Phoenix Section 8 Landlords to Receive Incentives
- Author: Mary Singleton
- Posted: 2024-07-25
In the middle of last month (February, 2022), the Phoenix City Council voted 9-0 to offer an incentives package to landlords around the city if they accepted vouchers from Section 8 tenants. In Arizona, landlords are under no legal obligation to accept Section 8. They can opt for tenants able to pay their full freight, if they so choose. To combat the fact that more and more landlords are opting out of Section 8 vouchers, the city has decided to sweeten the deal by giving landlords between $500 and $2,000 per month, on top of their regular rent, if they open up their doors to Section 8 tenants. This is known as the Landlord Incentive Program (LIP).
To date, this is a relatively small program. The Council has at its disposal around $150k to disburse among 165 landlords offering around 300 units. What this means is that these are smaller landlords who only own one or a few properties, and not people who own multi-apartment complexes. So that they want to raise their rent for paying tenants is understandable to the Council, hence the incentives. Any additional money needed will be taken from the budget of the American Rescue Plan.
Housing Shortages Creating Would-Be Moguls
To say that there's currently a large housing shortage in America makes it sound as if the problem is new. It's not a new problem; America has been dealing with a housing shortage for going on two years now, and it's only getting worse. The real issue here with a housing shortage is that this creates a bidding war. People who have a lot of money are willing to pay more for these properties. Those that cannot get the homes that they want end up taking the homes they can get, and this often includes renting from landlords. Landlords, of course, are quick to jack up their rates to capitalize on all of this. And with landlords being able to get more from desperate people who actually have a lot of money, they're less inclined to accept Section 8 vouchers from the government.
A lot of people can see both sides of this issue. They can understand how landlords want to take advantage of people willing to pay, while still understanding that perhaps landlords should be a bit more compassionate for the guaranteed money of housing Section 8 tenants. It's a complex problem with no easy solution, which is why the government City Council in Phoenix is hoping that these added incentives will be enough to convince the landlords to stop going for the larger dollar amount and instead stick with the guaranteed dollar amount. It's a tough sale for small-time landlords who need their month-to-month profits because they're living with this high inflation just like everyone else.
No Solutions In Sight
Since the Section 8 program started nearly 100 years ago, things have gotten exponentially worse for Americans. One of the biggest problems is that America's economy isn't nearly as scalable as its population. For instance, 2 million immigrants can pour over the border and find that there's room for them to technically live here; but how does the housing situation reflect that, when there weren't enough houses available for the Americans who already lived here minus the extra 2 million? This leaves the government rushing to throw money at problems to get people into housing, and this creates a ton of fraud, waste, and really only exacerbates the existing problems.
Most economists and academics agree that in order to solve this issue once and for all, the actual supply of the available homes needs to be exponentially larger than the demand. Only then will prices go down, and Section 8 would become preferable to landlords. However, large corporations resist this notion, as that cuts into their profits, and so America is left with news like small city councils passing legislation they hope will help, but they don't really know.
When these incentives go into effect, landlords will be given extra money to house Section 8 tenants. The potential backlash here is that this could cascade out around the nation and leave all landlords looking for extra money for accepting vouchers. Hopefully the plan doesn't backfire, but it certainly could. At some point, the landlords are going to have to help out instead of just demanding more money.
