Update on Lexington's Proposed Section 8 Ordinance

            Hey gang. Stephen Marshall from kylandlordlaw.com back with you with another update on this Section 8 stuff.

            A couple of days ago I attended the LFUCG Social Services & Public Safety Committee meeting and listened to the presentation by Charlie Lanter, LFUCG’s Housing Commissioner, proposing to make it illegal for housing providers to refuse to accept Section 8 vouchers in certain situations. After the presentation, committee members asked questions to Mr. Lanter and to Austin Simms and two other members of the Lexington Housing Authority, which oversees the Section 8 Program.

THE PRESENTATION TO THE COMMITTEE

            Here’s what the Committee heard about the Section 8 program in Lexington and the impact of the proposal – these are not quotes but are descriptions:

• No more than four percent (4%) of housing providers in Lexington accept Section 8 vouchers.

• Most of those who accept Section 8 vouchers are on the north end of town, so the ordinance is needed to open up new neighborhoods to voucher holders.

• The potential ordinance would do little more than prevent housing providers from advertising “No Section 8 accepted”.

• Housing providers will not have to lower rents to accommodate voucher holders, so properties with rents beyond voucher amounts will not be impacted.

• Legal opinions:

• Housing providers would not be required to repair items from a failed inspection if they would not make such repairs for non-voucher holders.

• Housing providers could reject voucher holders if the inspection and approval process takes too long.

• Myth-busting – The Section 8 program does not require housing providers to hold units vacant for unreasonable amounts of time. The Housing Authority reports that:

• Housing providers are only required to complete two forms: (1) a direct deposit form and (2) a W-9 and will be set up quickly in the Housing Authority system once those forms are provided.

• Requests for tenant approval are processed by the next business day.

• Inspections are scheduled within three (3) business days.

• Contracts between the Housing Authority and the housing provider are entered within two (2) business days after the unit passes inspection.

MY THOUGHTS ON THE PRESENTATION   

            So, ultimately, the presentation to the Committee is that the Section 8 program is a smooth, expedited system in which tenants are seamlessly transitioned into new housing and housing providers receive quick approval and guaranteed money with very little inconvenience.

            It was what I’d call the “Social Media Version” of the Section 8 Program. There’s that saying that “I hope your life is as good as you make it look on Facebook.” Well, I wish the Section 8 program was as good as they made it sound to the committee.

            And I wish the proposal was as benign as they made it sound to the Committee. But, my friends, I do not believe that’s the case.

            Here’s what I’ve said since the beginning. If Section 8 vouchers functioned like cash, then I’d encourage everyone to support this ordinance. But that is simply not the case.

            I’ve been representing housing providers for over 15 years. In that time, the consistent message from my clients is that Section 8 process is incredibly difficult and frustrating for housing providers. I’ve already mentioned the delays in scheduling inspections, units getting failed for trivial reasons, and members of the Housing Authority being difficult to work with.

            For communicating that, I’m said to be guilty of spreading “misinformation”. I’ve had clients tell me that working with Section 8 required them to hire an extra part-time position. I’ve had clients that waited two months for the initial inspection. I’ve had clients who had units fail over the location of the house number. Are these isolated incidents? Perhaps – but I don’t think so.

HOUSING PROVIDERS ARE BUSINESS PEOPLE

            Because if they were isolated incidents housing providers would flock to the guaranteed money. There’s a fantastic scene in the movie “The Lincoln Lawyer” where the lawyer doesn’t allow his client’s trial to move forward, telling the judge that they need to delay the trial to locate an indispensable witness – Mr. Green. Translation: I’m not trying the case until I get paid.

            Housing providers are business people. They are investors. They have put up their money and assets and time. Their goal is to make money – to get a return on that investment. In other words, their primary concern is Mr. Green.

            And that’s true from the largest apartment community that is but one link in a huge regional or national portfolio, and it’s true of the Mom-and-Pop operation that has one rental property that they depend on for their retirement income.

            Because that’s true, you can be sure that, if the Section 8 program operated smoothly and without delay, they would not have trouble finding housing providers ready to participate. What’s more, you wouldn’t have 70% of former participants refusing to go back.

            The Housing Authority has been offering incentives to get housing providers to participate in the program. I think that’s a phenomenal idea that should continue to be built on. Let the Section 8 program rise or fall in the open market. If the program is not thriving such that housing providers want to participate, the first step of the LFUCG should be to figure out the reason for that.

            Because here’s the concern: the Housing Authority has had and continues to have every incentive to make the Section 8 program as attractive as possible to housing providers. If the program becomes mandatory, that incentive goes away. What’s the program going to look like then? Housing providers don’t want to find out.

THE IMPACT OF THE PROPOSAL?

            There is some talk by those connected to the proposal that it will have minimal impact on housing providers because they can simply move on to other applicants if the Section 8 process takes too long or if they don’t want to make repairs required by the program.

            The fact is that those are legal conclusions – and no one knows whether those conclusions are accurate at this point. Ultimately, those questions will be answered by Lexington Human Rights Commission, then by a Fayette Circuit Court Judge, then by the Kentucky Court of Appeals, and possibly the Kentucky Supreme Court. No one wants to be the test case on those issues. Housing providers are simply being told not to worry about them. That’s not sufficient. 

            And that’s the flip side of what was told to the Committee. If the impact is so minor on housing providers and can be so easily avoided, why should we believe it will have any impact on the getting more tenants housed? 

            Beyond that, since housing providers are not required to lower their rents to meet voucher levels, how will new neighborhoods and opportunities be opened up to tenants? 

            Ultimately, this Social Media depiction of the Section 8 program does not seem to correspond to the reality on the ground – it certainly does not jibe with the stories that I’ve been told consistently for the last 15 years.

THE NEXT STEP - PUBLIC COMMENT

            But there are two very good things to report: (1) the Committee, and presumably the entire Council, are engaged on this issue. They are listening. They are asking questions. They know that it matters to you. (2) They have scheduled this matter for public comment. The Committee will meet on Tuesday, November 14, at 6:00 p.m. to hear public comment on this matter. 

            So, that’s your chance. That’s your chance to show up and tell the Committee about your experiences with the Section 8 program. You can be sure that numerous tenant advocates will do the same. That’s the beauty of our system. It’s in your hands. 

WHY I'M INVOLVED

            Here’s what people need to know: I don’t own rental property. I don’t truly have a dog in this fight. In fact, my business will only increase if this proposal becomes law, as housing providers will need to be educated on it and will need representation as a result of it. 

            But I see it as a bad deal for housing providers. That’s why I’ve sounded the alarm. If people think that I’m a bad person for doing so, so be it. I’ll never be ashamed to tell the truth. If I’m wrong about the truth, then I’ll say that as well. But, on this issue, I don’t think I am. 

            So, that’s enough for today. I hope to see you all on November 14 at 6:00 p.m. in the Council chamber at 200 East Main Street. Between now and then, continue to reach out to your Council Member to tell your story and express your concerns.

            If I can help, give me a call at (859) 685-0035 or shoot me an e-mail at smarshall@tripleslaw.com. Have a fantastic week!