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The most recent data from the U.S. Census Bureau shows that 22% of Philadelphia residents live in poverty. For these people whose earnings fall below the federal poverty line, finding decent housing is highly challenging.
The good news is that help is available for low-income households looking for affordable housing in Philadelphia. A perfect example is Section 8, now known as the Housing Choice Voucher (HCV) program.
As a private landlord, you should consider participating in HCV, as it can help expand your prospective tenant pool. However, for your property to qualify, it must meet federal rent reasonableness criteria.
Innovate Realty & Property Management has shared insights regarding Section 8 and reasonable rents, so please read on.
A 101 on Section 8
Section 8 is a federal housing assistance program administered by local housing authorities, including the Philadelphia Housing Authority (PHA). The PHA facilitates the program in Philly, which, according to WHYY.org, 19,500 of Philly's residents rely on.
HCV aims to provide affordable housing options for:
- Low-income families
- The elderly
- Individuals with disabilities
Section 8 voucher holders receive subsidies that assist with their monthly rent. They can use their vouchers to pay a portion of their rent in the public and private rental housing markets.
How Does Philadelphia Rent Evaluation Work?
The PHA employs a specific framework for evaluating rents under Section 8: rent reasonableness criteria. It's a methodological approach that ensures rent doesn't exceed the fair market rate using the following factors.
Market Comparisons
The PHA conducts a comparative analysis of similar rental properties in the area. They consider each property's:
- Location
- Size
- Amenities
Note, too, that the PHA thoroughly assesses property safety and habitability before letting Section 8 tenants move in. To ensure you pass, perform a thorough property inspection. Then, hire professionals to complete all necessary repairs before the PHA assessment.
Current Listings
The PHA reviews current listings to determine the going rates for properties. For example, they evaluate online listings and reports from real estate agents.
Confirmed Tenant Information
The PHA also considers feedback and experiences from current Section 8 tenants to ensure the final assessment is fair.
By adhering to all these criteria, the PHA ensures the generated rental amounts are reasonable, promoting affordability in the Philadelphia rental market.
Tips for Navigating the Section 8 Rent Assessment Process
For landlords, there are actionable steps to reinforce a favorable outcome in the Section 8 rent evaluation:
- Maintain records of rental agreements, past payment history, and property conditions, which can prove invaluable during assessments
- Know your area's current fair market rents, which can help indicate whether the proposed rents are reasonable
- Engage with the PHA to better understand the program's process and requirements from both tenants and landlords
Lastly, remember to screen tenants thoroughly. Vet voucher-holding tenants the same way you screen regular rental applicants.
Take Action Today
Understanding rent reasonableness and the HCV assessment process is key to determining whether you can rent to Section 8 tenants in Philadelphia, PA.
If you want to participate in Section 8 but don't have time to manage everything yourself, Innovate Realty & Property Management can help. We're a full-service property management company that has served residential and commercial landlords in Philly for over 50 years. We can handle everything from accurate rental pricing to marketing, tenant placement, maintenance, and lease enforcement.
Speak with us today for a complimentary analysis!
