Section 8 is a federal rental assistance program where qualifying low-income tenants receive vouchers paying a portion of rent directly to the landlord. California prohibits landlords from discriminating against voucher holders.
Participating landlords receive rent from a combination of tenant contribution (typically 30% of tenant income) and voucher subsidy (administered by local Housing Authorities, HACLA for LA City). Units must pass HACLA inspection to qualify; landlords agree to participate in the program through a contract.
Section 8 participation is discretionary for most LA multifamily landlords but California source-of-income discrimination laws prohibit refusing applicants solely because they hold vouchers. For sellers, Section 8 tenants are stable (long tenure, reliable payment from HACLA) but have specific regulatory and documentation requirements.
From the Sterman LA Multifamily Glossary — defined the way a broker with $1.41 billion across 254 closed transactions actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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