A friend of mine has a condo that he rents out on the south side of Chicago. Recently he contacted me with a question. The condo association had decided that it wanted to ban rentals to section 8 tenants. He wanted to know if this was legal.
The short answer? No. Section 8 voucher holders are a protected class in the City of Chicago. Condo associations must follow fair housing laws just like landlords, real estate agents and everyone else involved with residential real estate transactions.
But the question requires some unpacking of the ongoing war between landlords and government subsidized renters since the start of the Section 8 program.
What is the Section 8 program?
Section 8 Housing in Chicago is made up of multiple programs, including public housing projects and home purchase assistance for the poor. The part we're talking about is called the Housing Choice Voucher program, and it allows low-income renters to rent from normal apartments in the community with help from the government. It is called “Section 8” after the portion of federal law that created government-subsidized housing in 1937.
Voucher holders can rent in any apartment in the city that will have them. They pay the landlord a portion of the rent in proportion with their actual income. The government makes up the rest of the rent so that the landlord still gets the same amount as he or she would from any other renter.
Who are Chicago's Voucher Holders?
According to the US Department of Housing and Urban Development, here's some statistics on Chicago Housing Choice Voucher holders in 2015:
- 52,522 subsidized units were available, of which 86% were occupied.
- 107,943 people occupied these apartments. That's 3% of the population of Chicago.
- The average income of each rental household was $12,142 per year. 33% of that income came from wages, the rest from other sources such as social security, retirement saving or welfare.
- 83% of the households were run by a single woman.
- 97% of them were of a minority race. 88% were black.
- The average racial breakdown of the surrounding neighborhood was also 91% minorities.
- 46% of the units had children, but only 2% had 2 adults.
- 48% of the units had at least 3 bedrooms, 34% had 2 bedrooms.
- 35% were overhoused, meaning that they had fewer people living with them than the maximum their apartment would permit.
- They paid about $356 per month for their share of the rent. The government paid $871.
- They were on the wait list for an average of 5 months before being approved for their voucher.
Who rents without a voucher in Chicago?
Here's some statistics from the US Census Bureau about Chicago renters as a whole in 2014 to compare against the Section 8 statistics.
- 612,075 rental units were available, of which 92.5% were occupied.
- 1,381,357 people occupied these apartments.
- The median income of each rental household was $32743 per year.
- 20% of the households were run by a single woman.
- 53.1% of them were of a minority race. 36.9% were black.
- The average racial breakdown citywide is 51.6% minorities.
- 28.25% of the units had children.
- 24% of the units had at least 3 bedrooms. 36% of the units had 2 bedrooms.
- They paid about $963 per month in rent.
What's the problem with Section 8?
When I brought up the subject of problems with Section 8 in a conversation with my state rep, he shut down the conversation completely. Acknowledging that a renter is a voucher holder in any matter relating to housing access is illegal in Chicago. But there is no denying that it is a factor. In fact, it may be one of the few types of discrimination that's still seen as tacitly "acceptable" in the housing industry.
Most small private landlords get into the business looking for a passive investment – something that makes them money without them having to do anything. Renting to Section 8 tenants is not something for the passive investor.
Unlike other markers affecting protected classes that can be hidden from the landlord until such time as a tenant is already approved, there is no way to hide that a tenant is a voucher holder through the entire application process. Landlords have to go out of their way to house section 8 tenants. It takes longer to complete the deal due to the involvement of the government. While the CHA has made strides in recent years to shorten the amount of time needed, it can still take weeks or months to get a Section 8 tenant into a property.
The unit must be inspected. If it fails, the landlord must pay $75 to get in reinspected after fixing problems found by the inspector. Then the city must make sure that the rent requested is fair for the neighborhood. Once they're in, their unit must be inspected every year. Broken items that other tenants might allow to slide by without repairs must be fixed for Section 8 renters. This is all great for the renters and protects HUD from liability lawsuits. But it's more work for a landlord than would normally be needed.
The trade off? They're guaranteed at least the majority of the rent every month from the government. For a landlord who owns property in low income neighborhoods, accepting Section 8 renters can lower legal costs for non-payment related evictions.
The concentration of subsidized units in predominantly minority neighborhoods is in part tied to the time required to get the lease drawn up. There are many landlords I've worked with in mixed race neighborhoods that would have been happy to rent to voucher holders, but when faced with a choice between a renter that can move in immediately and one that will leave the apartment sitting empty for several months and might require them to make unanticipated fixes to the property, they'll opt for the non-subsidized renter.
But all of that doesn't explain why my friend's condo association wanted to ban Section 8. After all, they're not the landlords. This is a race issue and a class issue, plain and simple. Section 8 has become the equivalent of a racial slur in the US. It is a euphemism for low-income black residents. The response of the public – not just landlords, but neighbors and community members – is typical of what happens when a population is forced to confront the effects of systemic racial imbalances.
Stereotypes and Segregation
Humans create stereotypes instinctively and doing so is not inherently bad. The problem lies in how we react to those stereotypes, regardless of their accuracy.
The stereotypical Section 8 voucher holder is an unmarried, unemployed black woman with many children, who lets their drug dealing boyfriend, brother or son stay with them and commit crimes out of the apartment. The statistics of voucher holders definitely imply that the stereotype is not far off.
Voucher holders cannot have criminal records and are screened before they're approved for a voucher. There's no accounting for their family, though. A disproportionate number of black Americans have criminal records – 25% of black adults vs 6.5% of all adults. Just over a third of the Section 8 renters have space in their apartments for more people than HUD has on the books.
This is a chicken/egg cycle. Landlords outside of low income minority neighborhoods don't want to let residents of those neighborhoods move up and out, believing they are criminals because of where they live. This forces those who want to get out to stay in environments that are dominated by gangs, tempting them into criminal lifestyles that they might otherwise avoid.
Case in point - after Hurricane Katrina, many New Orleans residents were rehomed throughout the country with help from the Section 8 voucher program. Some of them came to Chicago. During that era, I had no difficulty placing these voucher holders with landlords throughout my territory. As soon as they left the pool of voucher holders, though, I started getting pushback from landlords on Section 8 applicants again.
Staple of Survival or Status Symbol?
At the core of the matter is the cultural difference in how different economic classes view real estate. For the landlord, it's an investment and a commodity. For the resident of a mid-to-high income neighborhood it's a home, an investment and a status symbol. For all of us, but especially for the residents of low income neighborhoods, it's a necessity of life.
The government agencies that manage Section 8 can streamline their processes and that might help somewhat, but the core “not-in-my-backyard” attitude will not go away until a way is found to surpass the underlying cultural conflict. We would have to eliminate the status that comes with real estate in order to eliminate segregation. Something tells me even a conversion to a completely socialist economy with equal housing for all would not prevent human nature from equating better housing with genetic superiority.
Section 8 will be problematic in this country until one of two problems are solved. Either the system makes it so that Housing Choice Voucher holders cannot be detected in the course of the application process, or we resolve our issues with race and class entirely.
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