Section 8 housing: Destroying home values and driving up rental prices?
Winners: Section 8 renters
The design of Section 8 is to provide extremely low-income families with decent, safe and sanitary housing in the private market.
But a handful of Section 8 renters are getting all that and then some.
Cash investors are buying up luxury bank-owned properties and flipping them into Section 8 rentals for the guaranteed, at- or above-market rent checks issued by the government.
Its a boon to Section 8 renters who find themselves with amenities many working, middle-class Americans cant afford, such as granite countertops, pools and community racquetball courts and fitness centers.
Losers: Regular renters
According to Korte, Section 8 rentals play a role in driving up prices in the rental market. Section 8 vouchers are not below market value. They pay market rates, and sometimes offer even more than rental asking prices. This puts upward pressure on rents.
If you look at a two-bedroom, two-bath Section 8 rental reimbursement, its about $1,700 in Palm Beach County, says Korte. Thats more than the advertised price for some luxury apartment complexes in the area.
Regular renters who pay out of pocket for their place are getting priced out of the rental market, and Section 8 works to their disadvantage.
The programs desire to be at the equal playing field of all rentals creates a self-fulfilling prophecy of what rent is, says Korte. Its going to continuously move up.
Losers: Neighbors of Section 8 tenants
Section 8 rentals have a direct impact on their surrounding communities.
Youre seeing destruction of the underlying neighborhood because youve got rental communities in areas where they shouldnt be, says Korte.
In general, the average homeowner has an emotional and financial stake in their home. But the typical investor who buys and rents
Winners: Section 8 renters
The design of Section 8 is to provide extremely low-income families with decent, safe and sanitary housing in the private market.
But a handful of Section 8 renters are getting all that and then some.
Cash investors are buying up luxury bank-owned properties and flipping them into Section 8 rentals for the guaranteed, at- or above-market rent checks issued by the government.
Its a boon to Section 8 renters who find themselves with amenities many working, middle-class Americans cant afford, such as granite countertops, pools and community racquetball courts and fitness centers.
Losers: Regular renters
According to Korte, Section 8 rentals play a role in driving up prices in the rental market. Section 8 vouchers are not below market value. They pay market rates, and sometimes offer even more than rental asking prices. This puts upward pressure on rents.
If you look at a two-bedroom, two-bath Section 8 rental reimbursement, its about $1,700 in Palm Beach County, says Korte. Thats more than the advertised price for some luxury apartment complexes in the area.
Regular renters who pay out of pocket for their place are getting priced out of the rental market, and Section 8 works to their disadvantage.
The programs desire to be at the equal playing field of all rentals creates a self-fulfilling prophecy of what rent is, says Korte. Its going to continuously move up.
Losers: Neighbors of Section 8 tenants
Section 8 rentals have a direct impact on their surrounding communities.
Youre seeing destruction of the underlying neighborhood because youve got rental communities in areas where they shouldnt be, says Korte.
In general, the average homeowner has an emotional and financial stake in their home. But the typical investor who buys and rents