Would You Rent an Apartment to This Woman?

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Would You Rent an Apartment to This Woman?

By JLP | August 28, 2008

I received an email from a reader this morning with a link to this article: Morris Family’s Plight Shows Flaw in Housing Assistance Program. The reader wanted to know my thoughts and the thoughts of AFM readers.

Legalities aside, would you rent an apartment to the lady in the article? I’m not a landlord, nor am I familiar with all the laws involved in being a landlord. That said, I’m not sure I would make a good landlord as I think I’m too soft on people (yes, I’m a softy even though you wouldn’t know it from some of my posts!).

I like the fact that this lady does at least seem to be trying to get her life back on track. I’m all for that! I think that’s awesome.

One thing the article did not mention was how long this lady would receive the housing assistance. If I was a landlord, I’d want to know that information before I made any decisions. I can imagine trying to evict a renter who can’t pay the rent is expensive.

I did think this law seems a bit ridiculous (emphasis mine):

According to the Legal Services of New Jersey (LSNJ), an independent, non-profit group that helps provide free legal help to low-income residents: “New Jersey law makes it illegal to refuse to rent housing solely because a tenant will pay rent with rental assistance.”

The organization also recommends that individuals receiving subsidies should contact an attorney or the state Division on Civil Rights if a landlord refuses to rent to an individual because of poor credit history or the amount of your income.

ISN’T THAT THE POINT OF A CREDIT HISTORY? If I’m a landlord and someone with a poor credit history comes to me and wants to rent an apartment that I OWN, it should be up to me to decide whether or not I want to take a chance on this person. After all, it is MY PROPERTY that’s at risk here.

Rant aside, I do believe in second chances and this lady does at least seem like she’s straightening her life out. If I were a landlord, I’d consider renting to her.

What about you? What are your thoughts?

Topics: Housing Market |

Comments to “Would You Rent an Apartment to This Woman?”

Andy Says:
August 28th, 2008 at 11:54 am

The bit about the rental assistance makes sense. Otherwise what’s the point of having rental assistance? In practice I’m sure it’s easy to deny renting to someone with rental assistance since you can just claim it was for other reasons. Typically the poor aren’t very well protected in practice, regardless of what the law may say should occur.

Chris Says:
August 28th, 2008 at 11:57 am

I have a couple of rental properties and I don’t typically like to rent to people on public assistance for a number of reasons.
1. many time property values will go down if you a good portion of the neighborhood start renting to people on public assistance
2. for a house to be eligle to rent to tenants on Public Assistance, you typically have to have an additonal inspection on your house.
3. typically if the tenant loses his or her eligibility for public assistance, you will be stuck evicting the tenent out.

I had a recent opening in one of my units, where an individual wanted to rent my house but was on public assistance. When I called the agency, they wanted to do an inspection. They also informed me that many times, the tenants can’t change houses without prior permission. The individual had not gotten that permission, so my decision was easy. I elected to go with a different tenant who had the ability to pay each month without assistance and it didn’t require me to go through an inspection.

In this case, I would probably not rent to this woman because she had a recent eviction. If it did come down to where she was the only candidate, then I would require documentation from the assistance agency and would write something into the lease that would make the lease void if she lost the assistance in the future.

JLP Says:
August 28th, 2008 at 11:57 am

Andy,

Although I see your point, I must ask…

What about the landlord? Shouldn’t they have rights too?

Corey Says:
August 28th, 2008 at 12:00 pm

As a landlord, I found it to be a very interesting article. It goes hand in hand with your candy bar/food stamp issues of last week.

Maybe Dowd’s social worker could cosign the lease and ensure that the rent is paid that way if he vouches so much for her, and hold him accountable (Ha) Also, she only looked at 7 apartments in six months. One a month, doesn’t seem particulary motivated to find an apartment. Does she expect they come to her?(Probably, since the $$ is going to her without much work) What about assistance from her “babydaddy?”
Ultimately, how can anyone guarantee that she will pay HER part of the rent. There really is no guarantee that section 8 will pay, never mind guaranteeing she will pay. Having to evict people for non payment is not the easiest thing to do, and it costs money out of my pocket. What happens if you don’t pay a restaurant or taxi bill? You get arrested on the spot!

dollar incense Says:
August 28th, 2008 at 12:10 pm

It makes perfect sense to me that you cant deny someone based on any factor that could be considered discriminatory, including the public assistance factor.

However, she is running into problems because of the eviction/poor credit rating and that *is* a viable reason to deny someone.

If I were a landlord, and had other options for renters, I probably wouldnt go with a high risk candidate with poor credit and an eviction either.

The part of the article that concerns me is: “The organization also recommends that individuals receiving subsidies should contact an attorney or the state Division on Civil Rights if a landlord refuses to rent to an individual because of poor credit history or the amount of your income.”

Can you really sue (and win) because someone denies you based on your credit history?

Marilin Says:
August 28th, 2008 at 12:22 pm

I think there’s something the article doesn’t mention. What kind of apartments is she looking for? Are they specifically for low-income situations? Cause if she’s looking at regular apartments then fat chance she’s going to get one, since she’ll have to come up with first months rent and a security deposit that’s probably equal to the first month’s rent. They probably say ‘okay that’ll be X’ and she, as someone living on welfare, probably doesn’t even have that. I didn’t see anything saying the subsidy would help cover getting INTO the apartment, just the rent after they’ve gotten it. But there are plenty of low income housing around where I live that she could get into EASILY, as they’re not as strict.

Jim Says:
August 28th, 2008 at 12:24 pm

You have to wonder why a law was needed to force landlords to rent to somebody on assistance in the first place. You would think that a guaranteed check via section 8 would be exactly what a landlord wants. However the reality is that a high percentage of people (not all) using section 8 for assistance, will not take care of your property and will often cause lots of stress for a landlord. Who needs this when there are many people needing a place to live, that are getting by on their own and are willing to make the effort to keep the property in good condition. They are trying to pass a law here in Illinois that will make it illegal for landlords to verify income. I wonder why anyone would want to be a landlord if some of these crazy laws get passed. As so often happens when government steps in to “fix” a problem they end up causing a much bigger problem in that there will be fewer rental places to be had because the landlords just don’t want to put up with it any more.

Steve Says:
August 28th, 2008 at 12:50 pm

After all, it is MY PROPERTY that’s at risk here.

Well said JLP, if she doesn’t pay the rent what happens to her? If I don’t pay the mortgage what happens to me? She gets threee months free shelter, and moves on, while I get my house foreclosed on.

The organization also recommends that individuals receiving subsidies should contact an attorney or the state Division on Civil Rights if a landlord refuses to rent to an individual because of poor credit history or the amount of your income.

That comment is crazy. So should I rent to the first one that shows up with the promise of paying, and not care about their ability to pay?

No way would I rent to this lady!!!!

Meg Says:
August 28th, 2008 at 12:54 pm

The “it’s my property and I’ll rent to whomever I want” argument seems valid, but of course it IS illegal to discriminate against potential tenants for race, sexual orientation, etc. So it’s tricky.

However I think it’s totally ridiculous for the State of NJ to basically say “it’s illegal to discriminate against tenants on the basis of their income or credit history.” That’s the stupidest thing I’ve ever heard; God, I’ll never move to the north.

Next they’ll be requiring banks to give mortgages without discriminating on the basis of income and credit. Great idea! Which begs the question: Why would anybody work or save if you can just stay broke and jobless and still have the American Dream (food, home, income, medical care, etc) shoved down your throat via all manner of welfare?

Anyway, I deny people solely because they are paying with government assistance all the time. In Texas (as far as I know) this is not illegal. Tenants seem to know this because they always ask up front “do you accept section 8 vouchers?” If it is illegal, I may take the issue to court on principal alone once I have some free time.

Plus the point is probably moot since from what I’ve been told, landlords are allowed to screen subsidized tenants just like every other tenant; they are also allowed to demand a deposit, evict them, etc. The ONLY difference is that those tenants’ rent comes mostly or fully from the government to you. So you don’t have to deny them “because you’re on section 8;” you can say “it’s because you’ve been evicted before” or “because you have bad credit” or even “because the vacancy has been filled.”

Mr. ToughMoneyLove Says:
August 28th, 2008 at 1:22 pm

I would rent to her on a month to month lease. That gives her chance to prove herself responsible but reduces the risk to the landlord if she is not.

Chris Says:
August 28th, 2008 at 1:37 pm

Jim, I have to disagree about section 8 renters. Typically they don’t trash your rental, because if they get evicted, these get kicked out of the section 8 program. While I don’t have any section 8 houses, I would not hesitate to own in the right area.

David Says:
August 28th, 2008 at 2:36 pm

In Texas, we’re not allowed to deny renting to anyone for race, religion, being on public assistance, ad nauseum, like most of the country, I suspect. I cannot “discriminate” about a lot of things.

What I tell my tenants is that what I *can* discriminate against is lying to me. On the application, I ask if they have a criminal record, and if so, what’s on it. Then I check the public records. Any discrepancy, forget it. I get a list of all the people who will be living there, and if there’s a discrepancy when I come by, we have a problem. Same for cars. I ask where they work, and I call their employer. I check credit ratings, but I don’t put a lot of stock there.

…and in my contract, plain as day, it says, if you acquire a criminal record for drugs, domestic violence, etc, etc, you will be evicted, with no deposit back, period. I don’t allow pets, two- or four-legged, and the first time I see one, you will be evicted, with no deposit back, period. I don’t allow smokers on the property, either, and the first time I find butts on the grass when I do the yards, or smell smoke inside, you are history.

That contract had to get past our public housing office for people on public assistance to rent from me. They helped me tighten up the wording a bit, but my intentions got in there.

I did have an extra inspection before my houses could go on the public-assistance list, but I didn’t have too many things to change to get ‘em past that–I’m proud of my homes, and take good care of them, so it wasn’t a problem.

Your public assistance housing office may or may not be as helpful as mine, but it’s worth cultivating that relationship, if you can. Ours has a landlord’s meeting every couple of months where we can get together and share our adventures, and get the latest news from the Authority.

…And it sure is nice getting some percentage of the rent directly from the City/County Housing Authority, on time, every time. Between that, and being very, very fussy about tenants, I’ve had very few problems in the last three years as a landlord. One problem tenant, and he wasn’t section 8; he’d gotten on drugs while my tenant, and I had to give him the heave-ho. He busted a couple of windows on the way out, so I guess I got off lucky.

Yana Says:
August 28th, 2008 at 3:01 pm

I’m not sure whether I would rent to her. I would not care one iota about her credit bureau record, but would be concerned that she had been evicted. If I were a landlord, I would put a lot of weight on prior rental history and how long at addresses. Section 8 does have standards for clients, but she is new to it. I’m under the impression that bad tenants/drug users, etc, lose Section 8. I think it’s hard to be a landlord. There’s a definite risk there (and always). Maybe I’d take a chance, but I’d have to meet the woman to see what vibes I got from her.

Mrs. Micah Says:
August 28th, 2008 at 4:12 pm

I understand the rental assistance part. Sort-of. As long as they’re going to be able to pay the rent one way or another, that would be ok (I’d check how long it was supposed to last, of course). But the credit history/renting history would make a bigger difference.

I notice they say “credit history” and not “tenancy history” or whatever that is called. Can the latter be considered separate from the former? Obviously landlords care less about your credit cards and more about the fact that you’ve always paid your rent despite other debt. So is that an entirely different thing, since it’s renting and not mortgage?

No Debt Plan Says:
August 28th, 2008 at 10:50 pm

I wonder if you did deny renting to someone on assistance — because again it is your asset — how you would go about defending it. I’m guessing someone would sue you and you’d have to go through the court system. I wonder if it would ever get to the Supreme Court?

Transcendental Success Says:
August 29th, 2008 at 9:40 am

The people on welfare are generally bad renters because they don’t take care of things and the landlord has no leverage on them. Their reputation is shot anyway, which is what a landlord can manipulate other than a damage deposit. I’ve had to evict one welfare family and they busted things on the way out, in addition to making us go to court and not showing up an number of times and yada yada.

That said, I can’t bring myself to discriminate against someone because they are poor any more than you judge them because they’re a woman, gay, black, young, etc. You have to judge on the basis of things that matter or else you’re a bigot. All the the landlord needs is their rent paid on time and the asset kept up. If the tenant can provide that then you have no reason not to rent. Maybe this woman is on a good road now.

Carrie Says:
August 29th, 2008 at 1:14 pm

LA Times also recently ran a story like this 27-yo woman with 3 kids (oldest is 12). Too bad for bad life choices right?

I cannot understand how these women keep on having kids when they can’t afford to take care of themselves. At some point you have to wonder when they make the connection that they can keep doing what they want and someone else (we stupid taxpayers) will take care of them.

Kitty Says:
August 29th, 2008 at 6:01 pm

I’d be very reluctant to rent to somebody with past eviction an bad credit history. I may consider those with no credit history, but known bad history is quite another matter.

I used to rent out my condo, but it was on the expensive side, so I got relatively high income tenants. I didn’t check credit history with my tenants, but I really liked the (very) young couple I rented to - sometimes the first impression is so great that you just go by it. Maybe it was careless of me, but it worked out great - no missed rents, the property kept up better than when I lived there. When I sold it, the buyers couldn’t believe it was rented out and not owner-occupied. But I did know that the guy had a very high paying job. I also asked for both first and last month rent in addition to the deposit, so I had a larger buffer in case of a missed payment.

Mixed feelings about assistance - while checks keep coming it is OK, but what happens if they stop? Still, if I had owned a cheap rental property, I’d rent to poor, but renting a “luxury” condo to poor would’ve been a bit stupid. Not being able to refuse to someone on the basis of income is ridiculous - how do you know they’ll be able to afford rent? Does it mean that if I go to Manhattan and try to rent some nice place on Central Park West (where I probably couldn’t afford to rent a closet), the landlord cannot refuse me because I cannot afford the rent?

“I notice they say “credit history” and not “tenancy history” or whatever that is called. Can the latter be considered separate from the former? Obviously landlords care less about your credit cards and more about the fact that you’ve always paid your rent despite other debt. So is that an entirely different thing, since it’s renting and not mortgage?”
Both are important. Renting history can be a bit misleading. The previous landlord may want to give you great reference just to get rid of bad tenants. Other history may not be available. Regardless, bad credit history means lack of responsibility. No credit history or short credit history may be OK under some circumstances - e.g. your tenant has something against credit cards or your tenant is young and had no time to build credit or if your tenant is an immigrant. You may want to ask for additional deposit in this case or just go by impression - it is a judgement call. But bad credit history means somebody didn’t pay his or her bill(s) on time. This shows lack of responsibility. Debt is debt whether you owe money to a credit card company or to your landlord. It’s important to know that your tenant pays the bills on time.

You want to be at least as careful with tenants then banks are with people they give mortgage to, if not more. You cannot foreclose on your tenants, you can only evict them, but you may lose money in the process. You are an individual, so you have less capital than banks. You have your bills regardless of whether or not rent is coming. You also want people to be careful with your property. So responsibility (or lack thereof) is important.

terry Says:
August 29th, 2008 at 6:24 pm

# Chris Says:
August 28th, 2008 at 1:37 pm

Note t others not familiar with the Section 8 program:

Section 8 provides rent subsidies up to the area median rent. For example, if the area median rent for a 2BR apartment is $1000, 2BR units priced above $1000 can be subsidized only on the first $1000 of rent.

As a result, Section 8 rentals tend to be found in neighborhoods with below-median rents, and not found in neighborhoods with above-average rents.

This also allows participating landlords to charge more for their subsidized units than they could get if the same units were unsubsidized.

For example, in the scenario above ($1000 median rent), opportunities exist to convert unsubsidized $700 units to Section 8 units at $900, since a subsidized Section 8 tenant would typically pay less for the $900 unit than they would pay for an unsubsidized $700 unit.

terry Says:
August 29th, 2008 at 6:38 pm

I’ve taken a property management course, and for extra credit I sat in and watched a morning of eviction trials.

In my area, an eviction makes it very very hard to get any sort of normal mainstream rental housing at mainstream rates.

There ARE a few slumlords who will rent to these people - month to month and at exorbitant rents.

Also, many applicants with credit problems get rejected on the basis of their credit. (Another way landlords deal with bad credit is to require a staggering sum as a security deposit.) It’s entirely legal as long as you establish and follow screening criteria that don’t discriminate in prohibited ways. (Congress added (legal) “source of income” to the prohibited discrimination list in the Fair Housing Act of 1988, but you can still reject someone on the basis of criminal record or bad credit etc.) It’s when you wing it on a hunch without established criteria that you can get into trouble, but it’s still pretty unlikely.

terry Says:
August 29th, 2008 at 6:45 pm

# Marilin Says:
August 28th, 2008 at 12:22 pm

This is indeed a MAJOR obstacle for many low-income people. I look and look and look and I find approx ONE apartment per MONTH I can afford, so I don’t look at nearly as many apartments as most people think I “should” be looking at.

Since I couldn’t afford the move-in costs for a monthly rental, I got into an overpriced WEEKLY rental. Since this rental is sucking up a huge proportion of my income, I cannot save up the money required to move into a cheaper monthly rental.

terry Says:
August 29th, 2008 at 6:49 pm

Meg Says:
August 28th, 2008 at 12:54 pm

It’s entirely legal in an owner-occupied building like an SFR or a duplex, but not in a commercial property like an apartment building.

It’s the same reasoning that makes it illegal for restaurant owners to discriminate on the basis of race, gender, etc.

Stacey Says:
August 29th, 2008 at 9:54 pm

@ Terry, have you thought of managing a property for someone and the owner might give you your apt for free/reduced rent? It happens all the time for on-site property managers in Florida…

Desert Island Boy Says:
August 31st, 2008 at 11:27 am

The question is incomplete. Real Estate transactions in the United States, while generally similar from coast to coast, run into a lot of different computations when you get to matters more complicated than when the rent is due.

These differences arise because Landlord-Tenant relations are dictated by state edict. And as such, state edicts vary from jurisdiction to jurisdiction.

The point I am getting to is that the decision to rent to prospective “at-risk” tenants depends on factors that are allowable by local laws. If there are protections against delinquency, damage, blight, etc., then there shouldn’t be any reason to not rent to this person.

State laws should have provisions for you to deny housing based on objective criteria. The key word is “objective”. And the rule of thumb to keep out of trouble with HUD or your equivalent, is that your objective criteria must be within allowable guidelines AND you must be able to prove that you have applied the same criteria to significantly ALL your prospective tenants.

Keep in mind those factors change depending on your particular situation, the number of units you have available for rent being the primary.

As an side, one should know that Real Estate Investing is primarily a legal activity, actual maintenance and management being secondary. It is very much a legal culture, governed more by edict than sound financial principles.

GRBerry Says:
September 2nd, 2008 at 10:13 am

Caveat: I’m not a landlord. The article doesn’t say why she was evicted (it implies for non-payment), how readily she left when she stopped paying (it implies that she had to be forced out), or whether she left the old apartment in good condition, all of which I would want to know before I made a decision.

However, after 6 months she has only looked at seven apartments? That is somebody who isn’t trying. When I was in my apartment hunting days, seven a week was a reasonable effort level. I know it is tougher with a young child in tow (which I had when house hunting), but she should have looked at a lot more apartments.

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Would You Rent an Apartment to This Woman?