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Section 8 – Do I Have to Accept it?

Do you remember the Clint Eastwood movie, “The Good, The Bad, and The Ugly?” Some landlords equate renting to residents on Section 8, a Federally backed program, the same way. It can be useful, and it can also be not so good and very time-consuming.

But yes, you do have to accept it.

The Section 8 Housing Choice Voucher program is a form of government rent assistance. In 2018, upwards of 5 million people nationwide lived in a household that used a voucher to help pay some or all their rent.

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

Over the last three decades, we have fielded calls from thousands of residents with housing vouchers. However, we were unable to accept the vouchers. Until recently, most management companies and private landlords were not accepting housing vouchers.

New Regulations For Section 8

Today, people who meet income requirements can apply to the program to receive a voucher when they become available. If they are approved, selected, and then find an apartment or house with the voucher, their local housing authority starts sending payments directly to landlords.

The payments cover some or all the voucher holder’s rent. On average, each household will pay somewhere between 30% and 40% of its income on rent. Effective January 1, 2020, California implemented two bills that essentially require landlords to accept Section 8 or housing vouchers as an income source from applicants. Rental property owners cannot discriminate against an applicant or deny the application because they have a housing voucher.

Qualifying for Section 8

To get Section 8 housing, applicants must know the following:

  • Waiting list – applicants must know that there are extensive waiting lists. There are more people interested in obtaining a voucher than there are vouchers available. Most of the time, applicants are placed on a waiting list.
  • Where they want to live – Each local housing authority has different rules regarding Section 8. They must decide where they want to live and then find the local housing authorities that oversee those neighborhoods. Applicants must remember they can apply to housing authorities even if they don’t already live in that town.
  • Household Income – Section 8 is reserved for people making a certain amount of money within the local area. Applicants must check their local housing authority’s income requirements before applying for the program.
  • Immigration status for everyone living at the property – At least one person in the household must have legal documentation to be living in the U.S. for the household to apply for a voucher.
  • Criminal History – Housing authorities across the country do background checks, but each one has different rules. It is possible to get approved for housing if you have a felony or if you are on parole. A significant fact: you CANNOT get a voucher if you, or someone in your household, is on a lifelong sex offender registry, has been convicted of producing methamphetamine in federal housing or has been evicted within the past three years for drug-related reasons.

The Old Way

Previously, it was common for property owners to advertise that they did not participate in Section 8 and wouldn’t consider any residents who had that housing voucher. This practice was common because participating in the Section 8 program was 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 a lot of money.

Some landlords appreciate the Section 8 program because it’s a guaranteed source of income. You know the rent will come in every month because it’s coming from a government agency and not an individual. But for most owners, the Section 8 process isn’t worth their time.

You are now required to allow Section 8 and housing voucher applicants to participate just like everybody else, but this does not mean any of your other screening criteria have to change in any way. You can still have the same credit criteria and require the same income verification. According to Fair Housing, you must require the same criteria for all applicants.

The only change with the income criteria is that you can only look at the portion of the rent that the resident will be paying, not the entire rent itself.

Here’s an example:

If your rental criteria state that a resident must earn three times the amount of rent every month, you’ll have to consider three times the amount of what the Section 8 resident would be paying. So, if they are responsible for only $300 of their rental payment and the voucher takes care of the rest, you need to look for income that meets or exceeds $900 from that resident.

There are two sister bills in place. The second bill does designate vouchers, and it also adds military personnel and veterans as protected classes when it comes to the source of income. So, all three of those protected classes now have a heightened protection level under existing and new discrimination laws.

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. It is anticipated that tenant’s rights groups will be conducting testing to see whether landlords are aware of and are 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.

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”.

Questions About Section 8

There are many questions surrounding Section 8 and Housing Vouchers. We highly recommend Landlords with questions about the Section 8 program contact their local Housing Authority in the area. The Fair Housing Authority is an excellent resource for Landlords and Residents alike.

Learn about the Management One Tenant Screening Process in this post:

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