Landlords call new Section 8 law costly

But housing advocates applaud tenant protection

Apr.April 29, 2008 05:49 PM

City landlords say a new law that makes it illegal for them to turn away tenants who use Section 8 vouchers to pay their rent is going to cost them both time and money.

“I have two people who work full time in my office whose sole responsibility is to deal with tracking money owed by Section 8,” said Mark Engel, who owns 8,500 units, about 1,500 of which are rented to tenants using the voucher system.

“It places an unfair burden on property owners,” said Engel, whose apartments are in four boroughs of New York City and in lower Westchester. “We’re a large company, and we can handle it. A smaller owner can’t carry the arrears or keep up with the paperwork.”

The law passed the City Council in late March and was implemented immediately. Mayor Michael Bloomberg, who vetoed the law before the council overrode him, said that while he supports the expansion of the Section 8 subsidy program, this approach unfairly turns a voluntary federal program into a mandatory one.

The vouchers, issued by the Department of Housing and Urban Development and administered by local agencies, pay landlords up to 30 percent of a tenant’s monthly adjusted gross income for rent and utilities. To qualify in the city, the current income threshold is around $38,000 a year for a family of four. The tenant makes up the difference in the rent of the market-rate unit.

While housing advocates have applauded the move as a groundbreaking measure that will give lower-income tenants more options, the landlord community is looking into the possibility of a legal challenge. New York City currently has roughly 85,000 Section 8 residents and expects to add another 22,000 to the system.

“We think there are grounds for legal action, but we haven’t determined if we will proceed,” said Frank Ricci, director of government affairs at the Rent Stabilization Association, which represents landlords.

The chances of overturning the law seem unlikely. Several other cities (including Washington, D.C., and Chicago), along with the state of New Jersey, mandate that landlords accept Section 8 vouchers. Court rulings have upheld state and local laws.

Engel said he knows of several Section 8 horror stories, like the tenant who refused to allow access to an apartment even though it needed significant repairs. While the tenant held out, the voucher payments ceased, and the landlord lost six months of rent.

Engel also said some annual lease renewals aren’t processed for two or three years, and the voucher payments don’t reflect the increases. He noted the new law, which allows tenants who believe they have been victims of discrimination to file a claim before the city’s Commission on Human Rights, has negative implications for all landlords.

“I’m concerned about if I turn down tenants for bad credit or for not paying rent, and before we get to housing court, they take me to the commission and blame it on Section 8 — and not the real reason why they’ve had housing problems,” Engel said.


Related Articles

arrow_forward_ios
Matt Lauer exposes Hamptons estate to the market
Matt Lauer exposes Hamptons estate to the market
Matt Lauer exposes Hamptons estate to the market
 Fredrik Eklund and the property (Getty, Steve Frankel)
Fredrik Eklund lists Bel Air mansion for rent as family moves to “forever home”
Fredrik Eklund lists Bel Air mansion for rent as family moves to “forever home”
Gordon Ramsey and his Lucky Cat restaurant (Lucky Cat)
Gordon Ramsay to open first South Florida restaurant in Miami Beach
Gordon Ramsay to open first South Florida restaurant in Miami Beach
Developer Bill Hutchinson, seen here in court and alongside his mugshot (Getty, Highland Park Police Department)
Facing assault charges, developer sells Miami home, lists Cali properties
Facing assault charges, developer sells Miami home, lists Cali properties
Hong Kong Stock Exchange (Getty)
Investors sell off Chinese real estate stocks
Investors sell off Chinese real estate stocks
Robert Durst (Getty)
Robert Durst convicted of murder
Robert Durst convicted of murder
Pennsylvania town offers big incentive for people to fix homes
Pennsylvania town offers big incentive for people to fix homes
Pennsylvania town offers big incentive for people to fix homes
Credit Suisse Group partners with MARK on $1B-plus rental housing fund
Credit Suisse Group partners with MARK on $1B-plus rental housing fund
Credit Suisse Group partners with MARK on $1B-plus rental housing fund
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...