APARTMENT ADVOCATE
NATIONAL APARTMENT ASSOCIATION /
NATIONAL MULTIFAMILY HOUSING COUNCIL
Congress and HUD must act now to improve the Section 8 Housing
Choice Voucher Program and maximize its capacity for success.
R
enters who rely on Section 8 Housing
Choice Voucher (HCV) subsidies
suffer when process gets in the way
of good sense. “Because of the complicated
nature of rent ‘reasonableness’ requirements
that are established by HUD and enforced by
the Public Housing Authority (PHA), I lost an
existing customer,” said Travis Yates, President
and CEO of Beacon Property Management/
SOCAYR, Inc. “I requested a rent increase to
bring the rate to market level, as the PHA is
paying a higher rent for all new move-ins at this
participating property. The PHA denied the
request, stating that the increase exceeded the
percentage allowed in their guidelines, so the
existing HCV resident moved out. Now, another
HCV-holder is scheduled to move into the same
unit, at the higher rent amount.” This scenario
illustrates the complications inherent in the
HCV Program and the challenges it creates
for residents and operators. The situation at
present also is exacerbated by a number of factors
related to housing affordability problems across
the nation: the technological revolution and
automation increasingly displacing the working-
class; stagnating wages lag rising housing costs; a
growing demand for rental housing necessitating
the country to build at least 4.6 million new
apartment homes at all price points by 2030
(as well as many as 11.7 million older existing
apartments that could require renovation during
the same period), notwithstanding the barriers to
apartment construction in many of these
same markets.
The challenge to resolve this crisis looms
large. For starters, more resources are needed
to invest into federal housing programs like the
HCV Program to help bridge the growing gap
for severely cost-burdened renters. Congress
and the U.S. Department of Housing and Urban
Development (HUD) must act now to improve the
HCV Program and maximize its capacity
for success.
Since the establishment of the Section 8 HCV
Program in 1974, the program has served as a
critical component of the nation’s strategy in
ensuring access to housing for low- and moderate-
income households. The HCV Program functions
as a public-private partnership that has the
potential to be the nation’s most effective tool
to address the housing affordability crisis in the
short-term, but only if the levels of bureaucracy
and red tape associated with the program can be
reduced or eliminated altogether.
46 | TRENDS AUGUST 2019
Although many rental housing providers
across the country are staunch supporters of the
program and actively participate, HUD faces
significant barriers in convincing the lion’s share
of the industry that the program is worthwhile.
“HUD estimates that the United States has 10 to 12
million total [rental housing providers] and only a
fraction of them participate in the HCV program,”
according to research and analysis performed by
HUD’s Office of Policy Development and Research
(PD&R). In “Landlords: Critical Participants in
the Housing Choice Voucher Program,” PD&R
“reports that between 2009 and 2016, the number
of unique [owners and operators] participating in
the HCV program declined from 775,000
to 695,000.”
IT’S THE PROGRAM, NOT THE PARTICIPANTS
One of the most common misconceptions
among critics is that rental housing owners and
operators intentionally discriminate against
Section 8 voucher holders by denying them
housing opportunities. Often, renters’ rights
advocates and some policymakers use this
notion to justify adopting “source of income”
laws at the state or local level under the guise
of fair housing protections for voucher holders.
However, in theory and in reality, these laws do
nothing to effectively increase housing choice and
opportunity for voucher recipients.
The truth is that housing providers do not
accept vouchers because of legitimate business
reasons. Even in areas where source of income
laws are policy, housing providers can still
deny applications from voucher holders if the
applicant did not otherwise qualify according to
the company’s screening criteria. Additionally, it
may not be cost-effective or feasible for a rental
housing provider to adhere to the program’s
requirements to accept a single voucher holder.
Many affordable housing providers dedicate their
business entirely to managing the multi-level
process that is required to participate in the HCV
Program. It can be (and often is) a full-time job to
coordinate with the PHA. In simpler terms, it is
the strings—not the source—that has caused owner
participation rates to flatline.
ADDITIONAL REGULATORY REQUIREMENTS
HUD and more than 2,000 local PHAs
that administer the HCV program require
participating property owners and operators to
comply with additional regulatory requirements
that otherwise are not imposed in a standard
apartment leasing transaction. These
requirements often vary depending on the PHA
and result in financial and administrative burdens.
The requirements include, but are not limited to,
the following:
• Prescribed tenancy approval requirements,
subject to processing delays.
• Execution of HUD’s tenancy addendum
to be attached to every voucher holder’s
lease.
• Rent “reasonableness” requirements.
• Possible delays and inconsistencies in
disbursements of subsidies.
• Limits on rent increases that are subject
to approval by the PHA and often do not
keep pace with local market rates.
• Inspection delays, often with duplicative
requirements.
The program’s requirements do little to
encourage owners and operators to accept
vouchers when they can otherwise focus on
providing market-rate housing to the communities
they serve without contending with these types of
restrictions. These challenges create uncertainty
in rental housing operations, often undermine
the ability of owners to properly manage risk and,
most importantly, lead to negative outcomes for
owners and residents alike. Any improvements
to the HCV Program that streamline the leasing
process and make it comparable to the standard
leasing transaction would considerably benefit
low- and moderate-income recipients.
To do so would increase voluntary
participation by rental housing providers and, in
turn, increase choice and access to quality housing
opportunities for voucher holders. It’s a win-win.
Revitalization of the Section 8 Housing Choice
Voucher Program is a key priority for the National
Apartment Association (NAA) and the industry it
represents. In 2018, NAA gathered experts among
its membership to identify the most significant
challenges that deter owners and operators from
participating in the program. NAA’s members
deliberated and came to a consensus on practical
solutions that would incentivize voluntary
participation in the HCV Program and optimize
its potential for success.
NAA IS EXPLORING THE FOLLOWING OPTIONS
TO MOVE FORWARD:
•
Strengthen the set of standards that HUD
requires PHAs to follow.
www.aamdhq.org