Understanding Housing Choice Vouchers and Source of Income Protections
Section 8, officially called the Housing Choice Voucher Program, is a federal rental assistance program administered by the U.S. Department of Housing and Urban Development (HUD). The program provides rental subsidies to low-income families, elderly individuals, and people with disabilities, enabling them to afford safe, decent housing in the private rental market.
Under Section 8, eligible tenants receive a voucher that pays a portion of their rent. The local Public Housing Authority (PHA)—in Placer County, this is the Placer County Housing Authority—determines the tenant's subsidy amount based on their income and the area's fair market rent. The housing authority pays its portion directly to the landlord; the tenant pays the remainder.
For California landlords in Roseville, Rocklin, Auburn, Lincoln, and surrounding Placer County areas, Section 8 represents a significant tenant pool and an opportunity for stable, reliable rental income. Understanding how the program works and California's source of income protections is essential.
As of January 1, 2020, California Government Code Section 12955 (enacted via SB 329) prohibits housing discrimination based on "source of income." This means landlords cannot refuse to rent to applicants simply because they use Section 8 vouchers or other lawful income sources like social security, disability benefits, or veterans' benefits.
Under SB 329, landlords cannot:
SB 329 does not require landlords to accept every Section 8 applicant. You can still:
The key is treating voucher holders the same as other applicants. If your income requirement is three times monthly rent, apply it equally regardless of whether the applicant uses a voucher or pays rent entirely from employment income.
SB 329 includes limited exceptions. Landlords are not required to accept Section 8 vouchers if:
These exceptions are narrow. Most rental properties in Placer County are subject to SB 329's source of income protections.
Eligible individuals apply to the Placer County Housing Authority or other local PHA for a voucher. Due to high demand, waiting lists are often long—sometimes years. Once a voucher is issued, the tenant has a limited time (typically 60-120 days) to find a qualifying rental property.
Voucher holders search for properties that meet HUD Housing Quality Standards and fall within the payment standard limits. When they find a property, they submit a Request for Tenancy Approval to the housing authority, which includes the lease and property information.
The housing authority schedules an inspection to ensure the property meets HUD's Housing Quality Standards (HQS). These standards cover health, safety, and habitability. If the property passes, the housing authority approves the tenancy. If it fails, you must make necessary repairs and request a re-inspection.
Once the property passes inspection, you sign a lease with the tenant and a Housing Assistance Payment (HAP) contract with the housing authority. The HAP contract specifies the rent amount, the housing authority's payment portion, and the tenant's payment portion.
Each month, the housing authority pays its portion directly to you via check or direct deposit. The tenant pays their portion directly to you. If the tenant fails to pay their portion, you can pursue eviction for nonpayment, just as with any other tenant.
Section 8 tenancies require annual recertification of the tenant's income and eligibility. The housing authority also conducts annual property inspections to ensure continued HQS compliance. If the property fails an annual inspection, you must make repairs to remain in the program.
To accept Section 8 tenants, your property must meet HUD's Housing Quality Standards, which cover:
Most well-maintained rental properties easily meet HQS. However, older properties or those with deferred maintenance may require repairs before passing inspection. Budget for potential inspection-driven repairs when deciding to accept Section 8 tenants.
Section 8 rent amounts must fall within HUD's payment standards for the area. Payment standards are typically set at or near the Fair Market Rent (FMR) for the region.
HUD publishes FMRs annually for metropolitan areas and counties. FMRs vary by bedroom count and location. For example, the Sacramento-Roseville-Arden-Arcade metro area (which includes Placer County) has specific FMRs for studios, 1-bedroom, 2-bedroom, 3-bedroom, and larger units.
The housing authority uses these FMRs to set payment standards—typically 90-110% of the FMR. Landlords can charge rent up to the payment standard. If your requested rent exceeds the payment standard, the voucher holder must pay the excess out-of-pocket, which may make the unit unaffordable for them.
You can request rent above the payment standard, but the tenant must agree and be able to afford it. HUD rules require the tenant's portion of rent (including amounts above the payment standard) not to exceed 40% of their adjusted monthly income at initial lease-up.
In competitive rental markets like Roseville and Rocklin, many landlords set rents at or near payment standards to maximize the tenant pool. Setting rent significantly above payment standards limits the number of voucher holders who can afford the property.
The housing authority's portion of rent is paid reliably every month. This guaranteed income reduces the risk of nonpayment compared to tenants who pay 100% of rent from personal income.
Voucher holders often seek stable, long-term housing. Section 8 tenants tend to stay longer, reducing turnover and vacancy costs.
By accepting Section 8, you expand your applicant pool significantly. In tight rental markets, this increases your chances of finding qualified tenants quickly.
Since the housing authority pays its portion directly, the only nonpayment risk is the tenant's portion. For tenants with low income contributions (where the voucher covers most of the rent), this risk is minimal.
Housing authorities assist with lease enforcement, mediation, and tenant issues. If problems arise, the housing authority can provide resources and support.
Initial and annual HQS inspections require time and potential repairs. If your property has deferred maintenance, bringing it to HQS compliance may involve upfront costs.
Section 8 involves additional paperwork—HAP contracts, annual recertifications, inspection coordination. Landlords unfamiliar with the program may find the administrative burden significant initially.
If market rents in your area exceed payment standards, accepting Section 8 may mean charging below-market rent. Evaluate whether the guaranteed payment and lower vacancy risk offset potentially lower rent amounts.
Applying income requirements to voucher holders requires careful calculation. Since the voucher covers a portion of rent, determining whether the tenant's remaining income meets your criteria (e.g., three times rent) can be complex. Some landlords count the voucher as income; others require the tenant's personal income alone to meet the threshold. Consult the housing authority and legal counsel to ensure your screening criteria comply with SB 329.
Reach out to the Placer County Housing Authority or the PHA serving your area to register as a Section 8 landlord. They'll provide information, forms, and guidance.
Advertise your property as available to Section 8 voucher holders. You can list it on housing authority websites, local classifieds, and standard rental platforms.
Apply your standard screening criteria—credit, rental history, background checks—to all applicants, including voucher holders. Do not apply different standards based on source of income.
Once you select a voucher holder, they submit a Request for Tenancy Approval to the housing authority. You'll provide lease terms, rent amount, and property information.
Schedule the initial HQS inspection. If repairs are needed, complete them and request re-inspection. The tenancy cannot proceed until the property passes.
Sign the lease with the tenant and the HAP contract with the housing authority. The lease term must be at least one year for initial Section 8 leases.
Begin receiving monthly rent payments—housing authority portion directly from the PHA, and tenant portion from the tenant.
Participate in annual recertifications and inspections. Address any inspection failures promptly to maintain program eligibility.
Regular maintenance ensures you'll pass annual inspections without scrambling for last-minute repairs. Treat HQS compliance as baseline property management, not an extra burden.
Establish positive working relationships with housing authority staff. They can provide guidance, expedite inspections, and assist with tenant issues.
Ensure voucher-holding tenants understand their responsibilities—paying their portion of rent on time, maintaining the property, and complying with the lease. Provide the same orientation and expectations as you would for any tenant.
Keep thorough records of inspections, repairs, rent payments, and communications with the housing authority and tenant. If disputes arise, documentation is essential.
If you need to terminate a Section 8 tenancy, follow both California landlord-tenant law and HUD program requirements. Notify the housing authority in addition to the tenant, and ensure you have just cause if the property is subject to AB 1482.
Refusing to accept Section 8 vouchers violates California's fair housing laws. Penalties for source of income discrimination include:
Given these risks, landlords who prefer not to participate in Section 8 should consult legal counsel about whether any exemptions apply or reconsider their policy in light of the benefits and legal requirements.
Section 8 represents both a legal requirement and a business opportunity for California landlords. With SB 329's source of income protections, refusing voucher holders is no longer an option for most landlords. Rather than viewing Section 8 as a burden, savvy landlords recognize the benefits: guaranteed rent, lower vacancy, and access to a large tenant pool.
Success with Section 8 requires understanding the program, maintaining properties to HQS standards, and treating voucher holders with the same professionalism and respect as all tenants. By doing so, you can build a stable, reliable rental income stream while complying with California's fair housing laws.
For Placer County landlords managing properties in Roseville, Rocklin, Auburn, and surrounding areas, Lifetime Property Management has extensive experience with Section 8 tenancies. We handle HQS inspections, housing authority coordination, lease compliance, and tenant management for voucher holders. Our expertise ensures you maximize the benefits of Section 8 while minimizing administrative burdens and legal risks. Let us manage your Section 8 tenancies professionally while you enjoy predictable, reliable rental income.
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