US students forced to deal with the reality of homelessness
Homelessness is on the rise in the United States, with students under 18 becoming the fastest growing demographic.
This article was created by Capital & Main. Published with permission.
In 2020, 62-year-old Carrie Rutter is finally ready to move into her home in Orange County, California.
After three years of sleeping in cars and in and out of harsh institutional homeless shelters, Rutter obtained a Section 8 housing voucher to rent an apartment.
But wherever Rutter went, his rental applications were rejected.
“It became clear that my credit history was preventing me from using the voucher,” Rutter told state lawmakers in 2022, pushing for legislation to prevent landlords from using credit reports to deny Section 8 voucher holders.
The following year, the California Legislature approved such a law. Senate Bill 267, which took effect in January 2024, prohibits landlords from denying Section 8 tenants based solely on credit history. Applicants must be given the opportunity to submit pay stubs or other “legally verifiable alternative evidence” that they earn enough to pay their portion of the rent. Colorado has adopted similar measures.
These laws were intended to remove major obstacles to the program’s success. Even though most of their rent is subsidized, many voucher holders are unable to find a landlord who will rent to them. Section 8 tenants pay 30% of their income in rent, and the program covers the rest.
However, a Capital & Main investigation found that some large L.A. landlords ignore the law by continuing to rely solely on credit history to deny Section 8 applicants, failing to consider alternative evidence of ability to pay.
To find out whether some of the Los Angeles area’s largest landlords, including Equity Residential, Essex Property Trust, AvalonBay Communities, Prime Residential, GH Palmer Associates, Greystar and Jamison Properties, are complying with the law, the news organization hired fair housing testers posing as renters to query apartment listings for dozens of properties.
But the nearly two dozen buildings that brokers said will accept Chapter 8 tenants will not consider pay stubs or other evidence of ability to pay in place of the consumer credit checks required by law. None of the companies agreed to Capital & Main’s interview requests or responded to email questions. However, spokespeople for Equity Residential, Essex Property Trust, Prime Residential and Greystar said in an emailed statement that they comply with California’s Fair Housing Act. A Jamison spokesperson said in a statement that the company’s management company welcomes Section 8 voucher holders. GH Palmer Associates and AvalonBay Communities did not respond to emails or phone calls.
“That’s a problem,” San Joaquin County Housing Authority Director Peter Ragsdale said of Capital & Main’s findings.
His agency in Stockton, California, sponsored SB 267 to make it easier for voucher holders in the state to find housing. If they don’t, the community will pay for it, Ragsdale said.
“Homelessness is not free,” he said. “Like Los Angeles County, we cannot meet the need to solve unsheltered homelessness.”
Fewer than half of Section 8 recipients find housing.
A 2021 U.S. Department of Housing and Urban Development study found that four in 10 Section 8 recipients across the country were unable to find housing after years of waiting for a voucher. In Los Angeles, failure rates have ranged from 30% in 2020 to about 50% in 2022, said Carlos Van Natter, Section 8 director for the Los Angeles Housing Authority.
SB 267 is unpopular with landlords and has drawn criticism from the California Apartment Association (CAA), a powerful industry group.
Spokesman Mike Nemeth said pay stubs, bank records and government benefit statements “do not provide the same insight into an individual’s financial history or reliability in meeting obligations as a credit report. This poses challenges for risk assessment.”
However, CAA informs its members of their obligations under the law in its newsletter and in a fair housing training course for rental staff.
Lawyers who advise landlords are also having to make adjustments.
Dennis Block, a Burbank-based attorney who represents landlords, said in a June 2024 YouTube broadcast that he has long advised clients to use credit checks as a way to screen tenants with Section 8 home deeds.
“All you have to do is run a credit check, and a Section 8 tenant will always end up with a bad credit score,” he said of past guidance. But he lamented that the new law would make this tactic illegal and acknowledged he could no longer recommend it to landlords looking to avoid renting to voucher holders.
Still, Capital & Main’s research shows that credit history remains a barrier to entry for Section 8 participants from the San Fernando Valley to the South Bay. Violations of California’s Fair Housing Credit Reporting Act were common among dozens of building inspectors questioned.
Credit check requirements still remain
Beverly Hills-based GH Palmer Associates showed the strongest compliance with the law. Only one of the seven Palmer Lease Agents insisted that Section 8 applicants must pass a credit check.
Equity Residential, headquartered in Chicago. Essex Property Trust, based in San Mateo, California. Charleston, South Carolina-based Greystar has developed a policy that aligns with California’s 2024 law regarding credit history. However, in responses to Capital & Main’s testers, leasing agents at these companies described various policies that were not compliant with the law and claimed that they would deny Section 8 applicants who did not pass a credit check.
At Equity’s Zia Apartments in Los Angeles’ Chinatown, for example, Capital & Main test staff asked applicants whether they were allowed to show pay stubs to show they had the ability to pay rent.
“There are no pay stubs. In most cases, additional deposits are required or you have to go through a guarantor,” the leasing company said by phone.
Six of the eight equity leasing agencies questioned told testers that you could be denied a rental based on your credit history.
“We are confident that we operate in accordance with applicable Section 8 regulations,” Marty McKenna, first vice president of Equity Residential, said in a statement.
At Essex Property Trust, four of the nine leasing agents Tester contacted said they would reject Section 8 applicants who failed a credit check. But a spokesperson said in an email: “We have reviewed both our written policies and application process to ensure we comply with the law. All Section 8 applicants are approved based on their ability to pay a portion of their rent, not their credit score.”
A Greystar spokesperson said in a statement that all applicants receive a letter “explaining the credit review process and noting that alternative documents may be considered in lieu of a traditional credit check.”
However, leasing staff at six of the eight Greystar properties where testers inquired about credit policies said they would reject applicants who did not pass the credit check.
Avalon Bay Community did not respond to Capital & Main’s request for an interview or written questions.
Four out of six leasing agencies contacted by Tester said they would not consider pay stubs or other proof of ability to pay rent in lieu of a credit report.
“We are committed to complying with all applicable state and federal fair housing laws, including seeking alternative evidence of ability to pay rent and never denying Section 8 voucher holders on the basis of credit,” a spokesperson for San Francisco-based Prime Residential, which owns more than 4,000 Park La Brea Apartments in Los Angeles’ Miracle Mile neighborhood, said in an emailed statement.
However, a representative for Park La Brea said the complex would not accept proof of ability to pay rent in lieu of credit history. Agents at four other Prime facilities told Testers that they cannot determine whether credit history disqualifies Section 8 applicants until credit and background checks are completed.
Los Angeles-based Jamison Properties told Tester that 16 of its 21 properties do not accept Section 8 vouchers, but of the five properties where leasing staff said they accept vouchers, three do not accept credit check alternatives. The two did not respond to Tester’s calls regarding the credit reporting policy.
“The management company that oversees the Jamison portfolio accepts and welcomes tenants with Section 8 vouchers and is taking proactive steps, including partnering with brokers and nonprofit organizations, to assist in identifying individuals and families holding vouchers,” a Jamison spokesperson said in a statement.
The company did not respond to questions about its credit reporting policy, but said in a statement that “all property managers overseeing these buildings have rules and procedures in place to ensure compliance with all applicable laws.”
Chi Chi Wu, director of consumer reporting and data advocacy at the National Consumer Law Center, a nonprofit that advocates for low-income people, said credit history is not a predictor of a tenant’s success.
““Using credit reports and credit scores[to vet Section 8 tenants]is especially illogical because there are programs where literally the government pays a large portion of the rent,” Wu said, “so they have a guaranteed income.” She pointed out that many people have “low credit scores because something bad happened to them.” they lost their jobs. They got sick. ”
unemployment and illness
Callie Rutter said she has always been a responsible tenant. Then she lost the job she loved as an executive assistant. She was late on her bills and her credit was ruined. After losing her apartment, she lived in a shelter in her car. Later, as I was trying to get back on my feet financially, I was diagnosed with cancer and underwent treatment. These circumstances depleted my bank account and made me eligible for Section 8 housing subsidies.
Rutter said her credit score was “terrible” when she started looking for a home. Her house-hunting strategy was to make the best possible impression on potential homeowners and appeal to higher powers. Because the law didn’t protect her at the time.
“Go out on Sunday dressed in your best clothes, grab your documents and pray that you find a place quickly,” she said.
Sasha Morozov, regional director of support services at People Assisting The Homeless, a social services organization in Los Angeles, said her group uses tactics similar to Rutter’s when trying to secure housing for clients using vouchers. She has never seen such acceptance of vouchers since this law was passed.
“It’s like you have to put on your sales hat,” Morozov said, “because the market situation is that the landlord has multiple offers coming in.”
Deborah Slope, deputy director of the National Housing Law Project, said enforcement of the law is key to its effectiveness. But the California Department of Civil Rights has only charged one lawyer and three investigators with enforcing a law that prohibits discrimination against tenants who receive government housing subsidies.
The department investigates and mediates complaints, and sometimes takes legal action against alleged violators, but department director Kevin Kish said sparse staffing places “severe limits on what we can do.”
Enforcement could be further limited because many complaints reach the California Department of Civil Rights through local nonprofit fair housing organizations. Earlier this year, the Trump administration cut funding to dozens of such organizations across the country, causing some to lay off staff and slashing fair housing enforcement.
As for Callie Rutter, she said she used an app to track her on-time rent payments to rebuild her credit. She feels lucky to have found an apartment where she feels safe. She recalled inviting her boyfriend, daughter, and grandchildren over to her home.
Rutter said she burst into tears as they gathered around the pool. “I was thinking about how grateful I was that they knew I was safe and that I had a door that I could lock. I can’t express how grateful I was to be able to take a hot shower.”
This reporting was supported by a grant from the Investigative Journalism Fund.
Annakai Hayakawa Geshlider, Emily Elena Dugdale and Lita Martinez contributed to this story.
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