In the previous installment, readers discovered that there are profits to be realized when investing in properties with affordable housing units. In addition, landlords who do so are providing a service to the community. So, owners accept lower rent payments from qualified tenants while receiving funding and/or tax benefits from the federal government. Also noted in part one is the fact that the government interfaces with landlords through the local housing authority. What, then, do real estate investors gain from the housing authority? In the same vein, what are the responsibilities of property owners to these regional administrative agencies?

Housing Authorities Explained

Cities and states strive to minimize homelessness. For humane reasons and market motivations, crowds of indigent people are a bad look for any location and pose hazards in terms of public safety and public health. In addition, destitute populations can affect home value in the community. With myriad federal and state programs available to find residences for those in want, housing authorities exist on the municipal and county levels to bridge the needs of the struggling with the resources of the government.

For example, housing authorities screen candidates for eligibility. Income, disability, life circumstances and other factors play into these evaluations. Accepted applicants are assigned a caseworker, though -- given the shortage of units in many places -- they might end up on waiting lists. In any event, they must meet with the caseworker on a regular basis so the authority can determine continued eligibility. Section 8 vouchers are the most sought-after affordable housing benefit and HUD assigns income thresholds according to region. This is why the local housing authority is there: to reconcile the economic conditions of the immediate area to federal assistance standards. Yet unit providers must also deal with housing authorities.

How Landlords Relate to Housing Authorities

If you want to make units accessible to low to medium income tenants, there is a process to follow and an agency with which to deal. The aim of Section 8 and Housing Choice Voucher programs is to place people of limited means into secure, clean and comfortable living space. Thus, the housing authorities have a vested interest in locations of satisfactory home value. Property owners, accordingly, must conform to authority standards.

The first item of business is for the landlord to apply with the housing authority to approve one or more units as affordable housing. Each agency follows different procedures so get that information up front. The authority may post your unit(s) on websites or contact approved tenancy applicants directly. The housing authority must also sign off on the owner's proposed monthly rent and confirm that the units and building pass on the following or similar criteria:

  • Sanitation standards
  • Kitchen and garbage disposal functions
  • Sufficient living space and security features
  • Accessibility
  • Ample lighting and heat
  • Functioning plumbing systems
  • Absence of lead-based paint
  • Presence of working smoke detectors

Once everything checks out, the owner signs a lease with the tenant and subsequently receives a written agreement from the housing authority to sign. Once this contract is inked, the landlord can then collect monthly payments from both the tenant and the housing authority.

Property owners must also take care that all of their transactions with prospective tenants and existing tenants comply with the provisions of the Fair Housing Act.