Sunday, September 9, 2012
Why does the mention of Section 8 tenants panic some communities?
The Housing Choice Voucher Program sponsored by the Department of Housing and Urban Development (HUD) is more often known by the name Section 8. Qualified applicants who meet certain income requirements receive vouchers used to subsidize the cost of housing. HUD's goal is to provide housing to low and very low income families. Generally, the family's income cannot exceed 50% of the median income for the county or metropolitan area in which the family chooses to live.
Here's the part that most folks don't understand. The family that is issued a housing voucher is responsible for finding a suitable housing unit of the family's choice where the owner agrees to rent under the terms of the Section 8 program. These rental properties must meet certain minimum standards of health and safety but other than that, if the family and the landlord agree, any property is conceivably eligible to take part in the program.
Here's where your community comes into the equation. It is no secret that many owners have experienced or are experiencing financial difficulties in many communities. Some of these owners traditionally rented out their homes or units and others are now being forced to do so as a result of the economy. Section 8 tenants are looking more appealing to many landlords since the Public Housing Agencies for the various counties are a reliable source for their share (usually about 2/3 while the tenant pays 1/3) of the rent each month.
For properties in more upscale communities, meeting the government's criteria for health and safety is not really an issue. Also, the housing voucher is generally larger for properties with more space to accommodate larger families so these upscale properties fit the bill in that regard as well. Owners who are intereseted in participating in the Housing Voucher program can list their properties at GoSection8.com.
The way this works is that the family and landlord sign a lease. The landlord and the Public Housing Agency sign a housing assistance payments contract that runs for the same time as the lease agreement. Some associations are now trying to deny leases where the tenant will be receiving Section 8 assistance. Boards should not attempt to do so without speaking to their association attorney to determine if such denial is legal and supported by their governing documents.
For some communities, having Section 8 tenants has been a positive experience as it has kept homes out of foreclosure. Another added bonus is the fact that those same Public Housing Agencies who pay their share of the rent timely each month must also pay if the owner of the property becomes delinquent in the payment of his or her assessments to the association. Some Public Housing Agencies have tried to argue that the demand for rent statutes do not apply to them but this argument has been successfully defeated in court. Lastly, housing experts say that Section 8 tenants in more upscale communities have benefitted from exposure to communities they otherwise would not have known.
The mention of Section 8 Housing need not strike terror in your hearts. Get informed and discuss the pros and cons of the program with your association attorney before making decisions or taking action.