Landlords in Sacramento are offered thousands of dollars to rent to low-income families

On any given day, there are about 700 families in Sacramento County who have a voucher for subsidized housing but cannot find a landlord who will accept it.

A lack of affordable housing in Sacramento and reluctance from some landlords has led to voucher holders waiting between four and five months to find a new home. Another roughly 30,000 low-income families are on waiting lists just to receive a voucher.

For Sarah O’Daniel at the Sacramento Housing and Redevelopment Agency, “it really shows me the need for affordable housing.” Thousands of low-income people eligible for the Housing Choice Voucher program, more commonly known as Section 8 housing, are couch-surfing, homeless or burdened with rent payments they can’t afford, she said.

But with a boost of money from the CARES Act, SHRA has started a new program to remedy the longstanding problem. Since July, the agency has been offering a $2,500 bonus to landlords who want to join the voucher program, and a $2,000 bonus to landlords who previously accepted vouchers but had stopped.

The $500,000 program is a “cost-effective solution,” said O’Daniel, director of Housing Choice Voucher and Homeless Innovation at SHRA. Significantly cheaper than building new affordable housing units from the ground up, landlords get steady rent payments and low-income families can use their vouchers — all during precarious financial times induced by the coronavirus pandemic, she said.

“It’s created a win-win outcome,” O’Daniel said.

Other cities in California and around the country have offered similar programs. It’s the first time SHRA has created such an incentive program, O’Daniel said.

So fa,r 37 landlords have signed up, O’Daniel said, with each landlord opening up one unit for a family or person with a voucher. Homeless residents have been prioritized for moving into the newly available homes, she said.

In tight housing markets, voucher holders have more trouble finding homes that accept them. Under the federal program, the voucher covers a portion of the monthly rent and utilities under a certain cap, while the tenant pays roughly a third of their income to cover the rest.

As of this year, rental property owners in California can’t deny an application from someone just because they have a housing voucher. Still, there’s a lot of “negative stigma” around the program, O’Daniel said. And as rents continue to climb in Sacramento, landlords can often set rents above the voucher’s rental cap.

While the new incentive program has been effective, more affordable permanent housing needs to be available in the county, O’Daniel said.

But building new affordable housing in the state is an expensive process. According to the Terner Center for Housing Innovation at UC Berkeley, building a 100-unit affordable housing project in California cost nearly $42.5 million in 2016.

SHRA hopes to have at least 75 landlords signed up by the end of this year, and up to 150 by the end of next year when the CARES Act money must be spent by, O’Daniel said. “We would love to have as many landlords as possible,” she said.

A landlord can receive the bonus whether they accept a voucher for one of their units or multiple units. O’Daniel said the agency is hopeful that some of the landlords who receive the bonus and own multiple properties will make several units available to voucher holders, so that if 100 landlords have signed up, “not only are you helping 100 families, but 300 families,” she said.

This story was originally published October 17, 2020 at 5:00 AM.