D. Section 8 (Tenant and Project-Based) Housing Section 8 (Tenant and Project-Based) Housing

• Jurisdiction: New York

D. Section 8 (Tenant and Project-Based) Housing

1. The Voucher Program

The federally funded "Housing Choice" voucher program, often called a "Section 8" voucher because the program is delineated in Section 8 of the United States Housing and Community Development Act of 1974, is a common form of tenant-based rental assistance in which, unlike public housing, the subsidy attaches to the tenants, who are free to choose their homes, including those owned by private landlords, and a pre-determined portion of the rent is paid directly to the landlord under the auspices of the Section 8 program, with the tenant responsible for the balance of the rent.⁴⁸² Generally, these vouchers are portable, in the sense that tenants may carry the benefit of the voucher to a new rental unit if they decide to move. Assistance under the program may also be project-based, in which the subsidy is attached to a specific unit or building rather than a particular tenant.⁴⁸³ Landlords participating in the project-based voucher program may receive a federal subsidy for maintaining the building when there are occupancies that are intended to be filled by low-income families, for a period of not more than 60 days.

The subsidies are provided in two instances: where a family vacates before the expiration date of the lease or where a landlord acts in good faith to fill the unoccupied unit. Private landlords contract with HUD to participate in the Section 8 housing program by way of an "assistance contract" or "housing voucher contract."⁴⁸⁴ The assistance contract specifies the amount of the subsidies owed to the landlord by the government and outlines the program's terms and conditions. ⁴⁸⁵

Section 8 is administered by the U.S. Department of Housing and Urban Development (HUD) and local public-housing authorities through annual contributions contracts under which HUD disburses funds to public-housing authorities that, in turn, pay subsidies directly to Section 8 landlords or their authorized agents.⁴⁸⁶ Landlords may collect subsidies based on the "family" occupying a unit; a "Tenancy Addendum" must be included in all leases and identify any tenant seeking subsidies.⁴⁸⁷ Individuals may be added to the household with prior written approval from the Housing Authority. Section 8 tenants are then obligated to their landlords for the remainder of the rent.⁴⁸⁸ If there is no local public-housing agency, HUD may provide funding directly to the building owner. ⁴⁸⁹

In New York State, federal Section 8 subsidies are administered by various state and local agencies, including DHCR, NYCHA and the DHPD in New York City,⁴⁹⁰ and various county agencies in counties outside New York City. These public-housing authorities pay subsidies directly to Section 8 landlords or their authorized agents,⁴⁹¹ and the tenants then pay their landlords the remainder of the rent directly.

Qualifications for Section 8 mirror those for public housing, except that stricter income limits are imposed. Generally, household income may not exceed 50% of county or metropolitan-area median income. Seventy-five percent of vouchers are allocated to households with incomes below 30% of the median. The voucher subsidizes the difference between 30% of family income, less utilities if not included, and the market rent of a moderately priced apartment, as the local housing administrator determines. If the family contribution, with utilities, does not exceed 40% of the family income, a voucher-holder may rent a unit above the rent standard but must pay the difference. A family's income and composition are re-examined annually to ensure continuing eligibility,⁴⁹² and payment amounts may be adjusted based on changed income or increased rent.⁴⁹³ In addition to the other requirements, voucher applicants cannot have been evicted previously from public housing or any Section 8 program for drug-related criminal activity. ⁴⁹⁴

The sole agreement between a voucher-holder and the landlord is the lease, and the landlord executes a housing assistance payment (HAP) contract with the Section 8 agency.⁴⁹⁵ The landlord may not add any charges to the rent.⁴⁹⁶ If a tenant's family includes members with different eligibility statuses, the family is considered a mixed family. Ineligible persons are not counted for the subsidy level, and the family's subsidy is prorated accordingly. ⁴⁹⁷

Once located, a rental unit must be inspected to ensure that it meets a HUD-mandated housing quality standard (HQS). The landlord is obligated to maintain this standard. The lower courts have divided over whether a landlord may bring a holdover proceeding where the tenant's lease terminates after the housing authority suspends or terminates the payments assistance contract based on the landlord's failure to maintain the federally mandated housing quality standard,⁴⁹⁸ an issue on which the appellate courts have not yet passed. If a landlord opts out of the voucher program and refuses to renew the lease, a new voucher will issue, giving the tenant 180 days to secure alternative housing.⁴⁹⁹ A landlord that commences a nonpayment proceeding against a Section 8 tenant may not recover from the tenant that portion of the rent covered by the Section 8 voucher, even if the lease is terminated or the Housing Authority stops paying the Section 8 portion of the rent, unless the parties entered into a new rental agreement.⁵⁰⁰ It is unclear what constitutes a new rental agreement that would obligate the tenant to pay the full contract rent; but it is clear that a renewal lease obligating the tenant to pay the full rent does not.⁵⁰¹ A tenant who fails to vacate after the HAP contract ends might, however, be liable for the full rent.⁵⁰²

Because a rent-stabilized renewal lease must reiterate the same terms and conditions as the expiring lease and because a landlord may not refuse to renew a Section 8 voucher in a rent-stabilized tenancy,⁵⁰³ a voucher used to secure rent-stabilized housing is a term and condition of the lease that must be incorporated into any subsequent lease renewal. In 1996, Congress amended the Section 8 statute to allow landlords to cease participation in the Section 8 program by eliminating the "endless lease," whereby landlords are now able to opt-out of Section 8 at the end of the tenant's lease term.⁵⁰⁴ The Court of Appeals in Rosario v. Diagonal Realty, however, held that the endless-lease rule does not preempt New York City's J-51 law prohibiting discrimination against Section 8 recipients.⁵⁰⁵ A Housing Choice voucher can also be used to sublet a cooperative unit, but the cooperative corporation's written consent is required. ⁵⁰⁶

Although the state and its municipalities may promulgate laws prohibiting discriminatory leasing practices based on payment by voucher,⁵⁰⁷ only New York City has acted on this authority, with the passage of a law in March 2008 that bans housing discrimination against any tenant based on source of income, including Section 8.⁵⁰⁸ A New York City landlord may no longer refuse to rent to Section 8 tenants, nor may a New York City landlord refuse a Section 8 voucher from an existing tenant, even if the tenant became eligible for Section 8 benefits after the tenancy began. ⁵⁰⁹

NYCHA allocates Section 8 vouchers to approximately 83,000 families in New York City's five boroughs, more than any other Section 8 program in the United States.⁵¹⁰ In the oft-cited case of Williams v. New York City Housing Authority,⁵¹¹ a class-action suit was commenced in federal court against NYCHA and Section 8 landlords challenging on due-process grounds the eviction procedures landlords used against Section 8 tenants. Williams was settled by two partial consent judgments, the first of which established that before a Section 8 subsidy may be terminated on the basis of alleged conditions in the premises, NYCHA must give the tenant notice and a cure period.⁵¹² If the tenant disputes the allegations or fails to correct the claimed conditions, a follow-up notice must be given. The tenant is then entitled to a hearing before a hearing officer, who is empowered to make a determination, subject to the NYCHA's Board review. ⁵¹³

The second partial consent judgment set out rules governing proceedings in which landlords seek to evict Section 8 tenants. Before Williams, a landlord was required to provide only...