Opinion: tools for landlords to help low-income tenants

The federal Housing Choice Voucher (HCV) program is a powerful tool to help low-income families find apartments they can afford, but the program isn’t reaching its potential because far too few landlords participate in it.

Landlords who refuse to participate cite several reasons, including what they regard as undue regulatory burdens and concerns about tenant “quality.”

Fortunately, lawmakers of both parties are proposing legislation that would relieve pain points for landlords while providing new incentives for them to participate. The challenge at hand is ripe for bipartisan action.

The HCV program currently provides rental assistance to 2.3 million households. Due to federal funding limitations; however, only one in four eligible households receives a voucher and the waiting lists to get one are often very long. Even with a voucher, a low-income family can find it extremely hard to locate an affordable apartment because so few landlords participate in the program.

Some landlords don’t accept vouchers

In fact, a 2018 Urban Institute study found more than 70% of landlords in Fort Worth and Los Angeles did not accept vouchers. Even more strikingly, over 80% of landlords in low-poverty areas in Fort Worth, Los Angeles and Philadelphia did not accept them. The latter figure is particularly disturbing because vouchers are supposed to enable low-income families to move to low-poverty, higher-opportunity neighborhoods.

Why don’t landlords participate? The Department of Housing and Urban Development (HUD) surveyed them and heard complaints about:

  • Regulatory requirements – including the requirement that housing units be inspected before voucher holders move in, which can extend vacancies between tenants and force landlords to make costly repairs.
  • PHAs – which landlords believe should side with them more often in landlord-tenant disputes.
  • Tenant “quality” – which could, in part, reflect a mistaken belief among landlords that PHAs rigorously screen potential tenants in the HCV program, causing them to skip their own screening process. PHAs only screen for criminal records and evictions, unlike experienced landlords who typically look at credit reports, call previous landlords, and check employment records.

HUD enticing landlords

To its credit, HUD recently took steps to entice more landlords to rent to voucher holders. For instance, the Department raised its estimates of Fair Market Rents, which increases the maximum value of a voucher in a geographic area and, thus, the revenue that landlords receive from voucher holders after renting to them.

Also, HUD has expanded Small Area Fair Market Rents, which sets voucher amounts at a neighborhood level rather than a metropolitan area level. That increases the value of vouchers in high-rent relative to low-rent neighborhoods, enabling voucher holders to live in more expensive, higher-opportunity neighborhoods if they choose to.

Congress has helped, as well. In 2016, lawmakers directed HUD to add 100 PHAs to its Moving to Work (MTW) Demonstration program – which enables PHAs to design and test innovative strategies to help residents with housing and other needs, and which exempts PHAs from many public housing and voucher rules. Currently, according to HUD, 126 PHAs participate in the MTW program.

Now, Senators Chris Coons (D-DE) and Kevin Cramer (R-ND) have introduced the bipartisan Choice in Affordable Housing Act, which proposes to give landlords a host of new incentives to participate in the HCV program.

Specifically, the bill would offer a financial bonus to PHAs that retain a dedicated landlord liaison to manage PHA-landlord issues and disputes. The bill would also reduce the burden of inspections by enabling landlords to meet voucher inspection requirements for their units if they were inspected in the past year. Importantly, it includes some direct incentives, including signing bonuses to landlords in low-poverty areas and security deposit assistance to protect against damages.

In enacting reforms, the administration and Congress should not require PHAs to do more work to improve the implementation of the HCV program without giving them greater resources; their staff capacity is already very limited and unfunded mandates will further burden them.

The HCV program is highly effective, but its reach is far too limited. Increasing the program’s impact should be an urgent, bipartisan priority.  New incentives for landlords to participate, as well as enhanced flexibilities for PHAs, would prove a win-win for landlords and voucher holders alike.

Dennis C. Shea is the executive director of the J. Ronald Terwilliger Center for Housing Policy. Owen Minott is senior policy analyst for housing and infrastructure at the Bipartisan Policy Center.