What Section 8 Landlords need to know: Lower Voucher Payment Standards

[April Adams]

As you may know, effective January 1, 2025, the Section 8 voucher payment standards (VPS) in many zip codes in the City (and County) of Los Angeles were reduced. The Department of Housing and Urban Development (HUD) relies on comprehensive statistical data to determine the fair market rent (FMR) for regions across the U.S. Until recently, HUD approved the Housing Authority of the City of Los Angeles's (HACLA) request to set their VPS at 120% of the FMR. For example, in 2024, HUD set the FMR for a 1-bedroom unit in Los Angeles at $2,006, while HACLA's VPS for the same unit was $2,407—$401 above the FMR. This higher VPS was designed to incentivize property owners to participate in the Section 8 program.

However, with the recent designation of source of income (SOI) as a protected class under California state law, HACLA no longer needs to provide this incentive. Property owners are now prohibited from discriminating against potential tenants based on their use of rental assistance, such as Section 8 vouchers and security deposit assistance.

The previous higher VPS levels were part of a strategy to ensure HACLA could fully utilize its voucher allocations from HUD. By utilizing more vouchers, HACLA maximized its earning potential in administrative fees from HUD. In 2023 the Los Angeles Mayor said, "This coordinated action to raise the value of the vouchers is a major step toward bringing more people inside into permanent housing." However, this approach inadvertently led to rising rental costs, which contributed to many non-Section 8 tenants being priced out of the rental market in Los Angeles. It is frustrating to see how easily these higher rent levels have been tethered to property owners, when they were part of a broader strategy designed with specific intentions in mind.