Real Estate

Rising Number of Housing Voucher Recipients Can’t Find Places to Live in Montana

Montana has an overall shortage of affordable and attainable rental housing stock, a crisis that pushed people out of their communities

By NICOLE GIRTEN, Daily Montanan
Homes in Whitefish on June 30, 2022. Hunter D’Antuono | Flathead Beacon

Nearly a quarter of Montanans who use housing vouchers weren’t able to use them this year through June, according to data from Montana Housing, under the Department of Commerce — up from nearly 19% in 2021.

“There’s nothing more disheartening for my team, and certainly for the family that’s waited for that voucher, than to look for a rental unit for four months and not being able to use the voucher that you’ve received because you can’t find anyone that will rent to you,” said Montana Housing Division Administrator Cheryl Cohen during a presentation on rental assistance programs Thursday.

Montana has an overall shortage of affordable and attainable rental housing stock, a crisis that pushed people out of their communities and in some cases onto the streets. For those few thousand a year that get assistance, it’s still not enough.

The U.S. Department of Housing and Urban Development — HUD — oversees Section 8 voucher distribution paying out 90% to110% of “Fair Market Rents” assessed from surveys. Cohen said the data from these surveys lags a couple of years – with the rates released last month based on community surveys from 2017 to 2021.

The problem is worse for Veterans Affairs supportive housing, where out of the 374 vouchers given out in the state, 143 haven’t been used in 2023, up from 118 in 2022 and 90 in 2021. Cohen said this gap is in part due to staffing shortages at the V.A.

Even worse was Section 811 housing, where more than 70% of vouchers for disabled Montanans under 62 years old went unused.

Cohen outlined a number of barriers to why vouchers don’t get used in the 120 days people have to find a place, largely that it’s hard to get property owners or managers on board. Vouchers don’t cover in full what owners could be charging in Montana, leaving them at a couple hundred dollar loss.

“I’ve been a property manager, and if I can rent my unit for $1,400 to one household, or I could rent to a voucher holder but only get $1,200 a month, it’s basic math,” Cohen said.

For Section 811 housing vouchers, Cohen said at least three properties that were supposed to provide units for people with disabilities never did, and the department is working to find other properties to partner with.

HUD, which oversees voucher distribution, is also putting in more requirements for property inspection, a challenge for aging properties. Cohen said lead-based paint hazards could be an example of something the department would be inspecting.

Renters with vouchers also may not have a credit score that can compete with other renters in the market, as well as an overall stigma, with some property owners outlining in their rental advertisements that Section 8 voucher recipients need not apply.

Sen. Mary Ann Dunwell, D-Helena, said she’s heard from property owners who wouldn’t mind losing the cash for the greater cause, but find the red tape a barrier. She asked if the state could create incentives to participate in the program.

Cohen said rent isn’t the only concern, citing inspections, and her department is sending out a survey to residents and property owners in the program to see what could be done better.

Dunwell asked what happens to renters who don’t find housing with the vouchers, to which Cohen said after 120 days, the department can’t do much. She said previously with federal COVID-19 relief funds, the department was able to utilize emergency rental assistance funds, which included funding for someone to help them find housing.

“It can be a challenge for any renter to find an affordable unit, and so if you’re a family that has other challenges, or maybe poor credit or rental history, having someone that helps them serve that dialogue between you and the landlord can be a real benefit,” Cohen said.

Sen. Jeremy Trebas, R-Great Falls, said he no longer rents out residential property but agreed with the challenges Cohen laid out to participate in the program. He remembered inspectors finding issues he said were not worth fixing, “given that the market rent was going to be higher anyway without dealing with the vouchers.”

He said it was “a rock and a hard place” issue.

This story originally appeared in the The Daily Montanan, which can be found online at dailymontanan.com.