The Oakland Housing Authority (OHA), tasked with providing affordable housing to low-income residents, has a problem. During a three-year span, from 2013 to 2016, over 1,000 landlords left a program that is one of Oakland’s largest providers for affordable housing: Section 8.
The Section 8 program allows low-income residents to use a federally-funded voucher to pay rent. Tenants pay 30 percent of their adjusted gross income to their landlord, and the rest is paid by their voucher, which covers up to the fair market rent that is decided upon by the federal Department of Housing and Urban Development (HUD). For Oakland’s low-income residents, finding a landlord willing to accept their voucher could mean the difference between living on or off the streets, as well as a chance to reside in one of Oakland’s safer (and more expensive) neighborhoods.
In January, OHA launched a first-of-its-kind program to bring these landlords back, using incentives like a $500 signing bonus for first-time Section 8 landlords, up to $2,500 in interest-free loans for unit upkeep, and up to two months paid rent in between Section 8 tenant vacancies.
“All we want is to have people give us a chance or—in some cases, when all the landlords left—come back. We need their help. We can’t do it without the private market,” said OHA executive director Eric Johnson.
Since the program’s inception, around 682 new units started leasing to Section 8 tenants. According to OHA, this is nearly double the number of new units compared to the same time period last year. Still, Johnson hopes the new program will push Section 8 landlords to put 400 more units on the market by December.
Those 400 units are needed. At any given point, around 100 to 130 new vouchers are available to be granted, according to Johnson. But who will get those vouchers depends on a lottery-style waitlist—a waitlist that has not been open for new names in seven years. When that waitlist first opened in 2011, it closed after just 5 days. Some 54,000 people applied.
“It’s unfortunate, but true. We just haven’t been able to get families,” said Johnson. “It gives you an idea of how little the program has been turning over because of the rental crisis in our area. People are not actually graduating off the program at the rate they used to. They’re staying on the program longer, because rents are so unaffordable.”
According to Johnson, many landlords left the program because of rising Oakland rents. In the middle of the three-year period when OHA saw over 1,000 landlords leave Section 8, Oakland had the highest annualized rent increase in the country for two years straight, according to Johnson.
According to a study done by the rental site, Trulia, the median rent in Oakland has gone up roughly 51 percent since 2012. The average annual income for a Section 8 tenant is $19,370, which only covers about 6 months of the median rent in Oakland ($2,950 a month, according to Trulia).
Constrained by fair market rents set by HUD, the most profitable choice for landlords was clear: rent on the open market.
Martha Galvez, a senior research associate at the Urban Institute, co-authored a nationwide pilot study on landlord acceptance rates for vouchers. Their study found that, on average, it took sifting through 39 advertisements to find one unit that was even eligible for a voucher. Galvez added reasons other than rising rents that might explain why more landlords aren’t taking vouchers. She said bad experiences with Section 8 tenants in the past or the bureaucracy of dealing with a city’s housing authority could contribute to landlords dropping out of the program
“It’s really hard to use these vouchers. People are doing it and there are a lot of landlords who take them, but there are a lot of landlords who are not,” Galvez said. “We’re not hitting all of the landlords with this program that we would want to or that we could.”
While OHA’s incentive program was intended to bring new landlords into the fold, some long-time Section 8 landlords say they also are benefitting. Johnny Burks rents five of his eight units to Section 8 tenants. Before, landlords like him had to wait for their units to be inspected before they could rent to a new Section 8 tenant. With the new program, Oakland has waived the federal requirements, so now inspections can be streamlined. “The attitude and the treatment from [the inspectors] that came out to the apartments–they’re so much more friendly than before,” Burks said. “Before, you felt like you were taking the SAT.”
Burks has been a Section 8 landlord for roughly 40 years. “I went through all the hardships and headaches of Section 8 and sticking it through for this long, I can finally see there’s a turnaround–it’s really beneficial for the landlords,” said Burks.