determined that a person's income could only be considered against the portion of rent they would be paying if they held a voucher, however landlords (as successfully argued in court by one Donald Sterling in 2010) can choose not to participate in the program. 

 Your definition is one shared by many landlords, I'm just saying it disqualifies virtually any Section 8 applicant (with how Section 8 rules calculate rent there could be a sliver of folks in your area that would qualify, depending on your local FMRs, income caps, etc.), which defeats the point of the program. The point of the program is to mix low income residents into the general populace by ensuring that they can afford rent. From the government's perspective, they've guaranteed that a tenant isn't taking on greater responsibility for rent than they would be able to achieve on the open market at the industry standard 3x rent level by paying the difference. They see the program as removing income as a potentially disqualifying factor, as the tenant isn't responsible for a greater % of rent to income than any other qualified applicant. By your definition, for you to accept most qualified Section 8 applicants, the voucher would need to be worth about 3x what it is now. Not hard to see why cities might want to address that. 

The crux of the issue with treating a voucher as income is that it isn't a cash benefit, its the same reason food stamps aren't counted as income (though some landlords here do, they aren't required to). The value of the voucher isn't guaranteed the way a fixed income is, it is  a variable guarantee to ensure that the tenant portion of rent is always appropriate. 

Perhaps the best parallel is government backed VA mortgages. They are advertised as an almost entirely no money down mortgage, which in effect to the veteran, is true. In respect to the lender though, they aren't exposing themselves to more risk than the industry standard 75% LTV, as the government has guaranteed the other 25%. Financially speaking, you as a landlord aren't exposing yourself to greater financial risk for a tenant not to make rent than the industry standard of 3x income to rent, so in light of landlords using income to disqualify applicants with vouchers designed to make being low income not an issue, they're seeking to redress that. Makes a lot of sense.

 This isn't mandating that you MUST accept it, ie give preference, from what I'm reading, it simply says you can't discriminate against it if an otherwise qualified applicant applied. Having a high bar for applicants, such as credit score, good rental history or raising your rent, seem like they are perfectly legal ways to avoid most or all Section 8 tenants, as they've always been. 

The entire point of the program is to get away from congregating low income residents in poor areas of a city. Before Section 8, low income housing was almost entirely project based (probably referred to in your city as "the projects") which isn't particularly effective. The voucher program was created to mix the low income residents back into the city at large, and if you read the rules of the program, your PHA has a fair amount of flexibility in setting up the program to meet that goal in your community. To ensure tenants had stable housing, the vouchers are set up so that a tenant is never responsible for more than they could afford on the open market, roughly 1/3 of their income. So, to have landlords refuse to accept the program out of hand effectively becomes another form of discrimination, just as refusing to rent to a minority household, a disabled household, a household that makes only 3-4x rent in a complex with high income tenants making 10+ times rent is. 

I totally understand and empathize that its a bit of extra hassle and paperwork to participate in the program, but considering there's still plenty of ways to avoid the program, I hardly see this as an overstep by the city.