Our Work to Support Landlord Engagement and Incentives
With a tight rental market, tenants have to compete against each other for affordable rental housing opportunities. For some their need is too great to wait for new affordable housing to be built.
The Housing Alliance seeks to increase knowledge of the ways that service organizations can partner with landlords to provide landlords with financial and service incentives to rent to those households with the greatest needs and barriers to finding new housing.
We have furthered strategies that create greater affordable housing opportunities by supporting landlords’ business interests. We continue to develop tools and resources to support strategy replication in other communities across the state.
The Need
Quality and affordable homes are scarce. PA faces a shortage of 220,371 units that are affordable and available for those very low-income households making 50 percent of the area median income. The gap is even greater for households making even less. (National Low Income Housing Coalition)
While housing developers construct new affordable units and advocates request increased public funding to make more units available and affordable, a strategy has emerged to utilize existing housing stock and make it affordable and available to low-income households more quickly. Service organizations that are advocating for low-income households seek out landlords directly and develop an array of service and financial incentives (called “landlord engagement” and “landlord incentives” respectively) so that landlords will rent to those that they would otherwise not prioritize. The housing market is competitive with many more households seeking housing than the number of units available. This means that social service organizations must make their clients (low-income households) more competitive by offering these service and financial incentives.
Reasons households are often screened out and landlords will often not rent to them:
- Low income and / or has a subsidy;
- A history of one or more eviction filings;
- Poor rental and / or credit history;
- History of involvement in the justice system (although the severity of the type of offense which causes a person to be screened out varies by landlord.)
Through our work engaging local social service organizations and landlords directly, we have learned the following that informs our work and next steps.
Via electronic survey[1], “housing locators” employed by social service organizations shared the following about their work to engage landlords.
- Housing locaters are struggling to maintain and recruit new landlords.
- The rental market became even more competitive after the pandemic. Landlords raised rents higher than usual increases, and many landlords struggled to meet their own financial obligations, especially smaller landlords. Those housing locators working to engage with landlords ended up reporting more difficulty just maintaining the landlord relationships that they had.
- They reported that the barriers that were hardest to convince landlords to overlook were a history of evictions and no income even if the household had a subsidy to help them pay rent.
- The most common reason landlords tell social service organization staff that they will no longer work with them is that they were “burned” by the tenant. This likely means that the service organization was not able to address a problem between the tenant and landlord.
- Those that are successful in maintaining and recruiting new landlords and using financial incentives are using upfront incentives such as vacancy payments and a sign-on bonus more so than risk mitigation funds.
- Many communities are still without a formalized landlord engagement strategy, any or enough housing locators, and / or resources for financial incentives. While this was true in a variety of community types, it was more likely lacking in rural communities.
Via a survey of 660 landlords [2], we found:
- Small landlords often struggle financially.
- Two-thirds of small landlords with 20 units or less are struggling financially and over 40% no longer wish to be a landlord
- Previous eviction is one of the most common reasons landlords of any type / size will not rent to a household.
- Most landlords and affordable housing providers will not rent to a tenant with past eviction, that does not have any source of income (even with a subsidy), or has past involvement in the justice system for a violent crime or sexual offense. This finding matched up with the experiences of housing locators in the survey detailed above. Small landlords are more willing than their larger counterparts to overlook some tenant screening criteria if they had assistance of some type.
- Small landlords are more willing than their larger counterparts to overlook some tenant screening criteria if they had assistance of some type.
- Over 80% of small-to-midsize landlords said receiving their top choice incentives would increase the likelihood of a tenant working with homelessness assistance programs and/or making exceptions to their normal screening criteria.
- Small-to-midsize landlords are twice as willing to overlook eviction when tenant has case management and rental assistance than large landlords. However, larger landlords are more willing to overlook lack of income than their small-to-midsize counterparts.
- Two-thirds of landlords cite utilities and repairs for damages caused as increasing their normal business costs.
- Risk Mitigation funds are the reported preferred incentive among landlord and affordable housing providers.
[1] In early 2023, the Housing Alliance distributed an electronic survey to which 100 people collectively serving 60 out of PA’s 67 counties responded. The 100 people represented social service organizations employing staff commonly called housing locators that seek to build relationships with landlords on behalf of low-income households seeking rental housing.
[2] The Housing Alliance conducted an electronic survey to which 660 landlords responded. About 2/3 of these landlords were for-profit owners and property managers with the remaining representing owners, property managers, and developers of housing subsidized in some way most commonly through the Low Income Housing Tax Credit.