No-Go GoSection8.com; Problems with rental estimates

[Bob Galivan]

Over the past year or so, we have been using GoSection8.com (now AffordableHousing.com) as a source for estimating rental values for units that we were opening to subsidized housing customers. A constant source of irritation has been the disparity between the numbers that the website came up with for rent and the offer of rent made by the housing authority in our area. Several calls to their "support" department (and I use that term as loosely as i possibly can) yielded no satisfactory results. 

We finally found out the issue: when a user goes in to the program to obtain a rent estimate, they are able to input the address of the property and the number of beds to be offered. The system delivers four numbers: within proximity of the unit, in the same zip code of the unit, plus wider area numbers that have no bearing.

When the housing authority uses the app, they have a different input matrix, including bedrooms, bathrooms, parking, - apparently nine factors that are used by HUD to estimate the rent. Those factors are significant, as they refine the comparable properties selected for the rent estimates. If the system is looking at the same 100 properties as comps for both myself and the housing authority, my estimate might be based on the average for some or all of those properties, without regards to any amenities, but the housing authority's estimate is going to extract a narrower set of values, rendering a far more accurate estimate.

The issue, then, is that there is no way to determine if the estimate presented to the landlord has any validity whatsoever. This is a problem because in working with traditional renters, the process to identify and qualify a tenant can be fairly rapid, and if the property is well priced for the market, the landlord may have a surplus of tenants to choose from. With a voucher tenant, once a rental package is accepted, everything stops until that package is submitted and vetted, and an offer of rent is presented. In Cleveland, that process has been taking 60-90 days which means that if I am relying on the rental projection from the GoSection8 site, if the offer of rent from the housing authority is below what I can accept, or below market (which is sometimes the case), not only have I lost that market time, but I also have to restart the process of finding a tenant.

The website provider has stated that only a housing authority has access to the full scope of rental data; even paying for a premium subscription does not give me access to any better information. I intend to register a protest with HUD to amend the practice. I would strongly encourage anyone reading this post who has used that site as guidance in the past to do the same.

My normal practice when determining market rent is to use a range of factors, that include GoSection8 data, the local housing authority's published rent matrix, information from Rentometer, from Zillow's rent estimator, and the MLS. The combination of those numbers yields a range of rent for a property that (so far) my pricing has fallen into for voucher tenants. But ultimately, it's grossly unfair to landlords to use two different data sets - one of them invisible - for affordable housing prices.