Do I have to accept Section 8 in California?

Do landlords in California have to accept Section 8?

Yes, landlords do have to accept Section 8.

The Section 8 Housing Choice Voucher program, a federally backed program, is a form of government rent assistance. According to the Housing Authority of Riverside County, pre-COVID, the wait list for housing vouchers was 80,000 applicants. As of July 2023, 137,000 applicants were waiting for funding.

When Congress established Section 8 of the Housing and Community Development Act in 1974, one goal was to ensure that people earning low wages could find “decent housing and a suitable living environment” outside public housing units.

On January 1, 2020, California implemented two bills requiring landlords to accept Section 8 or housing vouchers as an income source from applicants. Rental property owners and management companies cannot discriminate against an applicant or deny the application because they have a housing voucher.

Section 8: How Section 8 Housing Regulations Work

Do you remember the Clint Eastwood movie “The Good, The Bad, and The Ugly?” Some landlords equate renting to residents on Section 8 the same way. With a guaranteed rent payment each month, renting to a Section 8 tenant has its advantages; but it also presents challenges that can be very time-consuming to navigate.

Today, people who meet income requirements can apply to the program to receive a voucher when it becomes available. If they are approved and selected and then find an apartment or house with the voucher, their local housing authority sends payments directly to landlords or the property management company.  The payments cover some or all of the voucher holder’s rent. The payments aim to make housing more affordable for voucher holders by ensuring each household pays no more than 30% to 40% of its income on rent.

Before the 2020 legislation that made it mandatory to accept Section 8 vouchers, it was common for property owners to advertise that they did not participate in Section 8 and wouldn’t consider any residents with a housing voucher.

This practice was common because participating in the Section 8 program was seen as an administrative burden. There are many hurdles to cross, including a home inspection, verified habitability, and an approved residency. The delay in getting approved and prepared could cost landlords money in lost rent.

On the other hand, some landlords appreciated the Section 8 program, seeing it as a guaranteed source of income. You know the rent will come in every month because it comes from a government agency, not an individual. However, for most owners, the Section 8 process was seen as a waste of their time. With the legislative change, all landlords and property management companies must accept Section 8 and housing voucher applicants.

Section 8: 2024 Applicant Rental Criteria Changes

Before January 1st, 2024, landlords could use the same criteria for all applicants, Section 8 and Non-Section 8, when qualifying an applicant for a home.

If your requirements state that all residents must have more positive than negative credit, all applicants must meet that criteria.

As of January 1st, 2024, Section 8 applicants must be asked if they want their credit evaluated. They can elect not to have their credit considered as part of the process. The thought behind this law is that most people with housing vouchers are there for a reason, and most likely, their credit will not meet the standards to qualify for a home.

Fair Housing Is Checking for Compliance

The passage of SB 329 and SB 222 means that California residential landlords throughout the state will no longer be able to say they don’t participate in Section 8, VASH, or other rental assistance programs. Now, tenant’s rights groups assess whether landlords are aware of and complying with the law. Landlords who don’t currently participate in rental assistance programs are advised to respond to inquiries about whether they accept Section 8.

This change means that ads can no longer state that Section 8 is not accepted. The Fair Employment and Housing Act (FEHA) states:

“that it is unlawful to make, print or publish or cause to make, printed or published any notice, statement, or advertisement concerning the sale or rental of a housing accommodation that indicates any preference, limitation, or discrimination based on any enumerated protected class, including a source of income. Accordingly, it is essential that all advertising (including ads posted on personal and third-party websites such as Craigslist) be revised to remove any references such as “No Section 8” or “We do not participate in Section 8”.

Jumping the Section 8 Housing Hurdles

Since the new legislation came into effect, Management One has processed over 30 Section 8 applications. We’ve learned how to navigate Housing Authority hurdles. It’s important to note that just because an applicant has a voucher, or an F-sheet doesn’t mean they qualify for the property they are applying for.

We highly recommend you call the Housing Authority office and inquire about the applicant and provide them with the specifics of the property they are applying for. When approving an application, Housing looks at what utility company services the property, the rental rate, and if the appliances are gas or electric. If the applicant doesn’t qualify for the property, there’s no sense in spending time filling out the 34 pages that make up the application.

The approval process takes about one to two weeks. If the application is approved, the next step is the inspection. Inspectors assess the property to ensure it’s safe for the incoming resident. You may have heard horror stories about Housing coming in and making a laundry list of demands before they will approve an application. However, we’ve found that’s not the case. In our experience, if a home fails a Housing inspection, it’s usually because the property was built to what is now an outdated code standard that needs to be updated.

Once the home passes inspection and the resident moves in, the Housing Authority can take up to six weeks to send the payments. In the meantime, the resident is responsible for paying their portion of the rent. Once the Housing Authority establishes the payments, they come in like clockwork on the first of each month.

Working with the Federal Government requires a lot of work and patience. Knowing how to navigate these hurdles yourself or teaming up with a management company familiar with the process will give you peace of mind.

Another article that California landlords need to be aware of is the New Security Deposit Law.