Charlotte wants more landlords to accept vouchers

“No Section 8,” a common phrase on property listings, perpetuates segregation in Charlotte, shutting people out of housing based on their source of income.

• A policy approved by City Council is poised to change that, but it will only solve part of the problem.

Driving the news: After a years-long effort from more than 30 organizations led by Charlotte’s housing authority, INLIVIAN, Charlotte City Council advanced protections against what housing advocates call source of income discrimination in city-funded projects.

• That means landlords cannot disqualify potential tenants from renting an apartment based on the type of income they receive. That could be a Housing Choice Voucher, also known as Section 8, or it could be another form of income, like social security or child support.
• The protections will only apply to developments that receive some type of city money, like property tax reimbursements for economic development projects.

Why it matters: Poor families in Charlotte are being locked out of housing in the neighborhoods that could help lift them out of poverty.

• In a phone survey conducted in 2019, 96.5% of properties contacted near the LYNX Blue Line said they did not accept vouchers, per a brief issued by INLIVIAN in 2020.
• The 3.5% that did were projects that received state tax credits for affordable housing, which require them to accept vouchers.

The big picture: Segregation, a local study found, is the “cross-cutting factor” that led to Charlotte’s dead-last ranking among 50 cities for economic mobility.

• “Source of income discrimination basically forces and traps families right where they are,” Fulton Meachem, president and CEO of INLIVIAN, tells me.”If they’re able to find a place to live, they could pretty much only live in that crescent of poverty. … It is, by definition, segregation.”

Zoom out: The federal government’s primary housing assistance system for low-income families is broken.

• The Housing Choice Voucher program isn’t keeping up with demand. INLIVIAN says it serves 4,580 families, but 5,610 are on the voucher waitlist. There’s a need for more than 23,000 affordable housing units for Charlotte’s poorest residents.
• Then, because of the lack of available homes to rent with a voucher, some who do have vouchers wind up homeless. In 2019, 21% of voucher holders could not find a unit to rent before their voucher expired, per INLIVIAN’s brief. Even for those who were successful, it took, on average, 73 days to find a home.

Yes, but: The city’s policy doesn’t go as far as housing providers and advocates initially wanted.

• They pushed the city to amend its Fair Housing Ordinance to include language protecting against source of income discrimination. That would have applied to all landlords, a step that dozens of cities like Atlanta have already taken.
• But the city says it would need permission from the North Carolina General Assembly to do so.

Ryan Carter, a consultant who worked with INLIVIAN and the All Income Counts Coalition (the organizations that partnered to fight for source of income protections), says he’s frustrated with the slow pace of progress. INLIVIAN started advocating for the issue in 2017.

• The source of income protections will apply to future city-supported development, Shawn Heath, special assistant to the city manager and interim director of Housing and Neighborhood Services, said in an emailed statement to Axios.
• “There are so many opportunities where these are going to be transformative areas that now will be exclusively for high-income individuals, and those who work in these facilities will never be able to live there,” Carter says.

What they’re saying: Heath told council that the eventual goal is to even the playing field between prospective tenants with a voucher and those without.

• “The recommendation tonight will not solve that completely,” he said in a recent meeting. “But it’s one step in the right direction.”

Background: The city set up an ad-hoc committee last year which produced three recommendations, including the source of income policy. It also recommended the county consider a similar rule.

Mark Ethridge, one of the committee’s co-chairs and operating partner with the privately-financed Housing Impact Fund for affordable housing, has received a flood of calls in the last year from agencies looking to house people with vouchers. His properties accept vouchers, but they are often almost completely full.

Part of the problem is the stigma against tenants with vouchers, he says. But the process of renting to a voucher holder also involves more paperwork and an inspection, which can delay the typical timeframe for leasing an apartment.

• That’s why the committee made its second recommendation, he says, which is to increase public and private funding to organizations that can help expand participation in the voucher or other rental subsidy programs. For instance, he says, those groups could help cover a larger security deposit, or pay rent after a tenant has signed a lease during the time it takes to complete the inspection.
• “You could literally make the same amount of money and change someone’s life,” Ethridge says. “That, to me, should be enough for people to get off their seat and do it.”

Kim Graham, executive director of the Greater Charlotte Apartment Association and the other co-chair of the ad-hoc committee, says the goal is to incentivize more landlords to voluntarily accept rental subsidies.

• She doesn’t believe the shortage of properties that take vouchers is about racial discrimination. “I think that it’s easy to default to that, right?” she says. “But I think that is not the fair way out because then that doesn’t acknowledge the limitations of the Housing Choice Voucher program.”

What’s next: Moving forward, landlords will face potential fines for breaking these rules, according to an enforcement piece of the policy approved by City Council on August 22.

• The county’s source of income rules includes the same penalties as the city.

Here’s what happens if a landlord violates the rules:

• If they cure it within 30 days, there is no penalty. Curing it, Meachem tells Axios, means they house the individual.
• After that, they must pay the denied applicant $100 per day until they cure the violation, or 180 days, whichever comes first.
• After 180 days, landlords must pay a remedy to the city. For their first violation it’s up to $23,000, for the second within five years it’s up to $57,500 and for the third or more within seven years it’s up to $115,000, plus that housing provider/owner could be prohibited from signing future city contracts.