Section 8 Shutout: Philadelphia Landlords' Refusal to Rent

Section 8 Shutout: Philadelphia Landlords' Refusal to Rent

Real Estate Agent · Philadelphia, PA · Member since 2018 · 428 posts · 484 votes

The mayor just signed off on  legislation to that is aimed at tackling the issue of discrimination against households that use tenant-based vouchers, also known as Section 8 vouchers, to pay for their housing. These vouchers are provided by the Philadelphia Housing Authority and are meant to help low-income families afford housing on the private market. However, the resolution states that many landlords in Philadelphia are refusing to rent to households that use these vouchers, making it difficult for these families to find housing. The Fair Practices Ordinance already prohibits landlords from refusing to rent based on a tenant's source of income, including tenant-based vouchers. However, the resolution suggests that source of income discrimination is still a problem. The Committee on Housing, Neighborhood Development, and the Homeless will conduct hearings to examine the issue of source of income discrimination and how it is exacerbating the City's affordable housing crisis. As a result of this resolution, landlords may face increased scrutiny and possibly penalties for refusing to rent to households with tenant-based vouchers. They may also be required to participate in education and outreach programs to learn about their obligations under the fair housing laws, accept tenant-based vouchers, or face penalties. Landlords may also face increased competition for housing stock from households with vouchers, and may experience lower vacancy rates or higher tenant turnover. Overall, landlords may need to adapt their business practices to comply with the fair housing laws and to accommodate tenants with vouchers.

Section 8 landlords and Section 8 adverse landlords, what do you make of this?

Link to legislation: https://phila.legistar.com/Leg...

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Kevin MoyerBusiness Member
Property Manager · Philadelphia, PA · Member since 2019 · 269 posts · 301 votes
3y

Thanks Jimmy this is a significant looming issue that courts have been dancing around for a while in Philadelphia. It's currently illegal to discriminate based on an applicant's source of income when evaluating a rental prospect, but does a voucher really qualify as 'income'? 

The voucher is tied to mandatory training certification for landlords, mandatory property inspections, and mandatory administrative work with PHA. There's a lot more to working with a voucher-holder than simply accepting the voucher as income. It's a significant burden and risk on landlords. 

Even if you agree to do all the required administrative work, you have to get all the way through the process to get a rent 'offer' from PHA that can be hundreds of dollars less than your marketed price. 

It's my professional opinion this is an even more important issue to monitor than 'rent control' and will have a significant impact on property rights.

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  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    3y

    Huh? I thought acceptance of vouchers was the law of the land?

  • Kevin MoyerBusiness Member
    Property Manager · Philadelphia, PA · Member since 2019 · 269 posts · 301 votes
    3y

    Thanks Jimmy this is a significant looming issue that courts have been dancing around for a while in Philadelphia. It's currently illegal to discriminate based on an applicant's source of income when evaluating a rental prospect, but does a voucher really qualify as 'income'? 

    The voucher is tied to mandatory training certification for landlords, mandatory property inspections, and mandatory administrative work with PHA. There's a lot more to working with a voucher-holder than simply accepting the voucher as income. It's a significant burden and risk on landlords. 

    Even if you agree to do all the required administrative work, you have to get all the way through the process to get a rent 'offer' from PHA that can be hundreds of dollars less than your marketed price. 

    It's my professional opinion this is an even more important issue to monitor than 'rent control' and will have a significant impact on property rights.

    Otter Property Management4.8624 Reviews
  • Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
    3y
    They just past source of income discrimination rules here in Akron but it really only applies to the very cheapest rentals because HUD rules only allows voucher programs to pay 40% of the median FMR for a small zip code area. They don't make landlords accept less money than the rent charged on the open market so theses rules don't apply to the 60% of the landlords that charge more than 40% of the median. We have extra nice rentals and we charge more than the voucher program is willing to pay.
  • Rob LawrenceBusiness Member
    Real Estate Agent · West Chester, PA · Member since 2017 · 266 posts · 94 votes
    3y

    Philly is just getting tougher and tougher to invest in.  Staying in the suburbs personally.  So hard to comply with all these rules.

  • Merchantville, NJ · Member since 2019 · 39 posts · 32 votes
    3y

    I am not sure how they would enforce this on properties not in the PHA program?  Do some landlords choose not to participate in the PHA program due to the burdens?  Yes, absolutely.  

    Maybe instead of more regulation on landlords, PHA should examine their program and find out why landlords are not interested in participating in section 8 in the city.  In addition to the inspections and other burdens already mentioned there are payment and communication issues with the fair housing agency.  I know several landlords that haven’t received payment from PHA for months in a row and no one at the PHA administration answers emails or phone calls.  After speaking with several landlords currently in the PHA program and hearing the horror stories I have no interest.  

    Just another reason I am selling my portfolio in Philadelphia.  I once had hopes for the city but its been steadily going down hill.  The likely prospect of a new ultra liberal mayor is terrifying for investors.  When will city hall realize the burden they put on landlords is the reason there are no nice, affordable places to rent?  Good landlords can’t win in Philadelphia.
      

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