by Tony Ucciferri
Editor’s note: Representatives from the San Francisco Housing Authority (SFHA) recently delivered a presentation on the Section 8 Housing Program to the SFAA membership. Over the past few years, there have been numerous legal and legislative changes that have had an impact on the program locally. Consequently, important questions have been raised regarding the functions and administration of this program. The following questions and answers should provide some insights into the current Section 8 Program.
Q. Federal law states that the Section 8 program is voluntary. Some courts in other states have ruled the program is mandatory in their particular state, but the California courts have not so ruled. However, other courts have implied that the program is voluntary. Every other local housing authority in California treats the Section 8 program as voluntary. What is the position of the SFHA?
A. Section 8 participation is, in fact, voluntary. In 1998, however, San Francisco amended Article 33 of the San Francisco Police Code. This amendment to the Police Code made it illegal for landlords and rental property managers to discriminate based on the tenant’s source of income. A landlord is always free to choose not to participate in the Section 8 Program. The rejected tenant, however, is free to challenge the owner and file a discrimination complaint against the landlord if he/she suspects that the rejection is solely due to the fact that they have a Section 8 subsidy. Then, the courts must resolve the matter.
For other jurisdictions, this is not a concern because they have not passed similar legislation in their respective communities.
Q. What is the SFHA’s position on the potential 90-day notice rule? Will the SFHA get on board and oppose the legislation as other local housing authorities have done?
A. This legislation is a response to many owners in rental markets who have experienced extremely low vacancy rates. These landlords want to take advantage of the opportunity in the Section 8 regulations to terminate their subsidized tenancies in order to increase the rent levels. Their actions often result in a significant degree of displacement for their subsidized families. Consequently, the intent of this legislation is to extend the warning periods for families and to penalize owners by freezing their rents for three years.
The SFHA currently continues to take a wait-and-see position on this matter. We need to explore the implications of this legislation with our partnering housing authorities and examine the advantages for our respective programs. We are torn because we see the Section 8 Program as beneficial to both owners and tenants. This legislation is not necessarily favorable for both parties. What we all need to do is weigh the costs of implementation versus the benefits. There is no benefit for either the tenant or the SFHA if the housing authority alienates our landlords by supporting this issue. On the other hand, the more practical approach would be to give 90-days’ notice to low-income families in order for them to collect the funds necessary for them to make a transition to other units without risking evictions or homelessness. The troubling aspect of this legislation is that the courts have interpreted the 90-day notice to apply to all terminations, including the ones with cause.
The SFHA does not support the application of these regulations in this manner when there is no malfeasance by the tenant.
Q. Another issue pertains to the annual inspection requirement, which authorizes the SFHA to force us into making repairs at our own expense even if the tenant is the cause of the problem. For example, we have even been “forced” into painting apartments simply because the tenant is a very heavy smoker. What is the SFHA’s current position on this issue?
A. First, any tenant-caused damages or deficiencies are the responsibility of the tenant to correct. The tenant is subject to losing his/her Section 8 subsidy if he/she does not comply. However, note that if the tenant loses the subsidy, you as the landlord are still left with a tenant who will now more than likely require you to evict them.
We will often ask the owner to correct a tenant-caused deficiency. As you know from the Housing Assistance Payments Contract (HAP), in order to continue the subsidy, units must meet Housing Quality Standards (HQS), especially if the deficiency creates a health hazard. If the unit fails due to a tenant-caused deficiency, and the tenant fails to correct the deficiency, we are forced to hold the payment and take action against the tenant. This may cost you more in the long run than to just do the repair and bill the tenant for your costs.
Q. A couple of years ago, we managed to get the SFHA to bring rents up somewhat closer to market value. However, not all rents were increased in spite of requests, and those rents continue to be below market. As a result, the issue remains how to get a fair return and the current market rent. Do you recommend a remedy for this problem?
A. Under the Voucher Program, rents can be increased up to the Payment Standard, plus the sanctioned increase by the Rent Board, with a 60-day notice to the tenant. An owner can request to revise the rent on a unit with proper notice at any time as long as he/she understands that any increase will be subject to comparability as discussed below.
Q. We still don’t receive any assistance at all from the SFHA with the sticky problem of getting rid of problem/nuisance tenants. More often than not, the local housing authority folks seem to “work against us” rather than help us get tenants out. The root of this problem is that we are still suffering an “adversarial” relationship with the SFHA rather than one of “mutual cooperation” for the sake of deserving residents.
A. The fundamental issue to remember is that the SFHA does not have any jurisdiction over lease enforcement issues. Only the tenant and owner sign the lease. The role of the SFHA is to execute a Housing Assistance Payment Contract (HAP) with the owner. This contract ensures subsidy payments are made on behalf of the tenant as long as the owner and tenant are in compliance with their obligations under the Section 8 Program regulations. Only the owner has the ability to terminate a tenancy for lease violations. The SFHA cannot legally force a tenant to move because he/she has violated conditions of the lease. We can only take actions against the tenant’s subsidy for infractions against the Section 8 Program.
Moreover, even if we take action against a tenant for violating his/her program obligations—once we have taken the subsidy away—you, as the landlord, are still left with the problem of how to evict the tenant in just the same manner as you must do with any other private-market tenancy.
Q. Explain the contractual relationship between the SFHA and the rental property owner. Can an owner choose to leave the Section 8 program? How does she/he do this?
A. The HAP Contract is the legally binding document that permits the SFHA to pay a subsidy on behalf of the tenant. The SFHA enters into a HAP Contract with the owner once an owner has agreed to rent a unit to a tenant, and the unit has passed a Housing Quality Standards inspection. The HAP Contract delineates both the owner’s responsibilities under the Section 8 Program and the terms of the SFHA’s obligations to the owner. As long as the tenant continues to receive a subsidy and lives in the unit, the contractual relationship continues.
Each month, by cashing the HAP check, the owner certifies both that the unit meets the HQS inspection and that the tenant may continue to reside in the unit. Should the owner fail the HQS inspection, he/she is entitled to a period of time to correct any deficiencies. Failure to respond will result in the abatement of the subsidy. If the subsidy ends and the HAP Contract is terminated, the tenant vacates the unit. Payment on the HAP Contract will only be paid while a tenant resides in the unit. Should abatement continue for six months, the HAP Contract will be terminated.
Only the SFHA may terminate a HAP Contract. If an owner wishes to terminate a relationship with SFHA, he/she may do so only by terminating the lease agreement for cause as outlined by the San Francisco Rent Ordinance. Once the lease ends, the HAP Contractautomaticallyterminates. However, if the HAP Contract is terminated, the lease is not automatically terminated. Except for voluntary termination by the tenant, an owner can only terminate the lease for just cause.
You should understand that the SFHA relationship with the owner exists solely as a means of providing the subsidy to the tenant. An owner’s decision to terminate the SFHA relationship but not the tenant relationship is tantamount to terminating the tenancy, since the tenant will not be able to afford the full rent without the subsidy. In the private market, terminating the relationship with the SFHA would be the equivalent of terminating the actual tenancy. This is why you cannot terminate a HAP Contract but must terminate the lease agreement in order for the SFHA relationship to end.
Q. What is the lease arrangement between the rental property owner and the tenant? May the owner use his/her own lease or does the owner need to use the SFHA lease?
A. The lease agreement between the owner and the tenant is the legal document that binds each party to a pre-determined set of rules and obligations. The SFHA historically provided a model lease as a service to an owner who did not have a clear understanding of what regulatory language belonged in his/her lease for an assisted tenancy.
In 1996, the Department of Housing and Urban Development (which is a federal funding source for SFHA) issued a Lease Addendum, which cleared the way for owners to begin using their own leases instead of the HUD model lease. Owners who choose to use their own leases must sign the HUD Lease Addendum in order for the HAP Contract to be executed. Refusal to sign the Lease Addendum is equal to refusing to rent the unit to the subsidized tenant.
The HUD Lease Addendum is required by federal regulations. The HUD Lease Addendum contains all pertinent regulatory language required for assisted tenancies, including the obligations of both the tenant and the owner as set forth by the Section 8 Program. The HUD Lease Addendum prevails whenever there are any conflicts between the Lease Addendum and the owner’s lease. You will find that the HUD Lease Addendum is similar to HUD’s model lease that owners no longer are required to use, although they still must abide by its regulatory provisions.
(Next Month: Part II)
The opinions expressed in this article are those of the authors and do not necessarily reflect the view point of the SFAA or the San Francisco Apartment Magazine. The information within this article is general in nature. Tony Ucciferri is the Special Programs Manager with the San Francisco Housing Authority . For more Information on the Section 8 Program, please contact either Shawn Coleman or Tony Ucciferri at 415.715.3281 or visit the Housing Authority's web site. Copyright © 2003 San Francisco Apartment Magazine