Section 8: Recession's Golden Ticket
Business + Economy

Section 8: Recession's Golden Ticket

CHARLOTTE — It was clear that Liza Jackson’s luck had changed when she drove her pearl-white Dodge sedan, the one with the huge pink plastic eyelashes over the headlights, into Pinebrook, an eight-year-old subdivision where residents tend to notice cars with huge pink eyelashes.

“There goes the neighborhood,” one homeowner said when she heard that her potential new neighbor had a federal housing voucher known as a Section 8.

But Jackson could well be Pinebrook’s salvation, a means by which landlords can rent an empty, crime-magnet of a house to a tenant with a steady, government-backed check.

From Jackson’s point of view, the dismal housing market appeared as a glorious reversal of fortune: Fresh swaths of suburbia were opening up to the very people it has so often excluded.

She had seen one house, and now she rolled up to another, a tan three-bedroom with red shutters. She got out and looked around, a vaguely glamorous vision crossing the grass in a long, leopard-print dress. She peeked into the windows, making out what appeared to be vaulted ceilings.

“Dang,” Jackson said approvingly.

She put the house, a foreclosure turned rental, on her list of possibilities.

The reasons for this irony are mostly familiar. A steadily dropping homeownership rate, 5 million to 11 million more foreclosures in the pipeline, and a raft of investors buying them up have led to a proliferation of rentals in the land of lawns and cul-de-sacs.

But as housing prices keep slipping and the economy remains shaky, there’s been another shift as more landlords view the approximately 2 million American families with a Section 8 voucher — which essentially subsidizes fair-market rent for people who can’t afford it — as among the best ways to fill an empty house.

“It’s guaranteed money,” said David Benham, who owns several rental properties and is a founder of the Benham REO Group, which sells bank foreclosures to investors in 35 states. “It has a great accountability program with the renters. I love Section 8. I wish every one of my properties was Section 8.”

So for a group of Americans previously blocked from certain neighborhoods by “not in my back yard” politics, high prices and a lack of rental options, this is a minor bonanza. Those with a Section 8 voucher, a key federal program for the poor, are a fraction of those who need it; waiting lists are full and years long. But they are a lucky fraction. In the recession-era economy, the voucher is becoming a golden ticket to almost anywhere, a point hardly lost on Liza Jackson, whose cellphone was now ringing Lil Wayne.

“Yes?” she said, answering in the prim manner she described as her “white voice.” “I had called about the four-bedroom, two-and-a-half bath? Yes. Liza. Like Minnelli.”

Read more at The Washington Post.