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Section 8 & Rental Assistance: How They Affect Your San Diego Rental Property

Starting this August, most San Diego rental properties will be required to accept section 8 and other forms of rental assistance. It’s important to know what these programs are and how they affect your rental property.

This past August, the San Diego City Council issued a new ruling that affects property owners and property management companies across the city. Starting in August 2019, you are no longer able to deny section 8 vouchers or any other rental assistance programs as a reasonable source of income. All properties must treat applicants with government assistance the same as those without.

So what does this mean for your rental property? We’ll go over what rental assistance programs are and how you will be affected by them in 2019.

What is Section 8?

Section 8 is a form of government rent assistance. It was designed to assist low-income, elderly, and disabled people get adequate housing. Those that apply and are accepted into the section 8 program are given a voucher, which allows them to apply for properties that accept these vouchers (soon to be all properties in San Diego). Typically the government will pay up to 70% of the tenant’s rent, leaving the tenant to be responsible for the remaining 30%.

What is the new ruling on rental assistance?

In the summer of 2018, San Diego City Council ruled that property owners can no longer discriminate against section 8 or other housing vouchers as a form of income. The law expands to say that landlords are not allowed to refuse to enter into or renew tenancy due to source of income. This means that you cannot deny a section 8 tenant a lease renewal simply because they are on section 8.

You also cannot misrepresent the status of the property. For example, if a section 8 applicant wants to view or apply to a specific property, you cannot tell them that it is unavailable if it is open for applications. Additionally, you cannot have any advertisements or marketing for the property that insinuates or states that the property does not accept section 8 applicants.

Lastly, if the property owner or management company has any sort of rent-to-income ratio they use to select tenants, this ratio must incorporate the entire income, including any government assistance. The only other properties that are exempt from the ruling are those that are owner-occupied.

This new ordinance only applies to the area defined as the City of San Diego. Outlying cities and unincorporated areas are not affected.

How does rental assistance work?

When someone applies and is accepted into the section 8 (or other government housing assistance) program, they receive a voucher. This voucher enables them to apply to properties that accept those vouchers. Prior to the new ordinance going into place, these vouchers were only accepted at specified properties and landlords were allowed to refuse them.

When an applicant applies with a form of rental assistance, they are first processed the same way as any other applicant. You will still run a background check and review their sources of income, you will just include their voucher as a form of income. Once you approve them, there will be a few additional steps.

From here, the procedure can differ depending on what city or county your property is in. You’ll likely have to confer with the applicant’s housing specialist or counselor. For more information on city-specific programs and guidelines, click here.

Are section 8 tenants bad?

There is a common misconception that people on section 8 or other rental assistance programs are always unsatisfactory tenants. However, as previously stated, these tenants are still screened via your tenant screening process. This means that should they have a violent crime on their record, you can still deny them for that. Your standard rental criteria can still apply, so long as you do not discriminate against them for their income.

Can I evict a section 8 tenant?

Section 8 tenants do not receive special treatment when it comes to lease violations and evictions. If the tenant violates any part of the lease or does not pay their rent, they are still subject to an eviction notice.

Pros of Accepting Section 8 Tenants

Consistent Tenants

Typically section 8 tenants, once accepted into a property, stay there for extended periods of time. This can be a great thing if they pay their rent on time and don’t cause any issues for you. You’ll be guaranteed rent in a timely manner and won’t have to worry about replacing a tenant every year. Additionally, there is a years-long waitlist for section 8, meaning there won’t be a shortage of tenants.

Guaranteed Annual Inspections

The housing agencies are required to inspect the property at least once a year to ensure that the home is being maintained.

Guaranteed Payments

Because roughly 70% of the rent is paid by the government, you will always get this portion of the rent on time.

Additional Marketing Opportunities

Because you now accept rental assistance, there are new websites you can advertise your property on. This can lead to shorter vacancy and more applicants on each property.

Pre-Screened Tenants

To be accepted by a rental assistance program, the tenant has to be screen by the housing authority. This means that by the time they apply for your property, there has already been an initial screening test that they have passed. This initial screen is primarily to check for criminal record and past dues to a previous housing agency. You will still need to conduct your standard tenant screening, but this allows you to already have an idea of what this tenant is like.

Cons of Accepting Section 8 Tenants

A Portion of the Rent May Be Late

Since only the government’s portion of the rent is guaranteed, you may run into issues getting the remaining amount from the tenant if they encounter an issue. This can be a headache if it routinely occurs.

Security Deposit Issues

Rental assistance programs do not cover a security deposit, they only cover the monthly rent. If you want to collect a security deposit from your tenant, it will be entirely up to the tenant to pay it. This can result in a delayed payment.

Compensation for Damages & Repairs

If there is tenant-caused damage in the home, it can be a struggle to get the funds from the tenant to repair the issue. Again, the vouchers only cover rent payments, so anything outside of that (like repairs) fall strictly on the tenant’s income, which can result in delays or nonpayment.

We hope that we were able to provide some insight on rental assistance, section 8, and the upcoming San Diego law going into place. If you’re considering hiring a property manager to assist in managing your home, download our free guide to hiring a property manager.

If you found this article helpful, follow us on social media. We post daily tips to help you manage your own rental property:

Additional Resources

San Diego Housing Commission

SDHC Section 8 Fact Sheet

City Council Passes Ordinance Preventing Housing Discrimination

San Diego County Rental Assistance FAQ

Olivia

Content Marketing Manager at Good Life Property Management

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Hey guys, Adam Manley here, business development manager at Good Life Property Management. Today we’re going to be learning a little bit about and talking about Section 8, some of the things you’re going to need to know about and some of the frequently asked questions we get about the program. So let’s start with what is Section 8? Section 8 is a government-backed program that allows prospects that qualify and are approved for the program to be able to rent properties throughout the greater San Diego area. Typically the government will cover about 70% of the rent for the property, leaving the tenant to be responsible for the other 30%. What is the new ruling for housing assistance? So back in the summer of 2018, the City Council voted that we can no longer as property managers or landlords discriminate against those who have Section 8 vouchers as a form of housing income. So what that essentially means to you is that you need to open the property up to any Section 8 applicants as well. And you would no longer be allowed to tell them that the property does not accept Section 8 or that you can’t show them the property because you don’t allow Section 8. Essentially you would have to treat them as any other applicant and include the voucher as part of their housing income, just like someone with a standard paycheck or money in the bank. So one of the most commonly asked questions we’re getting about the Section 8 program is, will the housing commission tell you what you can rent your house out for? So the answer is really yes and no. Ultimately as the owner of the property you are still going to be responsible for pricing your own property, but the housing commission will give you a recommended rent range based on their own analysis. And again, that’s just going to be up to you whether or not to accept that or adjust that based on your own experience with your own property. The other thing to consider also is that if you’re planning on increasing the rent with a tenant that’s on Section 8, you do need to give them 60 day notice and submit an application to the housing commission about your intent to raise the rent at that particular property. The other thing to keep in mind also is that you can’t raise the rent for a non Section 8 tenant more than you could for a tenant that was on Section 8 just to let’s say get them out of the property for example. Another really commonly asked question we’re getting is how do I get paid? So the housing commission will direct deposit their portion of the check directly into your bank account on the due date of the rent. The rest from the tenants portion will be collected through whatever standard forms of rent that you accept whether that be check or if you have some type of online portal for the tenant to access and you’ll just collect that as normal. If the rent is late, you can still enforce normal late penalties as per your lease agreement with the tenant and everything stays the same in that regard. Another great question is can I ask for a security deposit? And again, the short answer is yes. Section 8 tenants are just going to be like every other tenant. So you can’t ask a normal security deposit amount. Generally good life we require equal to about one month’s rent. One thing to keep in mind is that you cannot charge a Section 8 tenant more than a security deposit just because they are using the voucher as part of their income. So something good to keep in mind there. Do the Section 8 vouchers expire? That’s another really great question. And again, the short answer is no, they don’t. The tenants can essentially remain on this program indefinitely as long as they are following the rules outlined by the housing commission. And all of the terms of the lease agreement. They can if they start, you know, if they get a really great job and start making sufficient income, they can leave the program at that point. But as long as they are following those things that I mentioned, they can stay on the program indefinitely. A lot of landlords are wondering if tenants on Section 8 can be evicted. And just like any other tenant you can move forward with the eviction process starting with the three day notice once the rent payment is delinquent. The only caveat here is you do also need to notify the housing commission of your intent to start the unlawful detainer process if you plan on evicting a tenant under the Section 8 voucher program. There is also an inspection process as part of the Section 8 voucher program. And it starts with an initial inspection. With this, a representative from the housing commission will come out to your property and inspect it, make sure it is habitable and safe for the incoming tenant. If your home fails this inspection, you have 30 days to repair or fix whatever was identified in that inspection or else they have to come back and start that process again. There is also a yearly inspection in the property where the member from the housing commission will come back to just try and keep up with some of those things that are related to habitability and make sure that the property is operating in the condition that it should be. Those are just a few of the really good questions and answers that we’ve been talking about with regards to Section 8 but we have a ton of great information on the subject. So if you’re interested in learning more, check out some of our blogs.