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Today’s Wall Street Journal has a piece about a bizarre trend out there in Real America: Owners of large, luxury housing complexes so desperate for rent that they’re chasing after holders of Section 8 vouchers, who previously had to make do with the most basic accomodations. It’s creating a wider range of housing options for low-income people—-now searcheable on www.gosection8.com—and also shaking up perceptions of what a “section 8” property means for a neighborhood.
That’s a jarring contrast for anyone tuned into housing issues in the District (to get tuned in, scan the Coalition for Smarter Growth’s excellent briefing here). D.C. has about 100 project-based Section 8 buildings—whose landlords sign contracts with HUD to accept the federally-funded vouchers—and no more on the horizon. Between 2000 and 2008, about 2,000 units leaked out of the system. In relatively healthy real estate markets like D.C.’s, the steady income of a Section 8 subsidy isn’t as comparatively appealing, and developers are circling around those properties that stay subsidized while the neighborhood gentrifies around them.
When a neighborhood improves to the point where enough people will pay market rate to live there, project-based Section 8 will often choose to “opt out” of their contracts. Several years ago, Mid-City Financial Corporation did this at the 262-unit Washington Apartments—or, as the website says, “freed [the building] of all its regulatory restrictions.” For the last couple of years, Mid-City has issued opt-out notices at another of its properties in Shaw, a 122 unit complex known as Lincoln-Westmoreland II. If it went through with the notice and raised the rents to market rate, residents could apply for an “enhanced” voucher, which requires a re-screening process. If they qualify, they could either use it stay and pay slightly higher rents, or take it elsewhere—but with the low turnover and decreasing availability of subsidized housing in D.C., nothing’s guaranteed.
At the moment, Lincoln-Westmoreland appears to be safe, according to Mid-City vice president Michael Meers. “I would expect that this property would continue to operate in the way that it has, just based on market conditions,” Meers told Housing Complex. “It’s still a nighborhood in transition.” So, Shaw’s not booming enough yet for ditching Section 8 to be an irresisteble financial proposition. But with the way things are going, that point may not be far off. And there are definitely no luxury Section 8 rentals for Washingtonians.