Investors buy up Section 8 housing

Reynaldo Acosta uses a tablet to work his computer, searching online for a new place to live, as home care nurse Carrol Sous fills out health forms Monday. Acosta has received notice that he must move out of his apartment at Charleston Arms in West Ashley because the new owners won’t accept his subsidized housing voucher.

Low-income tenants will have fewer options in the Charleston area’s pricey rental market after a California investment group purchased two West Ashley apartment complexes and told subsidized-housing tenants to move out.

“This is the third apartment complex this year,” said Don Cameron, executive director of the Charleston Housing Authority, referring to the Charleston Arms complex on Sam Rittenberg Boulevard. “Ownership changes, and the new owners decide they can get more rent without the vouchers.”

Federally funded vouchers commonly known as Section 8 pay most of the rent — sometimes all of it — for people such as Reynaldo Acosta, a 51-year-old disabled man. Acosta has lived at Charleston Arms for six years, and at the end of July he was given notice to move out by Aug. 31.

“I’m disabled, so I can’t just pack up and leave,”said Acosta, who lives alone with his service dogs, uses a motorized wheelchair and bathes with the help of a visiting nurse.

The notice to move came after Beverly Hills-based Lattitude Management Real Estate Investors bought the 1960s-era Charleston Arms and Georgetown Apartments for $18.7 million. The company did not respond to repeated requests for comment.

The purchase is an example of how hot the rental market has become, driven by rising demand for apartments that followed the real estate meltdown and a nationwide decline in home ownership. The average U.S. renter now pays a record-high 30 percent of their monthly income in rent, according to real estate website Zillow.

Section 8 renters are required to pay 30 percent of their income in rent, but typically have little income, and vouchers pay the difference. There are caps on the rent Section 8 will pay. For example, the maximum rent including all utilities for a one-bedroom apartment in the Charleston area is $696.

The program is meant to help those with very low incomes to live in privately owned rental properties they choose, rather than in housing projects. But with limited numbers of participating landlords, Cameron said roughly four in 10 Charleston Housing Authority voucher participants live outside the Charleston city limits.

“We’ve got a number of landlords along the Highway 61 corridor that won’t take them,” said Cameron.

For owners of large apartment complexes, one issue is that under federal rules, a complex can accept vouchers, or not, but can’t limit the number of voucher clients. Cameron said that can be a problem because some owners might be happy to accept some participants but may not want an unlimited number of low-income tenants.

Acosta said Charleston Arms has been a good place to live, but both Charleston Arms and Georgetown Apartments, less than a mile away on Orange Grove Road, have seen some trouble.

At Charleston Arms, two men were stabbed during a fight in the courtyard earlier this year — one was later charged with attempted murder — and last year two people were arrested after warrant-bearing police searched an apartment and found bundles of heroin allegedly packed for distribution.

At Georgetown Apartments on Orange Grove Road, police captured an escaped inmate in 2013, and in 2011 a man was shot and killed in a breezeway at the complex. There was also a stabbing there in 2012, and shootings in 2009 and 2008.

Acosta would prefer to stay at Charleston Arms and said finding a new home has been challenging. He said apartments he’s looked up online usually have waiting lists if they are in safer neighborhoods and close to public transportation.

“Out of 30 complexes I’ve called not one has a one-bedroom available,” he said.

And 30 complexes may be an exaggeration. One online tool for finding Section 8 apartments,, shows only 24 locations in the tri-county Charleston metro area, and all but nine have waiting lists. From among the available listings, Section 8 clients must then find apartments the correct size because the program dictates how many bedrooms are allowed by family size.

As hard as the search has proved for Acosta, he’s fortunate to have a voucher.

Limited funding means there aren’t enough vouchers to go around. About 6,000 people are on waiting lists at the five housing authorities that serve the Charleston area, and untold thousands have been unable to get even that far. The housing authorities routinely close the waiting lists when they get too large, as they are in Charleston and North Charleston.

Once on a waiting list, it can take years to get a voucher, and then the recipient needs to find a place where they can use it. About a third of the people approved for vouchers at the Charleston Housing Authority end up not using their hard-won vouchers.

In West Ashley, Acosta asked the managers of his apartment complex for more time to find a new home, then filed a complaint with the South Carolina Human Affairs Commission. On Tuesday, the day after The Post and Courier first called the Charleston Arms management company, Trademark Residential, to ask questions, Acosta found a letter on his door giving him until the end of September to relocate.

“I wanted a three-month extension, and they gave me a month,” he said.

Trademark Residential Regional Manager Jessica Linko referred questions to the property owners, who did not respond.

When a large apartment complex such as the 140-unit Charleston Arms drops out of the voucher program, the impact is widespread.

“When it hits, it’s 10, or 12, or 14 families and all of a sudden we have a lot of people looking for a place to live,” Cameron said.

The North Charleston Housing Authority also had voucher participants at Charleston Arms. Executive Director Gary Scott said they have been able to find housing, and in North Charleston there are more options for voucher participants.

“In North Charleston we have had so many tax credit properties built in recent years that we don’t have a problem,” he said, referring to housing that must be priced affordably for at least 10 years in return for tax credits that help finance development.

If there are enough apartments in North Charleston to serve Section 8 participants, that’s partially because real estate is less expensive there, but also because there aren’t enough vouchers to go around.

“We (recently) opened our waiting list to about 1,000 applicants,” said Scott. “That just puts them on the list to apply when vouchers are available.”

Reach David Slade at 937-5552.

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