Navigating the Private Rental Market

1. Navigating the PrivateRental Market Gale Schwartz, Housing Alliance of Pennsylvania Cheryl Johns, Altoona Housing Authority Judith Axler, HUD Philadelphia Office of Public Housing

2. MISSION The Housing Alliance is a statewide coalition working to provide LEADERSHIPand a COMMON VOICE for policies, practices and resources to ensure that all Pennsylvanians, especially those with low incomes, have access to safe, decent and affordable homes. We promote common-sense solutions to balance Pennsylvania's housing market and INCREASE THE SUPPLY OF SAFE, DECENT HOMES for low-income people.  CORE ISSUES * Affordable Rental * Blight / Land Banks * Homelessness * Homeownership * Healthy Housing

3. Pennsylvania’s Go-To Resource For Building Knowledge and Skills What we do Research and Information Services Education, Training, and Technical Assistance Outreach and Civic Engagement

4. Rental Housing in Post Crash World • Vacancy rates at lowest levels since 1985 • Rents rising at an annual rate of 3.5% • Diminishing resources for constructing affordable housing • Loss of existing affordable housing

5. Rental Housing in Post Crash World • Hot markets = owners have incentive to upgrade units for higher rents/sale • Weak markets = owners lack revenue; little incentive to maintain units • Tight markets = self reporting code enforcement systems less effective

6. Changes in Programs to Support Low Income Renters • Move away from facility based programs to tenant based programs • LIPH Demolitions resulted in increase of Section 8 vouchers • Transitional Housing conversions to Rapid Re-Housing • Mixed income communities with less affordable units • Impacts • Lots of “Vouchers” on the street • Government agencies do not want to own property • High turn back rates of vouchers, especially in the city • Need for partnerships between public and private (landlords, developers, CDC’s)

7. Changes in the Pittsburgh Market

8. The Local Market • Demolition of Subsidized Housing • Loss of subsidy due to low REAC • Move to Market of Project Based Section 8 • Condemnation/demolition of NOAH with mass displacement • Increase in luxury rentals • Housing Quality of older stock

9. Goals • Identify ways to better engage landlords to cultivate a pipeline of ready and available units to lease to people with high barriers to housing • Understand the local rental market and the driving forces behind business decisions • Look for opportunities to make a business argument versus a charitable argument for work with rental assistance programs

10. Year 1: Engage Small to Mid-Size Landlords • Landlords know programs are out there • If they are working with program, likely working with multiple • They want to hear from and listen to other landlords • They are social- Give ample time for networking • They will spread the word- good or bad • They are willing to compromise when they feel supported • There is a lack of resources to support this part of the market

11. Year 2:Focus Groups: Take-Aways • Well established network of private financing • Margins are significantly smaller than expected • Main appeal - autonomy & financial security • Will go to great lengths to protect investment

12. Focus Groups: Main Themes • A Support Person is Key • Retain some Flexibility / Control • There is as much stigma around landlords as there are tenants • Want to be viewed as a partner in the process. • Risk Mitigation and Vacancy payments as incentives

13. Year 3:Landlord focused resources Landlord Risk Mitigation Fund • For landlords housing a tenant who is working with a local non-profit service provider, but worried that the tenant will cause damage, skip out on the rent, or otherwise cause you to lose money? What is the Landlord Risk Mitigation Fund? • An additional Security Deposit that can act as insurance in case of excessive damage caused by a tenant. • A fund to help off-set vacancy loss caused by abandonment • Extra “peace of mind” that can allow you to take a chance on a tenant who participates in a housing assistance program that may not look good on paper or who has failed your screening criteria.

14. Year 4:Housing NavigatorUnit Tenants Service provider works with tenant to offer supportive services and possible rental subsidy while tenant is in unit. Landlord and tenant enter into a rental agreement. Three-way agreement between service provider, tenant and landlord. Service Provider supports both tenant and landlord being the first point of contact for any tenant related matters. Landlords Service Providers HN serves as intermediary between Service Provider and Landlord to ensure consistent communication and offer support where needed. Landlord provides HN with available rental units for clients. HN works with Service Providers to connect their tenants to Landlords with available units. Housing Navigator (HN)

15. Altoona Housing Authority Landlord Education & Recruitment Techniques Homes Within Reach Conference October 30, 2018

16. Overview of Section 8 Voucher Program • The AHA is responsible for administering the Section 8 rental assistance program within the City limits of Altoona. Staff is responsible for monitoring tenant and landlord compliance with program regulations. • The Section 8 Housing Choice Voucher Program provides rental assistance in the form of a voucher to low, very-low and extremely-low income families, singles, senior citizens, and disabled individuals. • The unit MUST pass Housing Quality Standards (HQS) Section 8 inspection before it is Section 8 approved and a lease can be signed.

17. Rent Determination • Fair Market Rent (FMR) is an amount of monthly rent established based on HUD’s annual data. • The AHA conducts an annual utility allowance (UA) analysis by a 3rd party Consultant to determine utility allowances. • Fair Market Rent (FMR) – Utility Allowance (UA) = Contract Rent (CR) • The AHA will also conduct a rent reasonableness survey to establish that the landlord requested rent is comparable to other rents in the surrounding area, and that the rent is the same for unassisted tenants. • ******Contract Rent (CR) will be paid at the lower figure of the rent requested by the landlord, the FMR or the rent reasonableness.

18. Security Deposit (SD) • Owner may collect a security deposit from the tenant. • When the family moves from the unit, the owner, subject to State Law, may use the SD, for rent or charges owed. • Owner is responsible for providing an itemized move out statement indicating charges against the security deposit within 30 days of the move. • Voucher holders are told at the Section 8 voucher meeting NOT to pay SD until the inspection passes.

19. Lease Enforcement • All landlords Required to provide the AHA with a copy of the lease *******LANDLORDS ARE RESPONSIBLE FOR LEASE ENFORCEMENT!!!!!!!******** • Authority is NOT a party to the lease

20. Rent Increases • The request to increase rent must be sent to both the tenant and the Authority 60 days prior to the anniversary date of the HAP contract • Rent increases must meet rent reasonableness • Landlords cannot increase tenant rent prior to Authority review and approval *****TENANTS CANNOT PAY THE DIFFERENCE****

21. Three-Way Partnership • The Housing Choice Voucher Program is a Three-Way Partnership between the Housing Authority, the Family and the Landlord (Owner of the Property) Section 8 HAP Contract Voucher Landlord Tenant Residential Lease

22. Authority’s Role • Determine eligibility of the applicant ***(CRIMINAL SCREENINGS ONLY)**** • Explain the rules of the program to all adult members • Approve the unit based upon HQS regulations • Make Housing Assistance Payments (HAP) • Ensure that both the family and the unit continue to qualify under the program • Ensure that the owner and family comply with the program rules and regulations

23. Family’s Role • Provide the Authority with complete and accurate information • Make the best effort to find a place to live that is suitable and qualifies for the program • Cooperate in attending all appointments scheduled by the Authority • Take responsibiliity for care of the unit • Comply with the terms of the lease with the owner • Comply with the family obligations of the voucher

24. Owner’s Role • Screen families who apply to determine if they will be a good renter. Be CONSISTENT with criteria used for screening eligibility • Comply with fair housing applicable laws and DO NOT discriminate against anyone • Maintain the unit based upon HQS regulations and make necessary repairs in a timely manner • Comply with the terms of the HAP contract with the Authority • Collect the rent due by the tenant • ENFORCE THE LEASE *****

25. Techniques to Recruit Landlords • Educational Workshops to include: Importance of Rental Inspections Veterans Housing Rent Reasonableness Marketing Working with Local Police Dept. Fair Housing Regulations Proper Eviction Process Home Modifications Becoming Involved with Landlord Association

26. Housing Market Analysis • Included in your packet is data showing number of housing units in the City of Altoona along with Housing Market Analysis for your review.

27. Questions Altoona Housing Authority 2700 Pleasant Valley Blvd. Altoona, PA 16602 (814) 949-2000 www.altoonahousing.org

28. Landlord Acceptance of Housing Choice Vouchers

29. New HUD research on landlords A Pilot Study of Landlord Acceptance of Housing Choice Vouchers • Urban Institute: Mary Cunningham, Martha Galvez, Claudia Aranda, Robert Santos, Doug Wissoker, Alyse Oneto, Rob Pitingolo, James Crawford • https://www.huduser.gov/portal/pilot-study-landlord-acceptance-hcv.html Urban Landlords and the Housing Choice Voucher Program • Philip Garboden (University of Hawaii), Eva Rosen (Georgetown University), Meredith Greif (Johns Hopkins University), Stefanie DeLuca (Johns Hopkins University), Kathryn Edin (Princeton University) • https://www.huduser.gov/portal/publications/UrbanLandlords.html

30. A Pilot Study of Landlord Acceptance of Housing Choice Vouchers Do landlords accept housing vouchers? Do landlords treat housing voucher holders differently than similar renters? Does landlord treatment of voucher holders vary by race/ethnicity, or high/low-poverty?

31. Philadelphia was 1 of 5 Test Sites Fort Worth, TX Philadelphia City and Bucks County, PA TX PA Los Angeles, CA Washington, DC CA DC Newark, NJ NJ

32. Fair Housing Act Is it is illegal for landlords to refuse to rent to voucher holders? Landlords are prohibited from refusing to rent to members of protected classes (race, color, national origin, sex, religion, disability and familial status). Source-of-income protection Philadelphia – yes Bucks County – no

33. Study Methodology Sample – A random sample of available rental units selected to match geographic distribution of voucher affordable units. Ad Screening - Ads from online sources reviewed to identify potentially voucher-eligible units. Voucher Acceptance Test - If a unit meets the rental cap and is available, the voucher acceptance test is conducted.

34. Results Testers screened an average of 39 advertisements to identify a potential unit. The average number of ads screened ranged from more than 50 to 11. Philadelphia was the lowest Only 11 ads had to be screened before finding a potentially eligible unit.

35. Findings Overall Evidence of voucher denial in all sites, but denial rates vary widely. Denial rates overall ranged from 34% to 76%. Philadelphia was in the middle 67% of landlords in Philadelphia refused to accept vouchers overall.

36. Findings in Low-Poverty Areas Voucher denials are more common in low-poverty areas than in high-poverty areas. Denial rates in low-poverty areas ranged from 16% to 85%. Philadelphia was on the high side 83% of landlords in Philadelphia low-poverty neighborhoods refused to accept vouchers.

37. HUD Landlord Listening Sessions • Washington, Philadelphia, Atlanta, Dallas, Salem (OR), Salt Lake City, Los Angeles • Invitation to Landlords in the community • Small focus groups in several cities

38. Results from Philadelphia Session • Better training for landlords on their responsibilities under the program is needed • Improved communication between landlords and Housing Authorities is needed, including more use of email/computer tracking • Standardization/more detailed descriptions of Housing Quality Standards is needed

39. Revised Program Regulations? • Draft Regulations • Publication in Federal Register • Public Comment Period • Final Rule Issued • HUD Notices Issued

40. Q & A: The Best Part!

41. Thank You! • Gale Schwartz, Housing Alliance of Pennsylvania • gale@housingalliancepa.org • Cheryl Johns, Altoona Housing Authority • Cheryl.Johns@altoonahousing.org • Judith Axler, HUD Philadelphia Office of Public Housing • judith.r.axler@hud.gov