NewsLEX 18 In-Depth


How landlords can help with affordable housing, why some choose not to participate

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Posted at 7:08 PM, May 24, 2022
and last updated 2022-05-24 19:08:27-04

LEXINGTON, Ky. (LEX 18) — The demand for affordable housing is high across Kentucky, but the supply of available units is desperately low. Many say landlords are the key to more options, so why aren't more participating?

The housing choice voucher program, or "Section 8" helps low income-or disabled families afford private housing. Yet LEX 18 has heard from several families who can't find a place to use their vouchers, which have expiration dates.

Once families chose to participate in the voluntary program and are awarded a housing voucher, they have to find a landlord who will accept it on their own.

Most say they couldn't find a landlord to work with them or an open unit.

While more affordable housing projects are being built, tenants are relying on private landlords. The U.S. Department of Housing and Urban Development (HUD) says 31,715 Kentucky households use Section 8 housing choice vouchers. There isn't data revealing how many landlords are participating, but HUD estimates that the United States has 10 to 12 million, and "only a fraction of them" participate in the program.

HUD also reports that between 2010 and 2018 they saw a 13% percent decline nationally in landlord participation in the voucher program. Taylor Moody, a small-scale real estate investor says there's a lot of skepticism going around amongst landlords.

"I know a lot of people have pushed away. When I talked to some different, other investors, most of them suggested not to do Section 8," said Moody.

Yet, knowing he could help a family and get guaranteed rent from the government, Moody didn't let that stop him.

"To me, people are people. I've known people that were on section 8 growing up," said Moody.

Moody agreed to move in a tenant with an emergency housing voucher. However, he moved the tenant in before the unit passed a housing quality standards inspection.

"They tell you that Section 8 you are taking on that risk, you don't receive any rent payments until they pass inspection, and we were happy to take that risk," said Moody.

What he wasn't happy to take on is failing two inspections and not collecting rent until he passes a third. He feels he's going through all the trouble because he got a different inspector each time with different expectations.

"One of the people up there told me they all do it a little bit different and that can make it really tricky on the end user here," said Moody.

Now, he's three months and $4,300 in the hole not including missing rent for what he believes is "nitpicking." Moody says he was just trying to help a family in immediate need, while also generating income.

"They said 'Well if you want, we'll re-issue her voucher, and then she can find somewhere else to live.' No, she can't. If you re-issue her voucher, the chance for finding someone else-it's not. There's no housing," said Moody.

He would like to start collecting income to help pay for some of the repairs.

"I could not maintain this indefinitely. But for this period, it's not her fault," said Moody. "This is not something she did, or her kids did and I'm not going to put it back on them."

He added every time he has a listing, he gets a host of calls asking if he accepts the voucher program.

"There's obviously a group of people that aren't getting served," Moody said.

The Kentucky Housing Corporation, which runs the housing program in 87 Kentucky counties that don't have a local public housing authority, did not address the alleged difference among inspectors. However, they say the reason they require what they do is because of HUD housing quality standards (HSQ), which are considered the minimum standards for a tenant's health and safety.

Here's information on those standards:

"Make Sure It Passes" gives landlords helpful information to ensure an inspection passes.

The Virtual Pre-Inspection is a program that gives owners a chance to ask specific questions before their initial inspection.

Jim McKenzie, President of the Lexington Landlord Association says landlords decide whether to participate based on factors, some financial, some just skepticism or unfounded rumors.

"Some people like it. Some people fear it. Some people have never done it," said McKenzie.

McKenzie says every office is different his experience as a section 8 landlord has been simple.

"I think it's an easy process," said McKenzie. "It's all about safety. It's not necessarily about appearance. It's about safety. They check to make sure the place is safe and habitable."

Still, based on his experience, Moody is pushing to make the process even easier.

One solution many have brought up is incentivizing the repair of older buildings. While some state and local governments and public housing agencies have tried to increase landlord participation KHC says they currently don't have an incentive for the Section 8 program.

Some built-in incentives they suggest are:

- Getting timely, dependable payments

-Having long-term tenants

-Having the ability to request annual reasonable rent increases

"We do offer landlords incentives to participate in the Emergency Housing Voucher Program, which is a little different. Unlike Section 8, where recipients apply to participate in and qualify for the program, we receive referrals for the EHV program, because it helps groups, including those who are homeless, at risk of homelessness, or fleeing domestic violence/sexual assault/human trafficking, find stable housing and avoid homelessness. KHC specialty vouchers can be used in any county except Fayette and Jefferson," said Molly Tate, Managing Director of Communications and Marketing.

KHC says they always welcome new landlords.