Low-income renters in Silicon Valley who have waited a decade or more for federal Section 8 rent subsidy vouchers are being turned away in droves by what housing authorities say is the program’s worst market ever.
The availability of subsidized housing is worse in the valley than anywhere in the region that includes California, Nevada, Arizona and Hawaii, and perhaps the nation, said Larry Bush, spokesman for the U.S. Department of Housing and Urban Development’s San Francisco office.
The tight market also poses a dilemma for those already in Section 8 housing. They can’t move because there’s nowhere to go.
Some low-income renters in San Jose’s Santee neighborhood — and perhaps elsewhere — have suffered deplorable housing conditions, fearing that if they complained, they’d be evicted.
“We’ve had our ups and downs, but I’ve been in the business 30 years and this is the worst crisis we’ve had,” said John Burns, executive director of the Housing Authority of Santa Clara County. “It’s just a terrible, terrible market — that’s the bottom line. Nothing is available.”
The subsidized-housing crunch is rooted in skyrocketing incomes and housing costs driven by Silicon Valley’s roaring Internet economy.
There are fewer than 12,000 apartments being rented to Section 8 tenants in the valley, a number that has changed little. But in recent years, those low-income tenants have seen apartment vacancies vanish and a waiting list of 27,000 names.
Only one in 10 renters issued Section 8 vouchers succeeds in finding housing, down from about eight in 10 five years ago, Burns said.
The voucher is supposed to be used within four months. While the county housing authority can grant extensions, those who don’t find housing after six months lose the subsidy and must reapply.
That has happened to nearly 800 people in the county this year, up from about 150 last year, the housing authority said.
Juan Duran knows that all too well. The 38-year-old single father applied for a Section 8 voucher in 1990. Six months ago, his number finally came up, and he was issued a voucher for up to a two-bedroom apartment.
Duran, currently homeless, has been looking for one ever since.
“It’s vicious out there because everyone’s vying for the same place,” the lifelong San Jose resident said. “I’ve been actively looking everywhere, but hardly anyone calls back.”
Duran is pleading for more extensions so he doesn’t lose the subsidy he waited a decade to receive.
“At this point, I would take any place that was habitable, even in the worst part of town, so long as I could get my son to school,” Duran said.
The housing authority, which inspects Section 8 apartments yearly, insists few tenants endure poor conditions like those in Santee. A judge recently slapped landlords there with fines and jail terms for failing to fix ongoing problems that included broken appliances and vermin infestation.
“A limited number of landlords aren’t doing their job,” Burns said. “Most are doing the right thing.”
But housing quality further limits the number of subsidized apartments. While code enforcement officials look to eradicate blight and ensure tenant safety, housing authorities also must consider the risk of losing affordable apartments. With the market as tight as it is, housing authorities resist pushing landlords too hard.
Already, two out of five apartments fail the housing authority’s initial inspections, Burns said. In half of those cases, landlords refuse to make required fixes, saying they can simply rent the place as-is on the open market for more money, he said.
“With a market like this, we do everything we can to make sure he stays in the program,” Burns said.
In the case of the Santee tenants, the housing authority re-inspected their apartments after the sanctions. But the agency decided one of the dwellings was still suitable, even though a judge found the complex so awful he ordered the landlady to live there for two months.
Under the Section 8 program, named after a section of the U.S. Housing Act of 1937, the Department of Housing and Urban Development sets fair-market rent rates and income eligibility levels for each region.
But HUD’s fair-market rate has hardly kept pace with actual rates in places like Silicon Valley, where rents are soaring, Burns said.
Average rent for a two-bedroom apartment at the larger complexes in Santa Clara County rose to $1,599 in June, up 22.8 percent from $1,302 last June. But HUD’s fair-market rate for a two-bedroom in the county is currently $1,343, Burns said.
The housing authority has petitioned HUD for an increase in the fair-market rate, and expects an answer soon.
“It’ll help,” Burns said, “but it won’t solve the problem” because there just isn’t enough affordable housing to go around.
The Section 8 situation hasn’t been nearly as bad in neighboring cities or elsewhere in the region, said HUD’s Bush.
In San Francisco, two out of three tenants issued vouchers find apartments, Bush said. One reason may be that San Francisco has HUD’s highest fair-market rent level: $2,043 for a two-bedroom apartment, he said.
It took the Santa Clara housing authority more than a decade to work through its last waiting list of 16,000 names, Burns said. The current list, opened in January 1999, grew to 27,000 names in two weeks.
Ordinarily, Section 8 is attractive to landlords. “When real estate wasn’t what it is now, it was very profitable for them because it was guaranteed income,” said Rosie Casa, a former property manager.
But when market rents soar, the advantage evaporates.
The Association of Housing Management Agents of Northern California and Nevada is hosting a seminar this month to help landlords navigate the legalities of converting Section 8 apartments to market-rate dwellings.
Casa, who now works for the non-profit Palo Alto Housing Corporation, will be among the speakers, sharing her experience converting Section 8 apartments in the valley to market-rate last year for a former employer.
