The Waiting List

In my last column, I advocated for asking good questions and shared a few of my own questions about affordable housing in the Lynchburg area. These questions were sparked by a small sign in the Lynchburg Redevelopment & Housing Authority (LRHA) office that read “SECTION 8 WAITING LIST IS CLOSED” and “PUBLIC HOUSING WAITING LIST IS CLOSED.” Since then, I’ve been out meeting with housing experts to try to find answers to those questions. I recently sat down with Dawn Fagan, the executive director of LRHA, to learn about these two housing programs, their waiting lists, and the complex world of affordable housing.

Before we get to the waiting lists, we need to understand LRHA’s two major programs: Section 8 and Public Housing. Both are income-based housing assistance programs funded by Housing & Urban Development (HUD), a federal government agency. Of LRHA’s approximately $7,000,000 annual budget, roughly 60% is allocated to Section 8, while about 30% goes to Public Housing.

Section 8, otherwise known as Housing Choice Vouchers, is a rental assistance program where an eligible person is issued a voucher to help cover a portion of their rent. LRHA administers the program, but HUD sets the guidelines for the program and funds it. To qualify for Section 8, a family must have income below certain levels set by HUD. For an eligible family with a Section 8 voucher, their portion of the rent is capped at 30% of their income, while LRHA then covers the rest of the rent.

With a voucher in hand, a tenant goes out into the private market to find a place to rent. Section 8 doesn’t work without private landlord partners willing to accept vouchers. By accepting Section 8, the private landlord agrees to HUD regulations about property inspections, housing quality standards, and rental rates. The benefit to the landlord for accepting Section 8 is the guarantee of receiving the government’s portion of the rent every month. In 2018, LRHA administered Housing Assistance Payments of approximately $3,750,000 in the City of Lynchburg. Divided by the 750 housing choice vouchers issued on average, the average housing assistance provided per voucher was approximately $5,000 per year or about $417 per month.

Public Housing represents units that LRHA actually owns and manages. LRHA is the landlord for 328 Public Housing units in four locations across Lynchburg: Dearington, Birchwood, Langview, and Brookside.

Like Section 8, eligibility is determined by income and rent is calculated by multiplying an eligible family’s household income by 30%. The rent paid by the tenants falls well short of what it actually costs to own, manage, and maintain these properties, so HUD pays an operating subsidy to LRHA to make up the difference of what the rent doesn’t cover.

As Fagan puts it, “Both programs make the landlord whole while keeping rent affordable for the tenant. In Section 8, we make the landlord whole. In public housing, HUD makes us whole.”

The answer to why these waiting lists exist is fairly simply: Demand for these programs exceeds supply.

On the demand side, these two programs exist because people across our country are struggling to find and pay for suitable housing. Lynchburg is no different. According to 2017 Census data, 22.3% of the City’s residents live below the poverty line, and 50% of Lynchburg’s housing units are renter-occupied. Of those 14,172 families who rent in Lynchburg, 55.5% pay more than 30% of their annual income on rent. In the housing world, you are “rent-burdened” if you pay more than 30% of your income on housing costs. So, in Lynchburg, we have over 7,000 families that are rent-burdened. Due to the difficulty of making ends meet when over a third of your income goes to just staying under roof, programs that offer tangible relief to housing cost burdens are in high demand.

While demand is high, supply for these programs is fixed. Public Housing is limited by the actual number of physical units that they own, while the hard upper limit on Section 8 supply is the amount of funding received from HUD every year. With 328 Public Housing units and a typical figure of 750 vouchers issued at any one time, the quantity of housing assistance that LRHA can supply hovers around 1,078 families.

Currently, the Section 8 waiting list has 140 families on it, while the Public Housing waiting list has 176 families on it. How long of a wait are we talking? “Our waiting list moves based on turnover,” says Fagan. “No turnover, then the list doesn’t move.” Possible sources of turnover include a tenant choosing to move, a tenant’s financial situation changing for the better (i.e. a new job that pushes them over the income limits), and evictions, which can occur due to lease violations or non-payment of rent. LRHA averages 96 turnovers per year for Section 8 and 80 turnovers per year for Public Housing, so it may take a year and half to two years just to work through the current waiting lists.

So, why is the waiting list closed? “If the waiting list was open, it would balloon,” says Fagan. “Some housing authorities have 10-year waiting lists. It just grows and grows and grows. If I’m having a housing crisis, it’s today, not 10 years from now. I don’t want to inflate anyone’s hope that we can help them sooner than we can. Closing the waiting list allows us to work through the existing list of people in need. The last time the Section 8 waiting list was opened, 600 applied in 30 days. That’s the same group that we’re still working through now.” The waiting lists are closed for a purpose: To keep the list at a manageable level and to not give false hope.

LRHA recently announced that the Public Housing waiting list will be open again for 30 days into April. When it opens, applications will surely flood in and cause the waiting list to balloon again. Those families who make it on the list will then do their best to stay housed for a few years until their number is called. Many housing advocates hope that the federal government will expand funding for Section 8 to meet the high demand, but, until that day comes, LRHA will continue to do the best they can with the resources they do have. For our city, LRHA’s hard work makes affordable housing a reality for over 1,000 families.

About the Author: Billy Hansen, MAI is a commercial real estate appraiser, broker, writer, and teacher serving the Central Virginia area.

(Originally Published in Lynchburg Business Magazine - April/May 2019 Issue)