|Palm Beach County's surplus of empty homes creates unexpected market
Article Courtesy of The Palm Beach Post
By Kimberly Miller
Published October 3, 2011
WELLINGTON — The lakefront home on Crown Point in Wellington once was leased to the polo set as a seasonal rental for the well-heeled followers of the sport of kings.
With fewer pony-loving transients arriving during the economic slump, the nearly 3,000-square-foot home is now being marketed to tenants whose heels are more humble - those with Section 8 housing vouchers from the government.
The housing bust has been a boon for low-income families who receive the federal rental subsidy as a glut of homes - sometimes with pools, sometimes in gated communities - weighs heavily on the market.
Now, Section 8 options include homes with five bedrooms, new appliances and two-car garages.
About 6,600 families in West Palm Beach, Delray Beach and their surrounding unincorporated areas receive Section 8 vouchers. The monthly rent subsidy for local homes is as high as $2,109 for a five-bedroom, three-bathroom home in a suburban Lake Worth gated community. But stipends for less than $100 are also doled out. The average voucher amount from the West Palm Beach Housing Authority is about $900. Delray Beach Housing Authority stipends average about $860.
The amount awarded is based on a family's size and the median family income for the area. In Palm Beach County, a family of four cannot exceed an annual income of $36,700 to receive a voucher. For a family of six, the income limit is $42,600.
A family receiving a voucher is expected to pay 30 percent of its monthly adjusted income for rent and utilities.
With more variety to choose from, landlords say, Section 8 tenants can be more selective.
"They're looking for new kitchens, granite countertops, stainless steel," said Andy Pollack, who manages rental properties including several that he rents to families with Section 8 vouchers.
Much of Pollack's inventory comes from foreclosure auctions at which townhomes built during the boom are bought for bargain-basement prices. He said competition for Section 8 tenants has increased as aging homes go up against new properties.
"Anyone with run-down units is going to see their occupancy rate plummet because you can get better product today at the same prices," Pollack said.
Pollack advertises his homes on the Boca Raton-based website GoSection8.com.
The website, which lists homes nationwide, was founded seven years ago and receives millions of hits every day, company President Richard Cupelli said.
"The quality of listings is probably the best it's ever been," Cupelli said. "Landlords are finally becoming aware of Section 8 and the benefits."
In addition to the guaranteed rent, there's typically less turnover. Also, tenants who trash a home risk losing their voucher. Pollack said that gives the landlord more control than with a traditional renter who can just skip out on back rent or damages.
Laura Pearlman, a West Palm Beach Realtor who specializes in rentals, said there is still a stigma attached to Section 8 - that it lowers housing values and increases crime in a neighborhood. But she said it all depends on the tenant.
"You can get bad renters whether you're dealing with Section 8 or renting to a guy making $100,000 a year," she said.
Unable to sell his home for what he still owes on the mortgage, Michael Quintavalle said he hopes to rent his three-bedroom, two-bathroom house in The Acreage.
The home, a model property for the builder, sits on more than 2 acres, has a koi pond and two screened-in porches and is available to Section 8 tenants.
"So many people are having a hard time and losing their homes," Quintavalle said, explaining why he's open to Section 8. "Plus, it's a sure thing. You know you're going to get your rent money.