Phoenix will give landlords a $500 signing bonus if they agree to rent to low-income tenants.
The city is trying to beef up its Section 8 housing assistance program to prepare for more housing insecurity spurred by the COVID-19 pandemic.
Phoenix's housing department has set aside $500,000 of COVID-19 relief funds from the federal government to use as a cash incentive to encourage more landlords to participate in the housing program.
The city has funding for 275 Section 8 vouchers, which provide rental assistance for people in the very-low-income bracket — an individual who makes less than $25,500 per year or an annual income of $36,450 for a family of four.
People who qualify for a voucher are responsible for finding their own apartment or rental home. Often they struggle to find landlords willing to accept their vouchers either because of stigma or because they can charge higher rents to other renters.
What is the Section 8 voucher program?
The Section 8 Housing Choice Voucher Program is designed to provide people who need housing assistance with more options.
Traditionally, people who needed housing assistance were housed in government-owned housing projects.
While some of those housing programs still exist, there's been a shift toward housing vouchers instead, which allow low-income renters to choose where they want to live and use their government subsidy at any apartment complex, condo or single-family home that works for their family.
Renters who qualify for the Section 8 voucher program typically pay 30% of the household's monthly income toward rent and the government makes up the difference.
While the voucher program allows for more flexibility for renters, it only works if there's enough private landlords willing to accept vouchers.
Phoenix has funding for 275 vouchers, but typically only about 220 renters are using the vouchers at any given time, Phoenix Housing Director Cindy Stotler said.
Part of that is because there is a significant amount of turnover with vouchers, she said. But the lack of landlords who are ready and willing to accept vouchers also plays a role.
Why is it hard to find landlords?
Stotler said there are a number of reasons why landlords choose not to rent to voucher-holders, and most of them are fueled by the hot housing market.
The Phoenix housing market is short 163,000 units, according to a recent city survey. The shortage is driving the demand — and cost — of housing up.
"When there's a housing shortage, the rents go up because they can," Stotler said.
If landlords can raise the rents beyond when the government will subsidize with a voucher, they likely will.
Additionally, landlords have to fill out more paperwork and get an inspection to participate in the Section 8 program. If there are renters who don't require this extra work, landlords will probably choose that renter, Stotler said.
There is also a negative stigma attached to people who need housing assistance. Some landlords think people with vouchers are "criminals or low-lifes who can't take care of themselves," Stotler said.
"There are a lot of working people that need housing assistance," she said. "There's a lot of people on vouchers that could be your grandma, your aunt, people with disabilities or single moms."
Stotler said she's excited about the new $500 incentive program. She said the cash may encourage people who've never participated in the Section 8 housing program to realize that the renters are no different than typical renters.
The city will also give $500 to current Section 8 landlords who renew leases with renters. Stotler said it's important to maintain current landlords, especially during the fragile economy created by COVID-19.
The initial incentive program is funded with one-time COVID-19 relief money from the federal CARES Act, but Stotler said that if the program is successful she will seek other funding to continue it.
Reach the reporter at jessica.boehm@gannett.com or 480-694-1823. Follow her on Twitter @jboehm_NEWS.
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