No More `Slum, Slumming' for Section 8 Recipients
Dawn Wotapka
The houses in Paradise, a community in Henderson, Nev., are typical of the
upgraded homes some tenants rent using a government subsidy. See more photos.
Today, I wrote about Section 8's upgrade: Recipients of the government subsidy
are renting boom-era showpieces, brimming with McMansion-like features, that
once sold for hundreds of thousands of dollars.
Now that the housing market has imploded, more of these grandiose homes are
trickling down to the rental supply. Section 8 tenants can score swimming
pools, backyard barbecue grills and walk-in closets. Some are even requesting
features ranging from Jacuzzi tubs to parquet floors. Newly built homes are
available.
"You can't go out and buy a property in a bad area and expect to [rent to] a
Section 8 tenant anymore," says Richard Cupelli, president of GoSection8.com,
where tenants and landlords connect.
Section 8 renters, who have some or all of their rent paid by the government,
are in such demand, that in the hardest-hit markets, such as Las Vegas, they
can negotiate lower rent, demand rental discounts mid-lease and score freebies
such as a carpet scrubbing.
Some are using this opportunity to upgrade. Shawnetta Newburn left a
drug-infested St. Louis neighborhood for Henderson, Nev., a Vegas suburb. She
now lives in a gated community with a sparkling swimming pool. Her
three-bedroom home has soaring ceilings, a gas-fueled fireplace and an enclosed
toilet room, something more common in mini-mansions.
"The only time I ever saw that was on TV or something," she says during a tour
of the approximately 2,000-square-foot home. "I never thought I'd have anything
like this."
The change marks one of the most dramatic shifts since the 1974 creation of
Section 8, nicknamed after its location in the U.S. Housing and Community
Development Act. The $18.1 billion Housing and Urban Development program offers
more than 2 million families the chance to live outside of housing projects.
Recipients pay a certain percentage of their income, typically no more than
30%, each month. The government directly deposits the payment, so landlords
don't have to fret about late rent or bounced checks.
About half of Ms. Newburn's rent is covered. In Las Vegas, Serena Jefferson, a
mother of seven, pays $400 a month for her "awesome" five-bedroom home with a
tiled walk-in shower. The government covers $1,400, she said.
"It's no longer slum, slumming," said Mike Gonyea, head of Mike Gonyea Real
Estate in Las Vegas, as he toured Ms. Jefferson's home.
In addition to guaranteed rent, some landlords report enviable returns. Last
year, Arman Davtyan, who rents to Section 8 tenants, paid $60,000 in cash for a
four-bedroom house in North Las Vegas. He charges rent of $1,436 each month,
giving him a profit of about $15,000 per year after insurance and property
taxes, he says.
"I used to never rent to Section 8. There used to be such a stigma," he said.
"Now that's by far my primary choice."
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