Agents promised commissions for voucher deals say city leaves them hanging

Working as a rental agent with voucher clients often means championing your clients to management companies and micromanaging the city’s inspection process.

It means endless back-and-forths via email explaining the voucher process and keeping track of different case managers, all while your client’s life hangs in the balance. 

All that for relatively little pay and appreciation. 

Or, in some cases, no pay at all. 

Mike Jeneralczuk, an agent at Real New York, says the city owes him and his team of three other agents roughly $40,000 for voucher deals he worked on last year and for which it simply refuses to pay.

“The big sticking point is it seems with CityFHEPS and the Human Resources Administration, after the lease is signed and the checks are sent out to the landlord, we are never able to reach anybody,” said Jeneralczuk.

It’s not just Jeneralczuk. Agents from other firms reported a similar experience, saying that the Department of Social Services (DSS), which includes HRA, routinely refuses to pay them for deals they represented, even though agent fees account for a tiny percentage of the hundreds of millions of dollars the city spends on vouchers each year. Meanwhile, the City Council has sued Mayor Adams over his refusal to implement an expansion of the very voucher program they find so dysfunctional. 

For agents, uncertainty around payments puts them between a rock and a hard place. Agents can either take on a voucher case, for which there’s no guarantee they’ll get paid, or risk running afoul of fair housing laws, which could incur a costly lawsuit or a fine or ultimately cost them their license.

There’s already little incentive for agents to take voucher clients — aside from the legal obligation — even when pay is on time. Brokers often get the blame in the court of public opinion for problems with the voucher process, a notion reinforced by a slew of fair housing discrimination lawsuits. 

But in many cases, agents say they fight for their clients as they watch overly stringent inspections disqualify apartments or see clients being evicted because the city stopped payment during their lease. 

Agents are generally extremely hesitant to speak on the record about issues with voucher programs, for fear of saying something deemed discriminatory by the state’s broad fair housing laws. But executives from two other rental firms said the city’s blatant refusal to pay for voucher deals is a recurring issue for their agents. 

“If an agent hears a customer has [a voucher] and they don’t think they’re getting paid, it’s a lot harder for them to prioritize that,” one executive said. “There’s definitely a weaponization of the voucher against the agent.”

There’s also no recourse for agents when they run into problems, said an executive at another firm, speaking on condition of anonymity. 

“Like most things that have to do with the programs where there’s a ton of bureaucracy, there’s very little transparency, and you don’t really know who to call when something goes wrong,” the executive said.

In some cases, the city simply ignores pleas for payments, even while representatives continue corresponding with an agent about other facets of the deal, a different executive said. 

In other cases, the city claims there’s no record of the agent representing the apartment, despite months of email correspondence. Then there are times when the city claims payment was mailed, but when it doesn’t show up, nothing happens.

“There’s no tracking, there’s no FedEx, if [checks] get lost, they wait a certain amount of time to reissue them,” said a rental agent, who declined to speak on the record. The agent added that DSS won’t let agents pick up checks in person. “There’s really no paper trail.”

Agents’ cut

Voucher programs are aimed at solving housing insecurity for different populations. Agents help voucher holders find places to live — the same as for a client without a voucher — and take a cut for their work.

Most of the city’s voucher programs are administered by the Human Resources Administration, which is part of the Department of Social Services and overseen by the department of Housing Preservation and Development. Federally funded Section 8 is typically associated with the New York City Housing Authority, but HPD and New York State Homes and Community Renewal — a state department — also administer some vouchers.

Rules within each program govern specific voucher use. Section 8 Housing Choice vouchers subsidize rents for low-income residents, while other vouchers are tied to a particular unit. Jeneralczuk said Section 8 vouchers offer an agent commission if funds are available. Similarly, some CityFHEPS vouchers keep people in their homes when facing eviction, while others are designed to find homes for people without them.

Because of the varied commission payments and voucher values, it’s difficult to say how much money agents stand to make on a yearly basis from voucher program commissions. The Department of Social Services said that “there is so much variety in household size and income that it would be difficult to estimate the total amount of commissions.”

“When someone comes to you with a [voucher] … you want to see that person get an apartment. On the flip side, you want to get paid.”
Mike Jeneralczuk, agent at Real New York

Open City data shows that 20,000 people received initial placements via the CityFHEPS program into 10,000 apartments. In a hypothetical scenario where the typical voucher covered rent for a family of two, an average voucher would have paid up to $2,184 per month in rent last year, utilities excluded. That would translate into an estimated $39 million in commissions for the program in total. 

“If it all works as it should … we could get paid when the client moves in,” said a rental agent. 

But if they don’t get paid, they can’t walk away.

Broadly speaking, fair housing rules prohibit agents from steering people into — or away from — a particular area based on their race, ethnicity, religion, disability, nationality or disability. The law also prevents agents from denying service to legally protected groups, including voucher holders. 

Still, confusion around fair housing systems is common. That was evident in exhibits submitted as evidence in a fair housing lawsuit filed last summer against Douglas Elliman and 30 of its top agents. 

The plaintiff, Shaniqua Newkirk, alleged that the agents either turned her away or ignored her because she had a Section 8 voucher. 

“I really don’t know what Sec 8 voucher is?” Elliman agent Diane Johnson wrote to Newkirk in an email.

Agents aren’t the only ones who report trouble with vouchers. Rental payments sometimes mysteriously stop during a tenant’s lease.

Overly stringent inspections of homes for voucher holders often disqualify apartments over inane flaws, which result in significant move-in delays. 

Having voucher holders in a building can also raise insurance costs for landlords, further disincentivizing their cooperation. 

“Is there any update?”

Email correspondence illustrates Jeneralczuk’s frustration with the city.  

In one instance, Jeneralczuk spent months playing go-between with a building manager and the city when a client’s move-in was held up over delayed rent checks, according to emails reviewed by The Real Deal. The manager would ask when payment was coming, then Jeneralczuk would get an updated response from the case worker and he would relay it to the manager. 

After almost two months, the managing agent suggested the delay might cause the deal to fall through. Jeneralczuk reminded him that doing so would be illegal. His client eventually moved in last fall.

Getting paid for his efforts proved even more difficult. Jeneralczuk’s check was initially held up around early October because of outdated information on his request form. He re-sent the form several times, but the case worker stopped responding on October 10.

“Checking in here as we haven’t heard anything since October,” he wrote in an email dated December 29. “Is there any update for this check?”

When approached for comment, the Department of Social Services initially offered to look into a handful of cases for apartments that Jeneralczuk represented and for which he claimed he had not been paid. For one deal, at 630 Lenox Avenue, DSS representative Neha Sharma said she couldn’t find the unit in question. After she was provided a link to a StreetEasy listing for the apartment, Sharma didn’t respond for roughly nine weeks. Eventually, she explained that not all broker payment delays were the fault of the city. 

“Note that landlords and clients also have obligations,” she wrote. “For example, clients need to ensure they renew their CityFHEPS vouchers in a timely manner, and sometimes landlords might have the wrong address on file/failed to update their info for payments.”

An executive at another firm said agents there recently did a handful of voucher deals for which they don’t expect to be paid. 

“The communications that I’ve had with administrators at NYCHA have been unfriendly,” the exec said, speaking generally. “There’s this feeling they just don’t want to hear it.”

Jeneralczuk said his experience has left him feeling a “strong disdain” for the city government because “it’s open hunting season on landlords and brokers in general.”

“I think it’s a hypocrisy when it comes to the number of agents having fair housing violations because it’s the product of a system that’s broken,” he said. “Unless you’re an absolutely evil person, when someone comes to you with a [voucher] … you want to see that person get an apartment. On the flip side, you want to get paid.”