Kalamazoo pilot program could see more landlords renting to those with housing assistance

This story is part of Southwest Michigan Second Wave's series on solutions to affordable housing and housing the unhoused. It is made possible by a coalition of funders including Kalamazoo County, the ENNA Foundation, and the Kalamazoo County Land Bank.

The City of Kalamazoo is about to pilot a way to break down one barrier between those holding housing vouchers – funds to help low-income individuals pay their rent – and the homes they desperately need.

Before they can accept tenants with vouchers, landlords must bring their units up to standards set by the state of Michigan and the federal government. Refusing these tenants is a way some landlords avoid the inspections required.

To break through this impasse, the City has partnered with LISC (Local Initiatives Support Corporation) Kalamazoo to get landlords the funds to fix up their properties. 

The City of Kalamazoo/LISC Rental Rehab Program will provide participating landlords up to $25,000 per unit. ARPA dollars fund the program, $1.5 million worth. LISC Kalamazoo will oversee and run the program.

A voucher's long road, and a common roadblock at the end

"The Housing Choice Voucher Program Section 8," is a form of assistance for very low-income people, the elderly, and people with disabilities to help them find housing. Once issued a housing voucher, a renter will then have to find a landlord participating in the program. That landlord will then get paid rent through the local PHA, the public housing agency, which is Pinegrove Housing Services locally.

Sharilyn Parsons, Housing Development Project Coordinator for the City of KalamazooSecond Wave has spoken with people who are homeless and volunteers trying to get them in the voucher program, and we've heard some intense frustration.

Meg Forrest, a volunteer for Kalamazoo's homeless, has had some success getting people vouchers and their own apartments. In an October 2022 email, she explained the difficulties. 

First, a pre-application must be submitted. "Then people wait for, I think, an average of 90 days, but sometimes up to six months for them to get pulled," Forrest writes.

Since 2022, Forest says in an update at the end of 2023, she’s found that the wait can be much longer. Names can stay on a waiting list for up to 18 months. "And then if not pulled, they will have to re-apply," she says. She knows of unhoused individuals who’ve been waiting for over a year for assistance.

Once pre-approved to receive assistance the applicant gets another application to fill out. If that's approved, they're called into the Kalamazoo County PHA, Pinegrove Housing Services, for a briefing on the process and rules of renting with vouchers.

"Once the voucher is issued, you have to find an apartment that takes the voucher. I wish Michigan was a state that required all landlords to accept the voucher, but it is not," Forrest writes. 

To get an idea of the complexity of a voucher's path, we spoke with Lisa Kemmis, MSHDA Director of Rental Assistance and Homeless Solutions, back in October 2022. She explains that the often lengthy journey starts at the federal level, at HUD, reaches MSHDA, then Kalamazoo County through Pinegrove Housing Services, and HRI (Housing Resources Inc.). 

The wait for a voucher can be long, but once someone is pulled from the waiting list to get a voucher, getting one "generally... happens rather quickly," Kemmis says. At this point, the major "backlog or delay (comes from) the challenge of finding available and affordable housing units to rent." 

There is a lack of affordable housing state-wide, and it's also a state-wide problem that some landlords refuse tenants with vouchers, Kemmis tells us in 2022. "How do we entice more landlords to participate in the program, to make their units available for our families? Offering incentive programs, a sign-on bonus, claims mitigation, increase our maximum rent that we can allow," are some methods she says. "It comes with challenges, still, even when we provide those program flexibilities." 

The situation is roughly the same in late 2023. Sharilyn Parsons, Housing Development Project Coordinator for the City of Kalamazoo, says that ultimately a voucher is still "income" for a landlord -- so what's the barrier?

"The only barrier that we heard, that seemed legitimate, was that the unit standard has to be such that the state accepts the unit, and connects with a voucher," Parsons says.

Since state and federal funds go into vouchers, state and some federal standards must be met before a landlord can accept vouchers. 

Are these standards strict, or are they simply to keep the property from being slum-like?

"More of the second," Parsons answers. "Those standards tend to be around health and safety issues." 

First, units must pass city code, and be certified rentals, she clarifies. "Then the state also will want to see, possibly, furnace or window (improvements), see that there's no peeling paint which could pose some health problems if there are children in the unit. Potentially updated appliances so that every single burner's working on the stove," Parsons says. 

The standards aren't demanding palaces, "they're what you would want the units to be, anyway. But it is a cost to keep them that way because there are inspections that need to be done whenever there's federal money or state money going into a unit."

Carrot or stick?

"This is definitely a carrot. This is an incentive," Parsons says. "The way we look at it is, this is improving  (landlords') assets, improving their real estate."

Also, "It wouldn't affect their bottom line too greatly, is what we're really hoping for because they're going to have the assurance of the voucher."

A big intention behind the program is to create more livable housing and adjust the supply-and-demand balance that's driving up rents. "With the market like it is, you can charge as much as you can reach, and when there's a supply problem, rents tend to go up. We want them to stabilize," Parsons says.

Ultimately, for property owners, this program will fix up their assets, plus get them assured income from vouchers. "They don't have to keep it affordable forever, but there's a term that they have to keep it affordable." That means keeping rent at no more than 30% of a family's income.

There will be a stick ready if landlords break their promise. "If there's a breach of agreement or a sale or transfer of the property, then the dollars need to be repaid." 

A 2024 launch

The Rental Rehab Program is a pilot that's never been tried locally before, Parsons says. The program was approved by the City Commission earlier this year and has so far resulted in a list of interested landlords, with five selected to participate.

Zac Bauer, Executive Director of LISC Kalamazoo, wrote in an email that the launch of the program will be in early 2024. 

"Since the City Commission made the award to LISC, we have, along with our City partners, laid the foundation for a successful launch in early 2024," Bauer writes. "Our initial five recipients have already been identified; they have agreed to serve as the project’s test subjects. A wider request for applications can be expected in early February 2024." 

He writes, "LISC is pleased to partner with the City of Kalamazoo on increasing the availability and quality of rental housing within the City of Kalamazoo. We see the Rental Rehab program as a key and developing solution for residents and landlords."

Bauer writes that the program could grow. "With this initial, generous allocation of resources, we hope to support up to 48 rental units in the City of Kalamazoo. We plan to expand the program as we seek additional funding."

Landlords who would like to participate in the City of Kalamazoo/LISC Rental Rehab Program should contact LISC Kalamazoo,  269-459-4120.
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Read more articles by Mark Wedel.

Mark Wedel has been a freelance journalist in southwest Michigan since 1992, covering a bewildering variety of subjects. He also writes on his epic bike rides across the country. He's written a book on one ride, "Mule Skinner Blues." For more information, see www.markswedel.com.