The Berkeley Rent Board Mailbag
Q: What is Section 8? What advantages are there for a landlord?
The Section 8 rental voucher program is a federal program operated by the U.S. Department of Housing and Urban Development (HUD) that provides assistance to very low-income families, the elderly and the disabled by paying a portion of the tenants' rent directly to the landlord. The name refers to Section 8 of the United States Housing Act of 1937, which was added by the Housing and Community Development Act of 1974. The Berkeley Housing Authority administers the Section 8 program locally.
Tenants who are found eligible for the program are issued a voucher (formerly called a certificate) and are then responsible for finding a rental unit that meets minimum health and safety standards, as determined by the housing authority. If the landlord agrees to rent to the tenant and to participate in the Section 8 program, the landlord enters into a Housing Assistance Payment (HAP) contract with the local housing authority. The housing authority pays the landlord the difference between 30% of the tenant's household income and the "fair market rent" (FMR) for the local metropolitan area, as determined by the housing authority based on HUD standards. The total rent agreed to by the landlord and tenant may actually exceed the FMR by an amount equal to 10% of the tenant's household income.
Owners executing their first HAP contract are briefed individually about the roles and responsibilities of the participants in the program. The landlord and tenants also sign a one-year lease that runs concurrently with the HAP contract. After the first year, the landlord may initiate another lease or allow the family to remain in the unit on a month-to-month basis. The program is entirely voluntary for the landlord who may "opt out" of the program upon the expiration of the HAP contract, after giving at least 90 days notice.
For a landlord, the principal advantage of participation in the Section 8 program is the assurance that the majority of the rent will be paid on time by the housing authority. Because the tenant's portion is relatively modest, the tenants are usually able to pay their share on time as well. Section 8 housing is also exempt from most provisions of Berkeley's rent control law, which means the landlord may obtain a market rent for a unit that would otherwise be controlled.
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