HUD’s rates don’t cut it in Santa Monica
CITYWIDE — Landlords who offer apartments at a discount to low-income tenants under Section 8 and other subsidized housing programs will receive more money for their units each month under a rent increase to be paid for by the Housing Authority.
With permission from the U.S. Department of Housing and Urban Development (HUD), city housing officials will increase the amount of rental assistance they provide to low-income tenants by $148 per month for a one-bedroom apartment. For a two-bedroom, the federally-funded subsidy increases by $176 per month, and for a three-bedroom, $389.
That is the fourth round of increases granted by HUD in the last five years, a reflection of rapidly rising rents and the Housing Authority’s attempts to maintain its affordable housing stock.
“The fair market rent in Los Angeles is significantly lower than what the real cost of housing is in Santa Monica,” said Peter Mezza, a Housing Authority administrator who helps run Section 8 and City Hall’s home rental assistance program. “We’re hoping that these increases, which can result in higher rents and greater amounts of subsidies for our tenants, will attract more landlords into (subsidized housing) programs by giving them a fair return on their investment.”
Under Section 8 and other rental assistance programs funded by HUD, low-income tenants, such as seniors and the disabled, pay no more than 30 percent of their income on rent. City Hall uses federal funding to cover the rest.
But there’s a ceiling, which federal officials set by looking at the average rent charged in Los Angeles County and other major metropolitan areas.
With Santa Monica’s highly competitive housing market, apartments here tend to be more expensive than elsewhere in the region, meaning HUD’s rates aren’t always realistic, according to Mezza and property owners.
Realizing this, the Housing Authority in 1999 applied to HUD for an exception to the payment standard, becoming the first in the nation to do so following a law passed by Congress a year earlier that set up the process, Mezza said.
“This is obviously an expensive community, but what is interesting is, when comparing the average median income of our tenants to others in Los Angeles County that receive Section 8, our residents make less money than (anyplace else) — from the tip of Southern California to Kern County,” Mezza said, pointing out the need for the increase in assistance.
To qualify for Section 8, residents must meet “extremely low” and “very low-income” standards — earning no more than $20,800 and $55,450, respectively, for a family of four, according to HUD.
Officials with the Housing Authority plan to meet with apartment owners to inform them of the change in the payment standard and to see if they can recruit others to join in.
That may prove to be difficult, as some participants have expressed their deep displeasure for Section 8 and other programs.
Carl Lambert, president of Action Apartment Association, an advocacy group of rental property owners, said subsidized housing programs are plagued by bureaucratic red tape, and lack the flexibility owners need when choosing a tenant.
“The increases are great for those who are already in the program, but it won’t attract others,” Lambert said. “They could attract more if they (the Housing Authority) were easier to work with.”
The way the program is set up, Lambert said, the Housing Authority forces landlords to accept tenants who are on a list, no matter who these tenants are or the vices they bring with them when they move in.
“I’ve had some horrible people they’ve put in my units,” Lambert said.“Some doing drugs, ruining my units.”
Lambert, who has roughly 20 subsidized units, said he still rents to people who are eligible for Section 8, but looks for those not on the Housing Authority’s list. He loses money by doing so, but he said the thousands of dollars a year are worth it if it means he’ll have reliable, well-mannered tenants.
“Not all Section 8 people are bad,” he said.“But there are those few who ruin it for the rest.”
Tenants on Section 8 must follow strict guidelines. Those with a history of drug dealing or usage are not eligible, as are those where any participating family member has been evicted for such activity. Violations are reported to the Housing Authority, according to HUD.
Lainy Perry, a board member of the Apartment Association of Greater Los Angeles, or AAGLA, praised the Housing Authority for applying for the increase, saying it was very important in making some Section 8 units in Santa Monica competitive with fair market rents.
However, Perry said the Housing Authority must continue to pursue increases in the future, or fewer apartment owners will participate, “and Section 8 tenants will find it harder, or even impossible, to find a home in Santa Monica.”
Originally published in the Santa Monica Daily Press print edition on July 5, 2006. Read the original PDF.