Economic Boom Has Negative Repercussions for Section 8 Renters
For Peter Klooster, a disabled hotel employee who is struggling to lead an independent life in South County, finding a place to live has proved a tougher challenge than landing a job.
The job took merely weeks to find. But after months of desperate searching for a home, the 40-year-old Laguna Hills resident still can’t find a landlord willing to accept his Section 8 housing voucher. As rents soared to record levels countywide, Klooster’s apartment owners raised his by about $200 to $1,016, leaving him and his roommate no other choice but to look for another place.
“Everywhere you go, they’re either not taking Section 8 at all or there’s a long waiting list,” said Klooster, who has lived in South County most of his life and is now on several waiting lists for an affordable apartment.
When the federal housing subsidy program began under former President Nixon, it was considered revolutionary because it provided low-income individuals like Klooster access to quality housing and the opportunity to choose where to live, and by implication, escape pockets of poverty, experts said. But the tight market is threatening both of those objectives nationwide, they said.
“This is essentially happening all over the country, particularly in high-rent areas,” said Michael Kane, director of the National Alliance of HUD Tenants. “HUD and Congress are trying to respond by offering more money, but I’m not sure that’s going to solve the problem. . . . I see it getting worse.”
In Orange County, that phenomenon is being played out mostly in southern and coastal cities.
In the county’s unincorporated area, much of which is in South County, the number of federally subsidized renters fell 50% over the last year, from 851 to 427. And since 1995, that figure has declined in Newport Beach by 34%, Irvine by 29% and Laguna Niguel by 21%.
In the more urban North County, the number of federally subsidized renters is on the rise. Since 1995, Westminster saw a 66% increase and Stanton saw an 18% jump.
“People are having to go back to the neighborhoods they’re trying to escape from,” said John Hambuch, manager for the Orange County Housing Authority’s Section 8 program.
At the same time, more local families are unable to find housing. For example, about 20% of the newly issued vouchers in Orange County are never used, mostly because people are unable to find a rental, Hambuch said. That rate is among the worst in California, behind only San Francisco and San Jose, he said.
The program is designed for people earning less than half the median income. They pay as much as 40% of their salary toward rent and the government subsidizes the rest, up to a certain limit.
While Orange and Los Angeles counties are in a crunch for affordable housing, officials in San Bernardino County--where rents are cheaper--said they are getting more Section 8 transfers. Though the numbers have not increased significantly, the trend is disturbing, said John McGrath, executive director of the San Bernardino County Housing Authority.
In August, there were 757 transfers on the list, 400 to 500 of which were from Los Angeles County and about 50 from Orange County, McGrath said. Riverside County also received a slight increase in transfers from Orange County, but exact numbers were not readily available, officials there said.
“Our concern is why are we getting all the poor people,” McGrath said. “The rent is so high in Orange County and Los Angeles that it’s pushing all the poor people further east. . . . It’s all about affordability, affordability, affordability.”
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Though the program has had its share of problems in the past, including waiting lists stretching as long as five years in some areas of California, most people were able to find convenient housing once they received the rental vouchers or certificates. The system was a huge departure from the previous approach of building large public housing projects, in that it allowed tenants much more freedom to choose the location of their homes. In many cases, that translated to a better life for themselves and their families, experts said.
Hambuch, the county’s housing manager, recalled “the good old days” when the economy was bleak but affordable housing was plentiful. During the recession, many landlords couldn’t find enough people to fill their rentals and depended on the program to provide tenants. The rent was practically guaranteed, officials said.
Landlords and developers also took advantage of low-risk funds for housing projects, as long as they provided a certain number of affordable units for a set amount of time, which is usually about 20 years depending on the contract. They could drop out of the program by not renewing after the deadline or by prepaying their mortgages.
In the last two years, about 100,000 units were lost nationwide due to such practices. A large portion of that loss occurred in California, according to statistics from the Department of Housing and Urban Development, which funds the programs nationwide.
The competition for affordable housing has become so stiff that counselors are training prospective tenants on how to market themselves to landlords, said Vickie Cushing, field representative for the county’s housing authority. This year, the agency initiated a videotape that briefs potential Section 8 tenants on the application process, including what to say during interviews.
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Such advice has paid off for Jacqueline Kedney, a single mother who found a Section 8 home in Mission Viejo after renovations at her last apartment caused a rent hike beyond her ability to pay. Kedney, who earns about $11 an hour as a receptionist, said it took several months to find another apartment for herself and her two children, ages 6 and 14.
“There were so many people who wanted nothing to do with me once I said ‘Section 8,’ ” Kedney said. “So I had to try and do everything possible to get them to look at me as a person and try to believe in me, that I have a regular job and a good credit history and I pay the rent on time.”
Kedney is living in a two-bedroom home close to her work, and her son can walk to school. But even now she fears that one day, she’ll come home and find a notice of a big rent increase.
“That scares me,” she said. “What’s going to happen to us? Are we going to be kicked out again? It stresses me out badly.”
Klooster, the hotel worker, fears that if he can’t find a Section 8 apartment, he’ll have to either move farther north or give up his benefits, which probably would mean that more than half of his monthly income would go toward rent.
And while the prospect of going back to a group home is still far off, Klooster has had to consider the possibility.
“I would not ever want to go back,” Klooster said. “I like being on my own. I have my own checking account and savings account . . . and I can cook my own meals.”
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Rent Subsidies Shift Inland
In the last five years, Orange County residents receiving federal housing subsidies have increasingly moved out of cities in the coastal and southern regions, where rent has risen to record levels averaging more than $1,000 per month. Last year, the county paid about $500 monthly for each of about 7,000 families enrolled in the Housing and Urban Development rental subsidy program.*
Some cities that lost households receiving HUD rental subsidy in the last five years:
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1995 1996 1997 1998 1999 Costa Mesa 498 512 499 480 478 Huntington Beach 822 859 831 810 749 Irvine 201 177 183 147 142 Laguna Niguel 71 76 69 58 56 Newport Beach 136 95 99 87 90 San Clemente 160 146 144 140 148
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Some cities that gained HUD households in the last five years:
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1995 1996 1997 1998 1999 Brea ** 5 15 28 51 Buena Park 483 469 467 432 499 Fullerton 564 569 564 565 579 Stanton 192 200 189 192 227 Tustin 245 270 263 266 366 Westminster 822 1,000 981 1,073 1,366
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* This does not include the cities of Anaheim, Santa Ana and Garden Grove, which administer their own programs.
** Data not available
Source: Orange County Housing Authority
