Why would landlords not want tenants who live on social security?

Per below news story, the Seattle city council passed an ordinance that forbids landlords from discriminating against potential tenants whose income is from monthly social-security payments.

I wasn’t aware of this problem and don’t understand–it seems counter-intuitive.

Wouldn’t a landlord feel secure with a tenant who has a guaranteed lifetime monthly income?

In contrast to a tenant who can lose their job, an S.S. recipient won’t lose their monthly payment.

What’s the dope on this? Could be I’m mis-reading the situation…

“The Seattle City Council approved an ordinance Monday banning discrimination by landlords against renters with alternative sources of income, such as Social Security benefits, veteran’s benefits, unemployment insurance, child-support payments and other assistance programs.”

“No DSS” is commonly seen on adverts for rental property in the UK. (DSS is short for Department of Social Security", which doesn’t actually exist any more, but the shorthand does. It means they won’t accept people who are on housing benefit.)

I always figured it’s because long-term unemployed people are, rightly or wrongly, viewed by landlords as being less likely to take care of the property, and/or more likely to spend their dole money on booze and gambling, etc. Landlords tend to prefer “respectable professional tenants”.

Prejudice. They might think that having tenants on SSI/SSDI will lead to crime, vandalism, etc.

This is a more in-depth list of the reasons why landlords might not want to take tenants who are on benefits:

This is my view as well. My parents owned rental properties for a while in the US. At the time the housing benefit program was called Section 8. Maybe it still is. A lot of landlords had a “No Section 8” line in their ads, presumably because they thought poor people would tear up the property or have undesirable guests or something. My parents actually liked Section 8 tenants because, as they said, “The state always pays on time.”

Digging through all the links and policies and stuff, I found this from a tenant screening application that was mentioned:

Income must be verifiable through employer contact, current pay stub or other means, and must be garnishable.

Can the alternative incomes NOT be garnished for unpaid rent or whatever?

It’s more an issue of their overall financial stability. While SS benefits are stable, they increase slowly and many people have little or no savings to cushion them. A big medical expense, car repair, etc can knock out a month or two of SS income for good. It’s not like a person with a job who expects larger raises, generally expects to move into higher paying jobs over time, and can often make up short-term problems by working overtime or something of that sort. (Which by no means suggests that these options apply to everyone.)

Unemployment seems like the bigger issue to me. Unemployment benefits at the full rate only last you six months, but you’ll generally be signing a year-long lease. As a landlord, you’re betting that the person finds a job before their benefits run out.

Beyond all that… well, Seattle did approve a $15/hr minimum wage recently and ::gasp:: it’s having effects on people who don’t earn wages! Who could have predicted that increases to the minimum wage would have undesirable side effects?

Was Section 8 paid directly to the landlord? In the past, UK housing benefit was paid directly to landlords, which made them more inclined to “put up with” DSS tenants. But nowadays, it is paid to the tenants, which means they can spend it on other stuff. It’s no good if the state pays on time if the tenant then blows the money.

(And the state doesn’t really “pay on time” - UK housing benefit is paid a month in arrears, and on a four-weekly cycle that doesn’t correlate with the calendar monthly rental cycle.)

Small-time landlord here.

Social security benefits cannot be garnished by normal creditors or landlords. My lawyer tells me that only the government can garnish SS benefits. I would consider a Social Security recipient with good references a good tenant if the benefits and other income seemed sufficient to handle the rent. I would try to avoid letting such a tenant get behind on rent at all.

Section 8 tenants, in my few years of experience, are not desirable. The state does in fact pay on time and directly to the landlord. The two section 8 tenants that occupied units when I bought them were both problem tenants from my point of view. They took poor care of my property and caused problems with other tenants. I was glad to see them go.

At the time, housing benefits were paid directly to the landlord, and I believe they were paid in the current month. I think it was federal money distributed by the states, so other states may have handled it differently. And this was 30 years ago, so it’s probably all changed by now.

ETA: thanks, Crotalus.

I’m curious. What are the undesired side effects?

Section 8 (US) provides “vouchers” for use for housing. As noted, they pay directly; it is now done electronically.

It does not pay, usually, as much as the landlord would like. The result was the only people who would take Section 8 were those who would consider “guaranteed payment” reason enough to shave a bit off the rental rate.

Having $95/month GUARANTEED >= $100/month but may have trouble collecting it.

As a practical matter, I know the local office (I don’t even know who that was) no longer even accepts applications for Section 8 benefits - the waiting list is now that backed up.

As to Social Security:

  1. It really cannot be touched except by direct order of God and confirmed by at least 2 Archangels. The IRS can’t even seize it.
  2. I had to put down a Security Deposit 4x normal because I was on SS Disability. And that was with a second or third or fourth tier mega complex (> 1000 units) that was getting really rather shabby. It turned out the owner was trying to sell it (the Great Housing Bubble had burst) and wanted every unit paying rent. I don’t know if they would have taken me if they weren’t desperate for 100% occupancy.
    Not surprisingly, mortgage companies have no problem with SS income - they can foreclose.

Repeating Bayard’s ETA … thanks Crotalus … that matches my experiences exactly.

Just wanted to add that for many years Section 8 participation was voluntary, and they developed a culture of high-handedness … Section 8 inspectors expect to be treated like gods or you’re going to fail. A big problem we have here is a chronic housing shortages. Section 8 requires many things that drive the fair-market value of the unit above what Section 8 will allow. Makes for a self-defeating operation that is quite easily used to basically deny Section 8 tenants without actually saying as much. “If I install heaters in each bedroom, I’ll have to charge 50% more in rent …”

I’ve already calculated the rent increases I’ll impose when our higher minimum wage comes into effect, all of us landlords do … that’s our extra money, not yours.


As to the OP, it is nonsense … for the kinds of places a SS recipient can afford, there’s really no reason to exclude them. Indeed, it makes good business sense to accept this as a stable form of income. The only two sources of income I refuse is child support and lawyer’s fees, the first is profoundly unreliable and the second because I don’t rent to lawyers. It’s too important for me to twist the courts to my position against tenants unaccustomed to the legal process.

It’s called different things in different parts of the country. In NY, it’s known as “Section 8”. In NJ, it’s called “HUD”.

It’s pretty widely accepted that Section 8 tenants are pretty tough on apartments, on average.

In addition, the government agencies have rules on how much you can charge for rent, and you can’t just go with supply and demand. You can’t write into a contract that you’ll increase by X% each year. If you want a raise, you need to apply to the agency, and they do some sort of analysis to decide if you’re worthy of a raise. They might and they might not (and they might also decide that you get a decrease).

My last apartment turnover was at a time when there was a big glut of apartments, and I had a HUD guy who was desperate to take it. So I discussed it with a lot of more experienced landlords, and went over a lot of details with the people at the HUD office and so on. Eventually I told the prospective HUD tenant I would give it another week. If no one else took it within that week he gets it, but otherwise not. And as luck had it, a non-HUD guy showed up in that week so I gave it to the other guy.

I know some small-time landlords who won’t generally rent to people on public support. To my knowledge, they’ve never dissuaded an elderly person on social security but I don’t think they’ve had a lot of applicants like that. They have discouraged in one way or another: single mothers relying on child support (they can’t verify the father’s income stability, creditworthiness, or history of paying child support, they don’t want children because their units have lead paint that they could be forced to abate, and they believe it is harder to evict families with children), welfare (they see them as undesirable tenants who aren’t responsible for their own income and probably won’t take responsibility for the apartment), social security disability (the income is generally just too low to make them viable renters, the income can’t be garnished if they default, and perhaps some sense that they are gaming the system with dubious disabilities so taxpayers will support them meaning that they may not be responsible tenants), and section 8 housing vouchers (a perception that they too are irresponsible leeches coupled with the further concern that the housing authority will cite them for any minor deficiency in the apartment). Please don’t think that I share these opinions.

These aren’t slum lords. They try to maintain the apartments reasonably well but their apartments are over a hundred years old, they do much of the maintenance and repairs themselves and their tenants get lower than comparable market prices than they would on fully-refurbished units. These landlords think that their tenants should expect occasional things like a broken cabinet door might not get fixed for a couple of weeks or that double-pane windows will have some condensation between the panes in the winter. They don’t want to have to maintain the apartments flawlessly to the standards of the housing authorities and the are afraid of tenants who might know how to work some public assistance angles to the landlords’ disadvantage. The landlords don’t have trouble renting the units because of the lower than market prices and because the apartments really do look pretty good. Their tenants tend to hang around for two to three years and the landlords and tenants both seem happy with this arrangement.

This is what the Seattle law would make illegal … using HUD as a criteria for acceptance. With the “first-come-first-served” provision, you’d have needed some other reason to deny the first applicant in order to accept the second one.

I’ve always used first-come-first-served, coupled with a written screening system that fully implements all protected classes I have a positive defense against discrimination complaints.

I believe it’s already illegal in NJ, which is where my apartment is. But as a practical matter, this did not apply to my situation.

One of the other issues with HUD/Section 8 vouchers is that you (the tenant) have to be approved for a certain size apartment, which is based on family size and the gender makeup of your family. If you’re approved for an X bedroom apartment, you can rent a larger apartment, but HUD will only pay their going rates for an X bedroom apartment, which would typically be lower than the price of a larger apartment. And it’s illegal for the landlord to ask the tenant to make up the difference.

In my case, the tenant was only approved for a smaller apartment than the one I was offering. So he technically couldn’t afford the asking price for the apartment. There were convoluted ways to get around this issue - which is one of the things I had to discuss with the more experienced landlords and people from the HUD office - but I didn’t have to do them. If all I did was just stick to my guns and insist that I was only accepting the typical going rate for an apartment that size with no special arrangements, then that particular HUD applicant couldn’t rent it, and the HUD office would back me up on that.

The rules for the Section 8 program may vary from state to state. My Section 8 tenants were allowed to pay rent over the voucher amount directly to me. If I wanted to raise the rent, the housing authority would evaluate my request and either agree to pay me the additional rent or allow the tenant to pay the difference, if they wanted to and could.

In NJ, the way it works is that the tenant pays X% of their income (IIRC it’s 30%) for rent. HUD/Section 8 pays the difference between what the tenant pays and the allowable rent.

[One upshot is that people who have these vouchers - unlike people who don’t - are completely price-insensitive when it comes to rent. They pay the same fixed amount regardless of what the rent is (I once spoke to a HUD renter of a house I was thinking of buying who told me he didn’t even know what the rent was on his apartment) so they go for the best apartment that they’re eligible for, regardless of cost. This can skew the market and impact the “richer” people who are paying their own way, who need to be more cost conscious.]

Another consideration is that social security recipients’ income is fixed. It’s not going to increase. In certain markets rental rates will rise regularly. A tenant on a fixed income is going to have a hard time the next year when their rent is raised.