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Home » Why Renting To Subsidized Tenants Is Good Business For Nebraska — And Every State

Why Renting To Subsidized Tenants Is Good Business For Nebraska — And Every State

Published by Nikki Palmer on Thu, 04/27/2023 - 2:00am
By 
Ulysses Clayborn
Nebraska Examiner

Across the Great Plains states of Iowa, Kansas, Missouri and Nebraska, nearly 79,000 households have a federal Housing Choice Voucher and have successfully used it to find a home.

That’s a good thing.

Why? Vouchers provide mobility and choice. They lift families out of poverty and into safe, affordable housing. They assist some of the most vulnerable among us, often seniors (29%), people with disabilities (25.5%), or single parents making minimum wage (>45%). The children of voucher holders living in stable neighborhoods are observed to have better test scores, improved earning potential and better health outcomes.

Despite the program’s strong uptake, there are still too many people facing housing insecurity. Right now, there are just less than 8,000 people in the region who procured a voucher but can’t find a home to rent. Some of that is due to a housing supply shortage. But mostly it is because many local property owners just won’t rent to them.

What can be done to change that?

First, let’s clarify how vouchers work. In its simplest form, a voucher is an agreement between a local public housing authority and a private property owner on behalf of an income-eligible tenant.

The authority uses federal funds to pay the difference between what the family can afford to pay. That ends up normally being about 30-40% of the total rent. That means guaranteed money for a landlord, as long as their housing unit meets some reasonable quality standards to safeguard the health and safety of the resident.

What business owner wouldn’t jump at the prospect of guaranteed monthly income? Sadly, the answer is too many. But it doesn’t have to be that way.

The issue — property owners holding on tightly to unfounded myths about subsidized renters rather than leaning into the facts — is a problem with a solution. We can debunk these myths and lessen their grasp upon voucher holders’ ability to find homes.

Here are some of the more common reasons property owners and managers deny applications from voucher holders, despite the larger upside of renting to them:

I can’t charge them the same rent as I would others.

The reality is landlords can charge the full rent no matter who the tenant is. Of course, the local housing authority must determine the proposed rent is reasonable based on the cost of average units in the area and not higher than those with similar amenities. But people obviously don’t want to overpay for their housing, nor should they just because they are subsidized.

These tenants will be a nuisance and damage my property.

In reality, subsidized tenants are typically long-term residents, living in a unit for an average of seven to eight years. They are often elderly or families with disabilities. They are generally good tenants, indiscernible from any other renter.

A serious violation of their lease might mean tenants are not only evicted from their rental unit but lose their voucher altogether. If that isn’t persuasive enough, property owners may seek to recover a portion of tenant damages from a public housing authority under eligible circumstances. That protection doesn’t come with non-voucher holders.

I’ll never be able to evict them if they violate the lease.

Voucher tenants can be evicted, lawfully, just like any other renter. However, when issuing the voucher, both the housing authority and HUD make it clear to voucher holders that they are subject to all applicable landlord-tenant laws, just like non-voucher holders.

If I accept one voucher tenant, all my units must be rented to voucher tenants.

Property owners are never obligated to rent to anyone. But remember, if a subsidized tenant’s income were to go down, the portion of rent paid by the housing authority goes up to cover the difference. This provides robust financial protection for both tenant and landlord. Non-voucher tenants have no similar protection against income loss, meaning problems for the landlord as well.

Of course, there are cases where a subsidized tenant damages a unit, is difficult to evict, or is just plain troublesome. No tenant is perfect, even those with higher incomes.

As the regional leader of a federal agency whose mission is to create strong, sustainable, inclusive communities and quality affordable homes for all, I hope that we can move beyond these myths. In the aftermath of a pandemic, it is refreshing to see that 79,000 voucher holders across the region have active leases. That means a sizeable number of property owners already trust the voucher program, and that is something we can build on.

If you are a property owner in the region and are interested in learning more about the voucher program, and how you improve your bottom line by renting to eligible voucher holders, don’t hesitate to reach out.

Owners interested in the program should visit our landlord resources page for information on how to become a part of the program. Or you may contact our Kansas City regional office at (913) 551-5462.

This article first appeared in the Kansas Reflector, a sister site of the Nebraska Examiner in the States Newsroom Network.

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