How landlords thwart America’s attempts to house poor people

“WHY THE fuck does this county even offer Section 8 if it’s a mythical unicorn that nobody ever gets?” asks Alex, the main character in Netflix’s new series “Maid”. The show, based on Stephanie Land’s book “Maid: Hard Work, Low Pay, and a Mother’s Will to Survive”, is a portrait of poverty and domestic work in Washington State. Section 8, now known as the Housing Choice Voucher Programme (HCVP), is a federal housing-assistance scheme that subsidises rent for 2.3m poor American households lucky enough to get their hands on a voucher. Others can spend years on waiting lists, hoping to be chosen.

Housing-policy wonks often refer to the voucher programme as a kind of lottery: win and your life may fundamentally change. When towering public-housing projects were demolished in the 1990s, the Department of Housing and Urban Development (HUD) used vouchers as a way to house America’s poor through the private market. With a voucher, tenants put 30% of their monthly income towards rent and the federal government covers the rest. Many people on voucher waiting lists are homeless or living with their families. Nearly half of all voucher-holders are black, 70% are racial minorities and about a third earn less than $10,000 a year.

Vouchers are not just about housing: cheaper rent means more money for expenses such as food, bills or school. Because vouchers theoretically allow tenants to rent a home anywhere, they can help poor families move to wealthier, safer neighbourhoods. Many researchers view them as a way to increase social mobility.

But not everyone wins the lottery. Many cities have had to close their waiting lists. A new study from the Housing Initiative at Penn, a research outfit at the University of Pennsylvania, estimates that 10.4m households would be eligible for a voucher under HUD’s criteria, four times as many families as there are vouchers for. By comparing the gap between existing and needed vouchers with local renter populations, researchers found that Orlando, Charlotte and Phoenix would benefit most from a policy where vouchers were given to all who qualify.

When the Democrats unveiled their mammoth $3.5trn Build Back Better bill, it included $75bn for housing vouchers. In the version that the House of Representatives passed in November, that was winnowed to about 300,000 new vouchers costing $24bn. Yet receiving a voucher and successfully leasing a unit with it are two very different things. The Penn researchers found that only about one in five households who were eligible for a voucher successfully obtained and used one in 2019. It is tricky to find a home to rent at all in a tight market. But poor renters face extra barriers. The HCVP only gives voucher-holders two months to sign a lease before they need an extension; security deposits can be pricey; and voucher-holders may not have access to a car or a computer to help with their search.

The biggest barrier to using a voucher may be the outsize role that landlords play in choosing whom to rent to. Eva Rosen, of the McCourt School of Public Policy at Georgetown University, says landlords exist on a spectrum. On one end, there are property-owners in poor neighbourhoods who seek out voucher-holders because they like the security of knowing that the government will pay some of their tenants’ rent each month. On the other side are landlords who refuse to rent to families with vouchers because they don’t want to deal with the paperwork and extra inspections that come with the subsidy—or because of outright discrimination.

A study published in 2018 by researchers at the Urban Institute, a think-tank, documents just how hard it is for voucher-holders to sign a lease. Researchers screened 341,000 rental advertisements and called landlords in five cities over 16 months. The authors found that they had to look at 39 adverts, on average, to find one potential home. When they called landlords to check whether they would accept a housing voucher, more than 75% of property-owners in Fort Worth and Los Angeles immediately declined. Denial rates were lower in Newark (31%) and Washington, DC (15%), in part because both cities have laws protecting families with vouchers from discrimination. Los Angeles passed such a law after the study was published.

It is not yet clear how the covid-19 pandemic has affected the HCVP. Stefanie DeLuca of Johns Hopkins University says extra rental assistance might have helped some small landlords struggling with their mortgages. For others, the lengthy eviction moratoriums may have eroded trust between property-owners and the government. While the Democrats’ Build Back Better bill focuses on increasing the number of vouchers, it also includes $230m in incentive programmes to entice more landlords to accept them.

Other adjustments could make the programme more effective. The maximum amount of money a landlord can get from the government is based on the average rent for an entire metropolitan area. Some landlords in poor neighbourhoods covet voucher-holders because they can charge much more for a unit than it would otherwise fetch. Ms Rosen argues that switching to a system where maximum rent varies by zip code will shut down such predatory tactics. And no federal law exists protecting voucher-holders from discrimination. Only 15 states and Washington, DC, can boast of such a measure. Several cities have followed suit. Still, landlords can skirt around these protections by failing inspections or setting rent just above market rates. “No one has paid any attention to landlords since the 1970s,” says Ms DeLuca. It might be time to start. ■

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