Rent Subsidies Hampered by Tight Market
Southern California’s rental market is so tight that thousands of people are seeking federal rental subsidies even though fewer landlords accept them.
The Orange County Housing Authority expects 15,000 people to apply for housing assistance when it reopens its waiting list June 1. But housing officials estimate that just 77% of those who receive the subsidy, known as Section 8, will find a landlord who accepts it.
The Los Angeles Housing Authority said only half the recipients in the city will be able to find landlords who take the subsidy. A decade ago, about 90% of the eligible renters in the two counties found apartments.
Housing officials say the cause is obvious--money. Because of the flood of prospective renters willing to pay top dollar, more landlords are snubbing subsidized tenants. The vacancy rate in both counties is a minuscule 3%.
“In the early 1990s, there were lots of vacancies. Section 8 was welcomed. There were incentives, even TV sets, for people to move in. That’s not heard of anymore,” said John Hambuch, a manager at the Orange County Housing Authority.
Section 8, a federal program created in 1974, allows recipients to pay 30% to 40% of their salary for rent; federal funds from the U.S. Department of Housing and Urban Development, administered locally, pay the landlord the rest.
In Orange County, a family of four can earn no more than $36,850 annually to qualify for Section 8. In Los Angeles County, that family is limited to about $27,000.
Charles Isham, vice president of the Apartment Assn. of Greater Los Angeles, said landlords have become less receptive to the program because the Section 8 bureaucracy is “squeezing owners for less rent.”
Building inspections by “overbearing and officious” housing authority officials and delayed rental payments also have made accepting Section 8 renters more of a burden, he said.
Of the 18,000 Los Angeles landlords last year, 3,000 had opted out of the program, leaving “swaths” of the city where vouchers are no longer accepted, said Steve Renahan, Los Angeles Housing Authority Director of Section 8.
“More and more owners are saying no,” said Renahan, acknowledging that recent bureaucratic changes to the program have made more apartment owners “take a look at their options.”
About 7,600 households in Orange County and 40,000 in the city of Los Angeles receive Section 8 subsidies.
Because demand for the assistance has far exceeded the supply, tenant advocates like Larry Gross, director of the Coalition for Economic Survival, said more tenants are seeking legal help. The tenants are being evicted because apartment owners are no longer accepting Section 8.
In April, Blanca Sanchez, 42, and husband Javier Ovieto, 39, of Hollywood received notice that their Section 8 subsidy would no longer be accepted--and that their monthly rent was jumping from $750 to $1,356.
The couple, who depend on Section 8 to pay half the rent on the two-bedroom apartment on Yucca Street, are scraping to provide for three teens and a new granddaughter. Ovieto is unemployed and looking for a restaurant job, and Sanchez works in a welfare labor-training program. “I don’t know what to do,” said Sanchez, whose Spanish was translated by her daughter Leslie. “I have no money for a down payment. I have to move all of my family.”
The family of six has lived in the Hollywood apartment for seven years.
In south Orange County, many landlords no longer participate in the program. Countywide, most apartment complexes limit the number of Section 8 units to one or two.
Even so, Orange County housing officials expect a relative stampede when the agency reopens its waiting list in June--a list that is opened to new applicants only every few years. Demand is heavy because the average rent in the county hit a record $1,166 in 2000.
Section 8 was envisioned as an alternative to conventional public housing projects and was designed to give low-income families the freedom to choose their homes with rental assistance from the government.
In 1999, the last time the Orange County Housing Authority opened its waiting list, 7,500 people applied--and the two-week enrollment period was not well-publicized, Hambuch said. “[Section 8] could be a lifesaver for a lot of families. It could be a way for them to stay in the county instead of leaving the area.”
The agency decided to reopen the waiting list again in June because only 1,500 names remain on the current list--and many of those people may no longer qualify or may have moved. The county also has received 740 more Section 8 vouchers this year because of increased federal funding, Hambuch said.
People apply by mail and are assigned a random number to have their case reviewed; such a system cuts down on lines, Hambuch said. The disabled, senior citizens, working families and current Orange County residents receive priority.
The Los Angeles Housing Authority uses a different system. Since 1998, the agency has kept an open waiting list--adding applicants as they come in. The list currently stands at about 130,000, so long that some applicants might not get the aid until 2007, officials said.
