The Chicago Housing Authority program for Section 8 housing can be a dividing point for many city landlords. While some landlords live by the program, others will avoid it entirely. Why is that? What are the benefits and potential downfalls of a landlord working with CHA? In this post, we will dive into what CHA does, the pros & cons of working with the program, and some frequently asked questions from many owners PRG Management works with. We will be talking to one of our rental property managers, Payton Dalessandro, about some of the ins and outs of the CHA program as well.
Q) What is CHA and what is Section 8 housing?
A) CHA stands for the Chicago Housing Authority, a municipal non-profit organization that provides and finds housing for more than 63,000 households. Created in 1937 to help maintain and operate housing built under the Roosevelt administration’s public works acts - they’ve continued to grow to this day. They create partnerships, deals, and opportunities for no/low-income Chicago residents giving them a safe roof over their heads.
Section 8 of the United States Housing Act of 1987 (referred to as simply, “Section 8”) authorizes the payment of rental housing assistance to private landlords on behalf of low-income households. Essentially Section 8 is what gives the CHA the ability and power to provide the assistance they do. CHA deals with properties, landlords, and violations while Section 8 focuses on the payment and tenant side.
Q) What are the benefits of having a CHA tenant?
A) One thing landlords love about having a CHA tenant is the guaranteed portion of the rent. Paid automatically via ACH - Section 8 will pay typically around 90% or more based on the Fair Market Rent for your metropolitan area. The Department of Housing and Urban Development (HUD) publishes an updated list of rates each year that helps set expectations across the board.
Q) What are the disadvantages of having a CHA tenant?
A) The biggest annoyance many landlords find with the CHA program is not from the tenants themselves but the system and long process. Depending on the situation it can be tedious and drawn out process with all the inspections and approvals that need to take place. This can take several weeks and if the tenants have a child under 6 in the family, this process will take even longer due to more extensive inspections.
Another pain landlords may experience when dealing CHA tenants is rent determination. This process can be a bit complicated so we recommend reading through CHA’s official document for how rent determination and its disputes are decided.
Q) I’ve heard many issues can arise from CHA tenants. Is this true?
A) While this trope about bad CHA tenants still lives today, we have found no data or trends to suggest landlords have more issues renting to CHA/Section 8 tenants than not. It is recommended that you screen CHA applicants the same way you would any other potential tenant.
Q) Can I deny a CHA applicant? What are my options?
A) A CHA applicant’s source of income is a protected class under the Illinois Fair Housing laws. So while you can’t deny a CHA applicant for their income you can deny them if they don’t meet your minimum requirements in other categories (rental history, credit score, etc.) you may deny them like any other applicant.
Q) My house didn’t pass CHA inspection. What do I do?
A) If CHA doesn’t pass your property for an inspection you have two choices: fix the repairs or not. If you still wish to rent out to a CHA/Section 8 tenant you must address the repairs up to the CHA standards. After which you would schedule a new inspection.
Or you could simply not address the repairs. You will no longer be able to continue down the CHA process but you can now rent the property to any non-CHA applicant.
Q) How do landlords get paid through CHA?
A) The CHA/Section 8 payment process is quite simple and one of the biggest advantages for landlords. Prior to your tenant’s first month of occupancy, you will submit a form to CHA with your banking information that allows you to receive automatic deposits on the first of every month.
Q) I’m unable to handle the CHA inspections and paperwork on my own. What can I do?
A) Let PRG Management take care of it! The biggest reason landlords and property owners hire property management companies is the sheer amount of time and effort that is put into managing even just one CHA property/unit. We can ensure owners are getting the best return on their investment with no stress involved. Call us at (312) 600-8896 today to get a FREE management proposal!