T
he HOW Group's Wister Court Apartments, initially built for La Salle University students, now serves low-income tenants with Housing Choice Vouchers after the COVID-19 pandemic reduced student enrollment. The real estate company partnered with the Philadelphia Housing Authority (PHA) to market units to voucher holders, who receive 70% or more of their rent covered by the program. Vice President Kelli Tomzac noted that the large unit sizes made it an attractive opportunity for PHA.
The pandemic-era building boom has created a competitive market among newly built apartment owners, leading to spiking vacancy rates and slowing rent growth. As a result, developers and landlords are increasingly interested in guaranteed rental income from the federal government through the voucher program.
PHA has been ramping up its campaign to get more voucher holders into higher-income areas of the city by basing voucher values on zip code since 2018. This change allows them to meet market-rate rents in pricier areas. Since 2021, PHA has aggressively courted developers and property owners who had never used the program, resulting in over 2,000 new landlords participating and 4,000 additional units becoming available for voucher households.
PHA President Kelvin Jeremiah attributed the shift to the abundant supply of units and the fact that PHA is now paying market-rate rent. The Section 8 voucher program was created as a market-oriented alternative to public housing but has faced funding issues and problems with segregation.
Developers are now more interested in vouchers due to changes made by PHA, including setting different rents for vouchers depending on area, which allows voucher holders to afford units in higher-income neighborhoods. This change has helped address the issue of landlords refusing to accept voucher holders or being constrained by low rent levels.
The apartment boom has also driven competition among developers and landlords, making it harder for them to fill their buildings with market-rate tenants. As a result, some property owners are now actively marketing to voucher holders, including the HOW Group in Fishtown.
PHA's outreach campaign to landlords and developers has also played a role in increasing participation in the program. The authority has addressed common stigmas by offering insurance against tenant-caused damage and streamlining the inspection process.
Renter advocates say voucher holders still face discrimination from landlords, but PHA's efforts have made a difference. With over 1,000 new construction units expected to participate in the coming months, developers are trying to change the perception of the program and make it more appealing to landlords.
