High-priced housing market is squeezing low-income renters

Michelle Rand’s anxiety has consumed her since she and more than two dozen other low-income families at The Woodwinds received notices from their new landlord that they would have to leave their homes by the end of the year.

Annie Brown and her neighbor Michelle Rand, left, look over Brown’s eviction notice Tuesday in Brown’s three-bedroom apartment in Portland, where she lives with her two daughters. The eviction notice was late rescinded, but Brown expects she’ll have to move anyway because the rent will rise. Gregory Rec/Staff Photographer

While the notices were rescinded more than two weeks later, Rand and her neighbors expect to be forced to move anyway because of impending rent hikes.

Rand, who struggles with anxiety and bipolar disorder, knows what that means. She and her 22-year-old daughter moved into their current apartment at The Woodwinds after being priced out of their previous apartment in Parkside, also after it was sold and renovated by a new owner.

Rand needed the full 60-day notice provided by her previous landlord, plus another two and a half months spent couch-surfing in friends’ homes, to find another apartment in Portland that would accept a Section 8 voucher for payment.

“It was stressful and emotional, especially when you have a kid and you can’t provide for them or assure them what the future is going to be,” Rand said, as she began to cry. “A lot of times, we weren’t able to stay at the same place, so we had to stay separated. I worry about going though all of that (again).”

About half of the 61 units at The Woodwinds are rented to low-income tenants who, like Rand, rely on the federal subsidies that likely won’t be enough to cover higher rents.

The Woodwinds’ new owner, 240 Harvard Street, LLC, and its property manager, Chestnut Realty Management, LLC, said this week that the eviction notices were sent in error and families will not be forced to leave at the end of the year.

But tenants like Rand and 53-year-old Patty Galope, who lives with her daughter and three grandchildren, are not getting too comfortable. The landlord also gave notice that ongoing renovations will lead to rent increases.

“We’re not stupid,” said Galope, who has lived at Woodwinds for eight years. “It’s kind of saying the same thing in a different way.”

The upheaval highlights the difficulty people with Section 8 vouchers face when trying to find – and keep – housing in Greater Portland, which is undergoing a development boom of luxury condominiums and hotels. The same pressures face other low-income tenants, including thousands who are on waiting lists to get Section 8 vouchers or to secure units in public housing complexes.

High demand for a limited housing stock has pushed up rents to a point where landlords aren’t willing to accept Section 8 tenants because there is more money to be made by getting a higher price from more affluent tenants. Tenants with the vouchers pay 30 to 40 percent of their income toward rent, while state or local housing authorities provide the federally-funded vouchers to cover the rest, though assistance is capped.

Qualifying tenants can either use a voucher to rent from a private landlord, or live in a unit that is owned and managed by a public housing authority.

It is illegal to discriminate against low-income tenants. However, the Maine Supreme Judicial Court ruled in 2014 that landlord participation in the Section 8 program must be voluntary because it comes with additional requirements regarding leases, building codes and inspections.

“It can create problems, but I’ve never found it to be insurmountable,” said Carleton Winslow, a longtime Portland landlord who has divested many of the units he once owned or managed. “I never felt it was right to discriminate against Section 8 tenants. I have had good Section 8 tenants and some bad Section 8 tenants, just like the regular market.”

While having a Section 8 voucher doesn’t guarantee housing is available, it can take years to even qualify for one.

There are 19,700 people waiting for one of Maine’s 12,000 Section 8 vouchers to become available, either because someone gives one up or loses one, sometimes because they haven’t found housing that accepts it. Wait times range from three to five years, according to the Maine State Housing Authority. The list has grown by 4,700 people in the last four years, while the average wait time has doubled since 2010.

Nearly 300 affordable housing units are expected to come into the market in the next year or so in response to the demand. But some housing officials expect the situation to get worse for low-income tenants before it gets better. That’s because the U.S. Housing and Urban Development Department has announced it will decrease the maximum Section 8 rent allowance for the coming year, giving voucher holders fewer options.

Mark Adelson, the outgoing director of the Portland Housing Authority, which has issued 16 Section 8 vouchers to tenants at The Woodwinds, said the planned $81-a-month reduction is based on outdated rental market information from the U.S. Census Bureau. Portland’s housing agency, along with agencies in South Portland and Westbrook, are in the process of appealing the reduction, just like they did successfully in 2017.

Many tenants at The Woodwinds on Harvard Street in Portland are worried that their Section 8 housing vouchers won’t cover the rent increases the complex’s new owners plan to impose to cover renovations. Gregory Rec/Staff Photographer

Adelson said about 1,000 people are waiting for units to become available in housing owned and managed by the housing authority in Portland, while an estimated 2,800 people in Portland are waiting for a Section 8 housing voucher to pay rent to a private landlord.

“It’s definitely squeezing (the market),” Adelson said. “There’s more need and there’s more competition for all of those units.”

Maximum rents set by HUD for Section 8 participants are $989 for a studio, $1,339 for a two-bedroom unit, $1,538 for a three-bedroom and $1,696 for a four-bedroom, according to MaineHousing.

Adelson said that the existing voucher amounts appear to be enough to cover the average rents based on the city’s 2018 landlord survey, which said the average rent for a two-bedroom apartment was $1,360 and $1,565 for a three-bedroom.

However, those average rents are based in part on what long-term tenants are paying and do not reflect the higher prices that are charged when new units come onto the market, especially if they have been newly renovated. When Section 8 voucher holders search for apartments on the open market, they have few choices, according to public housing directors.

“I would say it’s out of whack,” said Leanna Bruce, South Portland Housing Authority’s housing program director. “We have a lot of landlords not able to rent to us because those (Section 8) maximums are too low.”

Bruce said some landlords are willing to forgo higher market-based rents and negotiate reduced rents to help low-income tenants with housing vouchers. But that’s not always the case.

“They have a lot of (non-subsidized) applicants where they don’t have to go through those extra steps for Section 8,” Bruce said. “It’s much easier to grab someone off the street who they know can afford it.”

The hundreds of new affordable housing units currently planned or under construction in greater Portland are seen as helping down the road, but won’t expand the inventory enough to resolve the shortage in the next few years, said Chris LaRoche, the director of the Westbrook Housing Authority.

That’s what concerns tenants like 37-year-old Larisa McGill, who has lived at The Woodwinds with her two children for the last seven years. McGill said she suffers from post-traumatic stress disorder and the upheaval has worsened her condition and affected her children, one of whom is autistic.

“It’s a lot,” McGill said.

She had been looking for a new apartment for months, long before receiving the eviction notice, and has yet to find a place. She considered moving to a two-bedroom unit in Westbrook – until they were told the building was going to be sold in a few months. “I don’t want to go through that again,” she said.

Now, she fears that her search will be even more difficult given that so many of her neighbors also are looking for new homes.

“It was hard enough when it was just one person looking, but now we have 16 families all scrambling to look for the same apartments,” she said. “I have a feeling we won’t find anything in Portland, so moving out of Portland may be our only option.”

Meanwhile, Rand, who works as a part-time bookkeeper at a supermarket, has found three apartments within her budget, although none was in Portland. She looked at an apartment in Gray, but the landlord had other people interested and had never taken a housing voucher.

Rand said she has no choice but to continue her search, even though she no longer faces outright eviction.

“It’s a very emotional and a hard time,” she said. “We’ve all been thrown into turmoil.”

This article was updated Nov. 12 to correct the number of Section 8 vouchers issued statewide.