Still in Search of Decent Housing A Five Year Reflection on Discrimination Against Housing Choice Voucher Holders in the District of Columbia This report, issued on the fifth anniversary of the ERC’s report highlighting the plight of Housing Choice Voucher holders in the District, is dedicated to all those committed to equal housing opportunity in our nation’s capital. The Equal Rights Center 11 Dupont Circle, N.W. Suite 450 Washington, D.C. 20036 www.equalrightscenter.org April 2011 © Equal Rights Center - 2011 All Rights Reserved 1 Table of Contents About the Author 3 Executive Summary 3 The Washington D.C. Housing Market 5 The Housing Choice Voucher Program 6 Protections Against Source of Income 7 Discrimination in Washington D.C. Project Overview 8 Project Methodology 9 Test Results 10 Conclusion 11 2 About the Author The Equal Rights Center Originally formed in 1983, the Equal Rights Center (the “ERC”) is a national non-profit civil rights organization dedicated to promoting equal opportunity in housing, employment, public accommodations and government services. With more than 2,200 members in 42 states and the District of Columbia, the ERC uses a comprehensive approach to advance civil rights, including counseling, education and outreach, research and investigation, advocacy and enforcement. Working in the District and across the United States for nearly 30 years, the ERC has developed an expertise in civil rights testing that has been recognized by federal and state governments, civil rights organizations, and the courts. Executive Summary In addition to federal civil rights protections, residents of the District of Columbia benefit from the D.C. Human Rights Act (the “DCHRA”), one of the most expansive human rights acts in the country. Building upon the seven federally protected classes (race, color, religion, national origin, gender, familial status and disability), the DCHRA offers protections to twelve additional groups including “source of income.” Under the DCHRA, the District’s landlords and property managers are prohibited from discriminating against an individual because he or she wants to pay rent with various types of funds, including government subsidies such as Housing Choice (formerly Section 8) Vouchers (“HCV”). Currently assisting more than two million American families, the Housing Choice Voucher Program (“HCVP”) is the largest federal housing subsidy program. The HCVP allows qualifying families to obtain market-rate housing in locations of their choice. Because HCV’s are “portable,” they promote diversity with respect to race, ethnicity, and socioeconomic status, and 3 allow families to move into neighborhoods close to jobs, better schools, and necessary services. More than five years ago, the ERC began conducting a groundbreaking testing investigation consisting of more than 100 tests of 75 housing providers to determine compliance with the source of income protections of the DCHRA, and in 2005 published, In Search of Decent Housing in the D.C. Metropolitan Area: The Affordable Housing Crisis for Section 8 Voucher Holders. This report documented a staggering 61% rate of discrimination against voucher holders—including a 26% rate of outright refusals of their vouchers and a 35% rate of encountering limitations that would bar most voucher holders from renting available units.1 In the following five years, through a program of education, outreach and enforcement, the ERC reached more than 20 agreements with D.C. landlords and property managers to open more than 15,000 apartments to HCV holders. In 2010, the ERC undertook a second testing investigation of District housing providers to determine if compliance with source of income protections had improved. The ERC conducted 91 tests consisting of 42 management companies and 38 landlords in all four quadrants of the District. Although compliance with DCHRA source of income protections has improved dramatically, the recent testing found that 45% of people seeking to rent housing with an HCV continue to face discrimination—with 15% being met by outright refusals to accept vouchers, and another 30% faced with some kind of discriminatory barrier to the use of their vouchers. This revisiting of source of income discrimination in the nation’s capital demonstrates that the plight of HCV holders has, in fact, improved over the last five years. However, much remains to be done. When nearly every other attempt to use a voucher (45%) is met with some type of discriminatory barrier, our fair housing agencies—both governmental and private—are not protecting this vulnerable population. We must do more. 4 The Washington D.C. Housing Market Between 2000 and 2010, the population of the District of Columbia grew by 5.2 percent to 601,723 people.2 This rapid population increase, combined with the real estate housing crisis, a tight economy, and a generally high cost of living in the District, has created a crisis of insufficient “affordable” housing. Affordable housing is most often defined as housing that does not exceed more than 30 percent of total household income. In the District, it is reported that approximately 40 percent of D.C. households spend more than 30 percent of their income on housing costs, and approximately 20 percent of D.C. households experience “severe” housing affordability problems—spending half or more of their income on housing.3 The average sales price of a single family home in the Washington, D.C. metropolitan area as of December, 2010 was $329,500.4 Due to these high costs, the only alternative for most lowincome families is rental housing. The supply of affordable rental housing in the District, however, is also limited. Since 2000, Washington, D.C. has experienced the 5th highest growth in rent, outpacing cities such as Los Angeles and New York, 4 resulting in raising the average fair market rent for a one bedroom apartment to $1,318.6 This increase in rent is compounded by a shrinking stock of rental housing in the District. Since 2000, the general rental market has shrunk by 19 percent, and more acutely, there has been a drop of almost 30 percent in the lowcost rental market.7 In addition to these rising costs, poverty continues to rise. The D.C. Fiscal Policy Institute concluded that, in 2010, the District experienced its largest single-year increase in poverty since 1995, estimating that the District has 106,500 residents —one sixth of the city’s residents—living at or below the poverty line ($21,800 for a family of four in 2009). 8 This is 11,000 more individuals living in poverty than in the prior year alone, an increase of almost 12 percent. Nowhere is this intersection of poverty and the high cost of decent housing more critical and more painful than among HCV holders. By way of comparison, the median income for a family of four in the District was reported in 2008 to be more than $94,000,9 yet, according to the 5 D.C. Housing Authority in 2008, nearly all the applicants for housing assistance, including the Housing Choice Voucher Program, had incomes of less than $30,000 for a family of four. 10 The Housing Choice Voucher Program One valuable tool used to ameliorate the critical shortage of affordable housing is the Housing Choice Voucher Program (HCVP).11 Initiated in 1974, the HCVP is a federal program for assisting very low-income families, the elderly, and people with disabilities to afford decent, safe, and sanitary housing in the private market.12 The HCVP is administered by the U.S. Department of Housing and Urban Development (HUD), and is the largest federal housing subsidy program, assisting more than 2 million American families each year. 13 Without these vouchers, many families and individuals would be forced to live in unsafe housing or pay more than half of their income for rent.14 Because HCVs are “portable,” i.e., they are not tied to designated housing properties or units, the HCVP helps families move from substandard housing and promotes diversity with respect to race, ethnicity, and socioeconomic status by permitting families to gain access to a wider range of neighborhoods than they could have reached without the voucher.15 Under the HCVP, low-income households receive a voucher through their local public housing agency. A voucher represents a direct payment from the housing authority to the landlord for all or a portion of monthly rent. HCV’s may be used to rent any apartment, single-family home, or townhouse provided: (1) the physical condition of the housing meets federally-established quality standards, and (2) the total monthly rent is no more than the rental payment standard established for that area by the local housing authority. HCV holders are required to contribute 30 percent of their own monthly income toward rent, with the remainder of the monthly rent paid by the local public housing agency directly to the landlord. Local public housing agencies may also provide participating families with additional financial assistance to help cover monthly utility expenses. In 2010, the maximum HCVP payment standards in the District reflected the rapidly 6 rising cost of housing in the nation’s capital. Although factors such as family size and disability affect the size of units for which a voucher holder is eligible, Chart 1 summarizes the increase in maximum rent qualifying for the HCVP in the District in 2010 as compared to 2005: Unit Size 2005 Payment Standard 2010 Payment Standard Efficiency Up to $915 Up to $1272 1 bedroom Up to $1045 Up to $1450 2 bedroom Up to $1187 Up to $1643 3 bedroom Up to $1537 Up to $2120 Chart 1 Though HCV holders are not restricted to where they may seek affordable housing within their jurisdiction, the HCV will expire if not used within a limited period of time.16 If unable to use an HCV within the allotted time, the voucher expires and the family goes to the end of the waiting list to obtain a new voucher.17 In 2011, information provided by the D.C. Housing Authority confirmed that, in the District, there were 10,596 families being served by the HCVP and 34,717 on the waitlist.18 Protections Against Source of Income Discrimination in Washington D.C. Discrimination against HCV holders can have a profoundly adverse effect on the housing choices that are available to home-seekers, and can perpetuate patterns of racial, ethnic, and economic segregation.19 Far too often, a housing voucher is all that stands between a family and homelessness. While not protected at the federal level, discrimination against a person participating in the HCVP is outlawed by civil and human rights laws in more than 13 states and in 30 local jurisdictions, including the District of Columbia and several jurisdictions in Maryland. 20 7 In the District, housing discrimination based on a person’s “source of income,” including HCVs, has been prohibited under the D.C. Human Rights Act, D.C. Code 2-1401.02 (29), since 1977.21 Despite these protections, some landlords and property managers continue to refuse to rent to HCV holders, because of a lack of awareness of their responsibilities under the law, stereotypes about the households who participate in public assistance programs, or as a proxy for discrimination based on other protected demographics such as race or familial status.22 According to HUD, nationally, 62% of voucher holders are designated as racial minorities (42% of voucher holders identified as Black, non-Hispanic), and 48% of voucher holder households are female-headed with children.23 In D.C., these demographics are even more pronounced with 77.9% of voucher holders designated as racial minorities.24 Project Overview In 2005, the ERC conducted a large scale testing investigation of 100 D.C. rental properties to determine the existence and extent of discrimination against voucher holders when seeking rental housing. Trained ERC testers, posing as HCV holders, inquired about the availability of housing and gathered information about the policies and practices of housing providers with respect to the acceptance of HCV’s. The 2005 ERC report, In Search of Decent Housing in the D.C. Metropolitan Area: The Affordable Housing Crisis for Section 8 Voucher Holders, detailed its findings—a 61% rate of discrimination against HCV holders.25 The ERC followed this study with a similar study in the D.C. suburbs in Montgomery County, MD, finding a 15% rate of discrimination against HCV holders. 26 In the five years since release of its first report documenting this discrimination, the ERC has engaged in a concerted campaign to remedy the effects of past source of income discrimination and to prevent future discrimination. This campaign utilized a multifaceted approach, including: Directly collaborating with the D.C. Office of Human Rights in both education and 8 outreach efforts and administrative enforcement efforts; Conducting scores of events reaching out to HCV holders to teach them about the protections available to them; Developing fair housing training courses for landlords and property managers to teach them their responsibilities under the civil rights laws; Commencing more than 20 enforcement actions to require individual landlords and property managers to comply with the DCHRA; Publicizing rental units available to voucher holders through a network of affordable housing agencies; and Negotiating agreements with no less than 20 landlords to make more than 15,000 apartment units available to voucher holders. The ERC’s 2010 testing investigation, consistent in methodology and scope to its 2005 investigation, tested 91 rental properties, consisting of 42 management companies and 38 landlords in all four quadrants of Washington D.C. As in 2005, the 2010 study defined “discriminatory treatment” as: (1) the refusal to accept housing vouchers, (2) limiting the use of vouchers, (3) providing different terms and conditions for voucher holders than for non-voucher holder applicants, or (4) imposing requirements that would effectively bar most voucher holders looking for rental housing. Project Methodology Using the payment standards set by the D.C. Housing Authority, the ERC compiled a list of testable properties comprised of one, two and three bedroom apartments in the District. Over the course of the study, ERC staff periodically re-evaluated and updated this list to ensure geographic diversity and to protect against repeat testing of housing providers. As home seekers’ reliance on the Internet as a resource for housing listings has increased, the ERC’s search for testable properties placed an emphasis on online advertising, particularly on the website “Craigslist.” 9 After a property was identified and its rental rates confirmed to be within the payment standards, an “advance call” was placed to ensure that the property (or units within the property) was available and priced as advertised. In each test, trained ERC testers were provided with a detailed profile including specific personal and financial characteristics—income, household size, and rental history—designed to realistically reflect a HCV holder in Washington, D.C. Each test assignment also contained a list of questions for the tester to ask the housing provider in order for the ERC to determine the treatment of potential HCV renters. Test Results The ERC’s 2010 testing investigation revealed that 45% of the time (41 out of 91 tests) HCV holders were subjected to at least one form of discriminatory treatment—outright refusal to accept vouchers, limiting the use of the voucher, imposing different terms or conditions for HCV holders, or imposing limitations that would effectively bar HCV holders from obtaining the housing. While the most common notion of discrimination is that of an outright refusal to accept an HCV, more subtle forms of discrimination, such as differential treatment and unreturned phone calls about housing availability, also create very real barriers to equal housing opportunity. In its 2010 testing, the ERC documented: Outright Refusals: In 15% of the tests (14 out of 91), landlords or property managers refused outright to accept vouchers. In one blatant example, the housing provider immediately hung up the phone when the tester asked if he or she could use a HCV to pay rent. In another instance, the ERC tester posing as an HCV holder was told that the landlord “did not believe in vouchers.” Another housing provider refused to accept an HCV because he was unwilling to “make any changes to his leasing process” that would give HCV holders the opportunity to rent the property. Differing Terms and Conditions: In 9% of the tests (8 out of 91), the ERC’s 10 investigation showed differential (and adverse) treatment of voucher holders. In two instances, testers were told, although vouchers were accepted at the building, they were only accepted for unit sizes other than those currently advertised as available. In three instances, testers were told, contrary to voucher guidelines, the voucher must cover the entire rental amount. In one instance, a tester was told the apartment building had reached its “quota” of voucher holders, and would not accept any more. Finally, one property manager repeatedly emphasized the “thorough” review he would do with the tester’s previous landlord, citing his belief that voucher holders have a propensity to “tear up the property.” Income Limits: In 21% of the tests (19 of 91) the tester was informed of an income or credit requirement which would effectively bar any and all voucher holders from renting the advertised unit. In one extreme case, one landlord renting a one bedroom apartment for $1,300 a month (well within the HCV rental payment standard of $1,450 per month) imposed a $64,000 income requirement on potential tenants—in effect, creating an absolute bar to all HCV holders (whose average income is only $30,000). Conclusion Housing Choice Voucher holders represent a particularly vulnerable community. Living at the intersection of poverty, race, ethnicity, disability, and ever-rising housing costs, in many instances being able to actually use a voucher, free from discrimination, is all that stands between a family and homelessness. In the last five years, the ERC has worked to remediate source of income discrimination in the nation’s capital, with a successful reduction in this type of discrimination. However, much more remains to be done. Equal housing opportunity can only be achieved through the continued vigilance of housing and civil rights activists and government authorities. With this 11 report, the ERC hopes to demonstrate the persistence of source of income discrimination, and to inspire more advocates to work with the ERC in order to completely eradicate this form of discrimination from our nation’s capital. 1This report is available at http://www.equalrightscenter.org/site/DocServer/Report.pdf?docID=154 U.S. Census Bureau, “2010 Data: Population growth.” Available at http://2010.census.gov/2010census/data/ 3 D.C. Fiscal Policy Institute, “Nowhere to Go: As D.C. Housing Costs Rise, Residents Are Left with Fewer Affordable Housing Options,” (February 2010). Available at: http://D.C.fpi.org/nowhere-to-go-as-D.C.housing-costs-rise-residents-are-left-with-fewer-affordable-housing-options 4 See National Association of Realtors, “Existing Home Sales for December 2010.” Available at http://www.realtor.org/research/research/ehsdata 5 D.C. Fiscal Policy Institute, “Nowhere to Go: As D.C. Housing Costs Rise, Residents Are Left with Fewer Affordable Housing Options,” (February 2010). Available at: http://D.C.fpi.org/nowhere-to-go-as-D.C.housing-costs-rise-residents-are-left-with-fewer-affordable-housing-options 6See National Low Income Housing Coalition, “Out of Reach 2010.” Available at http://www.nlihc.org/oor/oor2010/ 7See D.C. Fiscal Policy Institute, “Nowhere to Go: As D.C. Housing Costs Rise, Residents Are Left with Fewer Affordable Housing Options,” (February 2010). Available at http://D.C.fpi.org/nowhere-to-go-asD.C.-housing-costs-rise-residents-are-left-with-fewer-affordable-housing-options 8 Id. 9See Yolanda, Woodlee, Washington Post, “Agency is Updating Housing Aid Wait List.” Available at http://www.washingtonpost.com/wp-dyn/content/article/2008/01/15/AR2008011503507_pf.html 10 Id. 11The regulations that govern this program may be found at 24 CFR Part 982. 12See U.S. Department of Housing and Urban Development, Housing Choice Voucher Fact Sheet. Available at http://www.hud.gov/offices/pih/programs/hcv/about/fact_sheet.cfm 13 U.S. Department of Housing and Urban Development’s Resident Characteristics Report, at https://pic.hud.gov, accessed September 29, 2008, shows 2,208,802 voucher units under contract between HUD and program administrators. 14 U.S. Department of Housing and Urban Development, Office of Policy Development and Research, “Affordable Housing Needs 2005: Report to Congress,” (2007). 15Martha M. Galvez, “What Do We Know About Housing Choice Voucher Program Location Outcomes?” (August 2010). Available at http://www.urban.org/UploadedPDF/412218-housing-choice-voucher.pdf See also: Austin Turner, Margery. Popkin, Susan J. Rawlings, Lynette, “Public Housing and the Legacy of Segregation” at p. 79, ch. 3 – Moving to Neighborhoods of Opportunity: Overcoming Segregation and Discrimination in Today’s Housing Markets. 16 Voucher holders in the District have up to 180 days to use vouchers (an initial 60 day period and up to 120 days in extensions). Data provided by: D.C. Housing Authority’s Dena Michaelson, Director Public Affairs and Communications, April 2011. 17 Baran, Madeleine, The New Standard, “Economic Hardship Causing Drastic Increase in U.S. Homelessness.” (September 12, 2004). Available at http://newstandardnews.net/content/index.cfm/items/978 18 While the D.C. Housing Authority advises that it does not keep information on the average length of time an individual remains on its waitlist before obtaining a voucher, it has been reported that tenants in our nation’s capital can wait an average more than six years to receive a voucher. Data Provided by: D.C. Housing Authority’s Dena Michaelson, Director Public Affairs and Communications. 19 See Poverty & Race Research Action Council, “Keeping the Promise: Preserving and Enhancing Housing Mobility in the Section 8 Housing Choice Voucher Program.” Available at http://www.prrac.org/pdf/AppendixB-Feb2010.pdf 20Center for Policy Alternatives, “Source of Income Discrimination.” Available at http://www.cfpa.org/issues/issue.cfm/issue/SourceofIncomeDiscrimination.xml. 2 See 12 21Even in jurisdictions without source of income protections, landlords participating in the federal LowIncome Housing Tax Credit Program, which provides tax incentives to investors who develop low-income housing, are prohibited from discriminating against potential tenants because they have HCV’s. See, e.g., 26 CFR § 1.42-5 22 Thabault, Isabelle M. and Platts-Mills, Eliza T., Poverty & Race Research Action Council, “Discrimination Against Participants in the Housing Choice Voucher Program: An Enforcement Strategy.” Available at http://www.prrac.org/full_text.php?text_id=1071&item_id=9757&newsletter_id=85&header=Economic+%2 F+Community+Development 23See Department of Housing and Urban Development, “A Picture of Subsidized Households-2008.” Available at http://www.huduser.org/portal/picture2008/index.html 24Housing Choice Voucher Holders by Race/Ethnicity, 2000. Available at http://diversitydataarchive.org/Data/Rankings/Show.aspx?ind=165 25The full text of this report is available at, http://www.equalrightscenter.org/site/DocServer/Report.pdf?docID=154 26See Equal Rights Center, “A Step Away From Homelessness—Housing Choice Voucher Holders Denied Housing in Montgomery County, MD” (2008). Available at http://www.equalrightscenter.org/site/DocServer/Montgomery_County_Section_8.pdf?docID=150 13