Section 8 Housing: What’s Your Take?

by JT McGee

How does section 8 affect communitiesThis morning I read a very critical piece in the WSJ which lambasted the government’s role in subsidized housing.

In particular, the opinion piece took a very controversial view, suggesting that the section 8 housing program was devaluing “nicer” neighborhoods that should, according to the author, be out of reach for subsidies.

The author eventually declares section 8 housing to be a failed program that moves crime around cities, and does little to improve living conditions. You can read the article here.

Section 8 Cost

  1. Section 8 budgets have grown from $7 billion in 1994 to $19 billion in 2011
  2. More than 2 million households make use of section 8 subsidies
  3. Tenants pay only 30% of their income toward rent and utilities
  4. The most expensive markets have subsidy caps of >$2,500 per month, per household

Section 8 Crime

The cost is only one part of the deal. Crime in subsidized housing has soared; homicides have exploded:

  1. In Chicago, only 5% of people live in section 8 areas but are arrested for 20% of all crimes.
  2. In Indianapolis, 80% of all homicides were attributed to those who received section 8 subsidies.
  3. HUD now encourages ex-convicts to move into subsidized housing locations after release. Only sex offenders and meth makers are disallowed entry into the program.

Solutions?

How do you solve the problems of section 8 housing? Do you limit the program to specific neighborhoods? Should landlords play a more important role in policing their residents and tenants?

Photo by bitman

{ 9 comments… read them below or add one }

Amanda L Grossman August 18, 2011 at 17:21

Wow–nice write up, and very controversial topic.

I honestly do not yet know my opinion on the matter; but I would like to add that they are raising (or have raised) the limits so that people who are eligible for Section 8 housing can live in nicer neighborhoods. I wonder if the crime rates would go down if they spread out? I realize the writer to that article thinks it will not.

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JT McGee August 18, 2011 at 19:24

Thanks for the tidbit on raising the section 8 benefits. I suppose rental prices have gone up, but if this is in fact an effort to spread people out, then I guess the benefits would have to rise faster than rental inflation.

Honestly, I think there is at least some skew in the data. For instance, you’re probably more likely to get charged with a crime in section 8 areas than in others simply because police are more likely to be found in higher quantities relative to other areas. Not to say that all crimes were unearned, but crime is easier to find when you’re actively looking for it, and when there’s more presence to find it.

The writer doesn’t think crime will go down, and I’m not so sure either way. It’s an important development, though.

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Jeff Reed August 18, 2011 at 19:00

I have an income property 3 hours away from my primary residence. Friends have warned me away from S8. When I advertised my rental I received a few calls asking if I accepted S8. My impression was that the caller had little “skin” in the game. Would they treat my property with respect? I guessed NO. They asked what I was going to do for them. I am glad I did not relent when the home stood empty. I want a tenant that will not destroy my house (it has happened even with good screening).

I have had great renters but they were spending $ they earned (not allowance $ from Uncle Sam). The system is broke and congress doesn’t have the skill or will to fix it.

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JT McGee August 18, 2011 at 19:27

I can definitely see it from this perspective. If the renter is receiving free money, then there is obviously a disconnect between who is paying for what. Makes sense to me.

There’s definitely a lot of risk in renting a home out. I mean…even with 20% cash flow in one year someone could do that much damage to a property. Net-net, zero gain; you could even lose money. You could presumably lose goodwill with neighbors in renting a home out to someone who doesn’t take care of it.

I don’t think the system needs to be thrown out completely, but there are some bad apples definitely ruining it for the many. What do you do? Make it temporary? Tough call.

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Sandy - yesiamcheap August 19, 2011 at 12:24

Agreed with Jeff. Section 8 is far beyond its original scope. The quality of people using the program – sorry to lump everyone together – are not always the best and because they have little invested in renting your home, they treat it like crap. My rental is empty now because I refuse to take on any programs. Better empty and in good condition than what I’ve had to deal with.

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retirebyforty August 19, 2011 at 16:55

Yeap. I wouldn’t rent my place out to S8 either. It’s better to have a good long term tenant even if you have to wait a few months to rent.

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Ashley @ Money Talks August 20, 2011 at 10:06

I’ve lived in Section 8 housing and it’s not good. The crime is high because people are bored. Few people work and they sit around all day and get into trouble. Idle hands. Obviously not everyone is that way, I certainly never committed a crime while I was living there and I took good care of my place, I worked and went to school. But I saw what went on.

During the housing crisis I heard the government was buying houses in the subdivision next to me for Section 8 housing. I was upset about it. I’m glad they didn’t do that in my neighborhood. I don’t want to live in a section 8 neighborhood again. Especially if I’m paying for it!

And no, I wouldn’t ever accept a section 8 tenant. That’s mean I’m sure. Lumping everyone into one category like that but as a rule… no. Honestly, I would worry about anyone who isn’t keeping themselves busy during the day. I would be concerned about renting to a rich kid who lives off his trust fund and doesn’t work or do anything productive. It’s not rich vs poor, it’s busy vs lazy.

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Investor Junkie August 20, 2011 at 13:30

I have a rental property in an area that section 8 properties exist. I will NEVER do section 8 rental for my property for many of the cited reasons comment and listed in the article.

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Money Reasons September 13, 2011 at 21:08

I’m well traveled, and I know people that lived in Section 8 housing. The quasi-family (mother with 2 kids from a trucker that in theory didn’t live there… wink wink) that I knew were taking total advantage of the system, in every way possible. They also got food stamps, had an expensive aquarium and went to Disney every year (12 hour drive). They also had fancy cars…

As far as how they treated the house, lets just say the holes in the walls weren’t from mice…

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