Housing Vouchers Don't Pay the Rent

Sunday, July 31, 2016
Patricia Borns and Melanie Payne
News-Press

Jacqueline Reyes became a victim of the government program designed to help her.

For nearly 10 years, Reyes, 48, rented homes with the help of vouchers from the federal Housing and Urban Development Section 8 program. The vouchers help folks like her with very low incomes afford a place in the private housing market – Reyes, an office cleaner, put 30 percent of her wages toward her rent, and the voucher guaranteed HUD would pay the rest.

But two things changed: HUD’s rules and Lee County’s housing market.

When the house Reyes lived in was sold and her new landlord raised the rent, the Housing Authority of the City of Fort Myers, which administers Section 8 vouchers, wouldn’t pay the higher amount.

“I’m homeless,” Reyes said. “There are few places to live on what my voucher will pay.”

And when she does find a place she can afford: “They don’t take Section 8. I’m screwed either way.”

Reyes’ voucher covered $699, including utilities. Her Lehigh Acres landlord wanted $850. When last contacted by The News-Press, before her phone was disconnected, Reyes was sleeping in a recliner in one of the offices she cleaned.

Her case isn’t unique. On a day that should have been a crowning glory – a school graduation – neither Carmen Solares nor her graduate daughter could take a shower because a similar Housing Authority decision had rendered them homeless.

“‘Your voucher is $741. Get a place,’” Solares said she was told. “I’ve been looking. $925, $950, $1,000, $1,300 … that’s in Lehigh. They won’t pay that kind of money.”

Hurry up and wait

With housing costs ballooning across the country, the demand for affordable rooftops far outstrips the supply and HUD’s budget.

“About 25 percent of those who qualify for Section 8 assistance receive it,” said Corianne Scally, a senior research associate at the Urban Institute, a social and economic policy think thank. “The other 75 percent are wait-listed or don’t apply.”

One name on the Section 8 waiting list is Chardonnaye Johnston. The 22-year-old is the mother of two of Solares’ grandchildren. Johnston, who lives in Fort Myers, has been on the waiting list for more than a year.

She knows some people wait years for a housing voucher, but thought her circumstances might get her to the top of the list. One of her children was born with a condition called microcephaly.

“She has severe brain delay and seizures. She’s missing her frontal lobes,” Johnston explained. “I thought with a disabled family member I’d get up on the list. But it’s on a first-come basis.”

The Housing Authority’s waiting list opened with 5,800 names on it in June of 2015, and is down to about 4,000, according to Director of Operations Sherri Campanale.

But Housing Authority Director Marcus Goodson said the availability of housing changes with the real estate market.

“When the economy is booming, it’s harder to find rentals,” he said. “But when the economy is in the tank, there’s a surplus of Section 8 housing available.”

The surplus Goodson refers to was an exception, however, caused by the housing crash of the mid-2000s, that led to a credit crisis of epic proportions.

During the crash, “landlords were banging on our doors. There were vacancies everywhere,” Campanale said.

Now: “Landlords are dropping out quicker than we can add them.”

As many as 30 landlords at one time have doubled their rents in one month and withdrawn from Section 8, Campanale said.

While the voucher is good for 30 days, it’s taking clients like Solares 90 days or more to find an acceptable rental.

Rent unreasonable

The Housing Authority has the ability to issue 2,081 vouchers, but that doesn’t mean it has the funding.

The system depends on people doing better for themselves.

“If the majority of people are not paying a large portion of the rent, the funding has to pick up the tab. That makes fewer vouchers to go around,” Campanale said.

Her agency pays on average about $564 per client -- “not bad,” she says.

Escalating rents eat up vouchers, too. Every year, Section 8 landlords want more money.

The agency uses GoSection8, a third-party appraiser based in Tallahassee, to determine reasonable rates and help tenants find available rentals. The program compares the landlord’s property with three similar ones within a certain radius to arrive at what HUD calls a "rent reasonable" rate.

Landlords and HUD don’t always agree on "reasonable." The rates are generally about two years behind the market, Campanale acknowledges; a problem when housing rental rates ramp up quickly, as they have since 2014. Median rent rates have increased 12 to 18 percent year over year in the Cape/Fort Myers area, according to Matt Simmons, an appraiser with Maxwell, Hendry & Simmons who follows the rental market.

“If you can get $1,200 for the unit, by gosh, go get it,” Campanale said. “We know it’s a business, and the market changes. That’s why every time a landlord puts in for a new client, we run the ‘rent reasonable’ again.”

That’s good for landlords, but creates housing insecurity for tenants who can fall victim to churning. Reyes, for example, had to move because she couldn’t get a voucher for the higher rent. But the next tenant might get more, when the Housing Authority runs another appraisal on the unit.

GoSection8 isn’t always accurate, either, The News-Press found.

In one case, the tenant wanted to rent half a duplex, but the comparable duplex used to determine fair rent included the square footage of the whole building, resulting in a much lower rent per-square-foot.

In another instance, the GoSection8 analysis compared a three-bedroom, two-bath home with a vacant lot.

Making do with less

The goal of Section 8 is to prevent low wage earners from having to overspend on rent. As their wages and savings grow, the hope is they’ll pay a larger share of the housing cost, graduating to home ownership.

Only a handful do become homeowners, however -- 20,000 nationally from 2006 to 2012; in Fort Myers, 18 people -- as HUD is challenged to do more with less.

When HUD's budget was slashed during the federal spending cuts of 2013, so was the Housing Authority's.The agency had 6 percent less to give to Section 8 vouchers --

That left two choices: help fewer people, or help the same number of people but give them less. The agency chose the latter, effectively funding half the living space for client families.

For Solares, it meant she and her daughter must settle for a lower standard of housing, something the 65-year-old housekeeper is unwilling to do.

Despite severe back pain, Solares continues to work to afford something better. But her $741 voucher only counts toward a one-bedroom apartment (the living room is counted as a bedroom). Even at that, inventory is limited except in sketchy neighborhoods.

“Both me and my daughter have to come and go at night,” she said. “I would be putting my daughter’s life at risk, or my life.”

Mother and daughter currently bunk in a two-bedroom apartment with her son, his partner and their three children. While Solares keeps looking for a place of her own, she and her daughter share a small bedroom with two of the kids.

Brave new proposal

Section 8 has been around since the Great Depression, morphing continually with the economy. Now is no exception.

HUD's latest proposal would increase the fair market rent allowance in cities where housing costs are highest -- with a difference: To keep landlords in low value neighborhoods from gaming the system, only ZIP codes with higher property values will get HUD’s higher fair market rents.

The goal is to give people a chance to live in better neighborhoods.

"Most people can only afford places where rent is low but poverty is high," HUD Public Affairs Officer Gloria Shanahan said. "Studies show if you move out of that area, children have better access to college and jobs."

ee County isn't on the program's list of target areas, but the Housing Authority can opt in if it wants to. If it does, it can set a payment standard for each ZIP code, some higher than others, and renters can use that standard to search for a unit.

“I think it’s a creative alternative,” to the way the program currently works, said the Housing Authority’s Goodson. “It helps to increase affordable housing choices for the families."

But the ZIP code approach can only give people a leg up if the better neighborhoods accept them.

“Nimbyism exists,” Goodson said, referring to the acronym for not-in-my-backyard. “When you move into a ZIP code where there are no renters, they don’t want renters. And they don’t want renters on Section 8. There is absolutely a stigma.”

Despite its many challenges, Scally believes Section 8 is as relevant as it ever was.

“I definitely think there is a need for federal funding and subsidy to house poor people,” the researcher said. “I don’t think the market does a very good job without incentives and help from the fed.”

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