In what may be one of the strangest twists to the housing market crisis, Section 8 housing tenants are moving from urban housing projects and into high-end condo complexes and single-family McMansions that just a few years ago sold for hundreds of thousands of dollars.

The reason? Landlords are grateful to have a steady rent check and a tenant whose rent doesn't fall whim to a job loss.

In a ritzy Palm Beach Gardens neighborhood in Florida, one landlord jumped at the chance to rent a $1,200-a-month apartment to an underemployed single mother of two teenage kids. And in Las Vegas, low-income seniors are living in upscale complexes with on-site beauty salons, health clubs and swimming pools and pay just a fraction of the fair market rents.

Section 8 is a federal Department of Housing and Urban Development program that allows seniors, the disabled and low-income tenants who qualify to live anywhere and pay no more than 30% of their monthly income for rent; HUD makes up the balance in fair market rent and pays the landlord directly. The program serves the dual purpose of helping fill unoccupied rentals in the broader community and also provides those who live at the poverty level with an alternative to an urban housing project.

In better economic times, low-income Section 8 tenants were generally treated by landlords as the tenants of last resort. In those days of the housing gold rush, landlords would want to rent to the most financially fit tenant they could find, and that didn't likely include Section 8-ers, who frequently wound up relegated to housing in the least desirable parts of town.

But today, with the economy still down and unemployment levels still high, subsidized housing tenants suddenly have a glow about them and are being courted by landlords ready to roll out the red carpet to tenants who possess one of those almighty housing vouchers.

What accounts for the attitude adjustment? The back-story is simple: All across the country, but especially in housing markets hit hardest by foreclosures like Florida and Nevada, home owners and banks have become reluctant landlords. Unable to sell their properties, they turn them into rental units. And they quickly learn that Section 8 voucher holders are the closest thing to a guaranteed rent check out there.

The affection for Section 8-ers is so strong that websites like GoSection8.com have sprouted, a kind of Match.com hooking up landlords and tenants. Landlords post photos of their properties and tout their high-end features, and tenants approved for Section 8 vouchers can search by city and state -- or number of bedrooms and amenities -- to find a home to their liking. Tenants also can list themselves on the site, basically inviting landlords to come hither.

The economy was certainly why Florida landlord Damien Barr, founder of KangaRent, turned to Section 8 tenants to fill his own investment property units. KangaRent is a Palm Beach County rental service run by Realtors. Barr bought three income units for himself in the past year in Palm Beach Gardens, Florida, paying $95,000 for one and $127,000 and $130,000 for the other two. Just a few years ago, these units fetched about $400,000, said Barr.

He collects $1,200 a month rent on two of them and $1,450 a month on the larger unit which has a garage --not a small amenity in Florida's hot summer heat. And with Florida's job scene so dicey and the state's unemployment rate at a whopping 12%, Barr jumped at the chance to lease to Stephaney Baker, a Section 8 tenant who is a single mom with two children who works as a home health aide.

"I picked her over two non-Section 8 applicants," he said. Why? Aside from being very personable and pleasant, Baker's rent check will come like clockwork from HUD. She could lose her job and still the rent will be paid. That security is nothing to sneeze at in this economy, Barr said. He also sees Section 8 tenants as having a dog in the race when it comes to maintaining the unit. Under Section 8 rules, tenants lose their vouchers if they don't keep things in order.

It would be highly unlikely for tenant Baker or her 15- and 5-year-old children to trash the unit she rents with her voucher. "I love living here," she says of her three-bedroom unit. Baker says she enjoys the complex's resort-style swimming pool, sauna, spa, steam room and racquetball court. She describes the clubhouse as "just beautiful," and notes that it has separate areas where you can watch TV, play pool or rent out a room for parties like baby showers.

She lived in two other Section 8 apartments before this and while neither was a slum, the new complex vastly surpasses them. And she acknowledges that the housing market's collapse has worked to her benefit.

James K. "Mack" McClelland, CEO and founder of Mack Companies, has long chased the Section 8 dollar. Mack says the recession has brought a lot inexperienced landlords into the rental market -- and they quickly learn how little they know about the business of renting homes. Screening tenants, checking on properties, managing units -- it's not a game for novices, he says.

Section 8 provides security, hence its popularity. Mack Companies owns and manages 450 single-family homes on the South-side of Chicago, half of which are rented to Section 8 voucher holders. Mack Companies focuses on properties within a 30 minute drive of its headquarters so staff can service the units and jump on any problem immediately. He carefully screens all his tenants -- not just those with Section 8 vouchers. Mack is a flipper, who buys and renovates properties with the intention of leasing them out. He regularly buys distressed properties.

Gina Yenser, the marketing director of Covenant Management in Las Vegas, sits at Ground Zero of the housing market collapse. Her company manages 3,800 units in 60 apartment buildings and says the devil of her business is a low-occupancy rate. To fill vacant apartments, the company "takes a lot more Section 8 tenants because of the recession," she said. "Section 8 has brought our occupancy rates to acceptable levels," Yenser said.



Section 8 vouchers are also given to senior citizens, and Covenant has several complexes that are 55+ active senior communities. One of them has a hair salon on site, a putting green, pool, shuffleboard courts and a clubhouse outfitted with a state-of-the-art gym. The complex is guard-gated in a nice part of town, said Yenser.

Sally Poindexter, 81, lives in a Section 8 unit in the Country Club at Valley View, a Covenant-managed complex for seniors. She couldn't be happier with her one-bedroom unit in the upscale complex that has a pool, clubhouse and, as she is quick to point out, is within walking distance to her doctors, the hospital, the grocery store and post office.

Poindexter retired from her job with a Los Angeles casting company. After living overseas for awhile, she settled in Las Vegas. Her seven kids are grown and she has lost count of the number of grandchildren, great-grandchildren and great-great grandchildren she has. Although she declined to say what she pays in rent, the complex rents begin at $575 a month and currently there is a $99 move-in special, according to its website. Seniors are treated to a free lunch in the clubhouse every Wednesday and there is a complex shuttle bus available for trips to medical buildings and shopping centers.

The idea of renting to low-income tenants, while popular with landlords, isn't always embraced by other homeowners in the neighborhood. One woman who owns a home in Henderson Nevada and who insisted on anonymity, called it the "second shoe dropping on our heads."

"First," she said, "we were hit by the wave of foreclosures." Having Section 8 tenants in the neighborhood diminishes property values "for those of us hanging on."

The need for subsidized housing isn't likely to diminish any time soon. HUD reported a 20% jump in "worst-case needs" from 2007 to 2009. About 7.1 million households paid more than half their income for rent or live in substandard housing, the agency says. The Section 8 program, administered through local housing agencies, frequently has a waiting list. There are currently 2 million families with vouchers and some housing agencies have frozen new applications. Housing agencies have a great deal of flexibility in deciding who gets a voucher. In some communities, priority is given to the homeless or to senior citizens.

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