The recent Guam Housing and Urban Renewal Authority study on the island’s housing market highlighted what every resident here already knows — that new housing prices and rental rates are very high.
But the study also provides insights on how the housing market on Guam may be particularly stacked against low-income earners.
For instance, the study pointed out that landlords willing to rent to Section 8 clients are limited as most landlords would rather rent their properties to members of the military or tourists renting for the short-term.
Section 8 allows individuals and families who cannot afford rent to have their rent and living expenses subsidized. But even with the assurance of subsidized rental payments, many landlords are hesitant to rent to Section 8 clients.
According to the study, since there are no policies restricting income discrimination in Guam, landlords can lawfully decline to accept Section 8 vouchers.
In addition, Section 8 and other rental assistance clients can’t search for rental units on their own and must work directly with GHURA for a list of landlords that accept vouchers, then wait for openings at those facilities.
“Searching on their own for units often results in months of turn downs because landlords would rather not deal with the complications of renting through the program, especially with the alternative of renting to military households at higher prices,” the study stated.
In fact, stakeholders have suggested that one reason for the large number of vacant housing units is that property owners are waiting to renovate their units until more military renters enter the market.
As a result, apartment building upgrades have also been delayed by a number of landlords waiting for the long-anticipated Guam military buildup to begin in earnest.
The poor disabled
The study quotes many of those familiar with the Section 8 program as saying that the fair market rent value being used to assess the amount allotted through rental vouchers is far too low for what is required to rent a unit on Guam.
This limits the use of the program to a very small number of rental units that are more likely to be older and less likely to be able to accommodate individuals with special needs.
According to the study, these units are generally not ADA-compliant and there are not enough available units that can accommodate the disabled such as accessibility for wheelchairs. In addition, older units within the approved funding limitations of the Section 8 program are much more likely to be in disrepair.
“Section 8 has very strict housing and inspection standards for all units to be undertaken annually. Units that are upgraded will look for renters willing to pay more for their unit. Guam has encountered significant challenges in finding units, affordable units, that can pass these strict housing standards established by HUD,” the study noted.
According to the study, the disabled population has a high rate of unemployment and poverty (39%) and of those who are disabled but not in the labor force, 64 percent are living below the poverty level.
Moreover, households with at least one disabled member is a growing subsection of the population.
Based on a housing demand survey, the proportion of households affected by disability grew by about 4 percentage points in the last 10 years.
“The lack of housing for individuals and families in need of wheelchair accessible housing is particularly difficult. Structural requirements, wider doorways, lower toilets, roll-in showers, railings, ramps, etc., are not easy upgrades to any unit and can be even more difficult in the concrete structures needed to withstand Guam storms and earthquakes,” the study emphasized.
Housing reserved for tourists
And then there are those landlords who only accept tourists for their properties to the detriment of local residents.
According to the study, some vacation rentals were built solely for rental to visitors, while others that were originally in the resident rental pool are now operated as vacation rentals.
Owners may be driven by the promise of higher rental rates from vacationers looking for alternatives to hotels.
So what is the impact of the visitor industry on the residential housing market in Guam?
According to the study, the current high hotel room rates and lack of available hotel rooms may lead to the expansion of short-term vacation rentals. The increasing demand for these alternative visitor accommodations could lead to the further loss of residential housing stock making it tougher for residents, especially low-income residents, to buy or rent residential properties.
The study recommends the further development of programs to assist Section 8 voucher recipients in finding and retaining housing.
Such a program could be developed internally or GHURA can partner with an NGO to support Section 8 recipients.
“The program would include working with landlords to understand the benefits of Section 8 renters and to support managing problems that may occur during rental periods. The program could be similar to the military housing program that helps facilitate finding appropriate units and offers landlords an option to work with them should problems arise. This program could help overcome objections landlords have to renting to Section 8 recipients,” the study stated.
Some potential Section 8 landlords have indicated that the cost of upgrading their units to meet HUD requirements is too high relative to the rent they receive. In addition, many units are not configured for persons with disabilities, such as hallways wide enough to accommodate wheelchairs.
To resolve this, the study recommends funding or loans to landlords to assist in upgrading their units that would meet standards for an agreement to rent to Section 8 recipients.
“Implementing this program should alleviate the challenge of vouchers not being used, and the churn of Section 8 recipients who cannot find housing having to go to the end of the list and restarting the process,” the study stated.
Finally, the study recommended the development of a more comprehensive affordable housing plan for Guam.
“Currently there is no comprehensive Affordable Housing Plan for Guam. Given ongoing population growth and the upcoming military build-up, it is essential that a plan be developed to meet those needs. Without low-income and moderate-income housing, workers needed to support the economic engines of Guam, tourism, and military, will leave, impacting the economic viability of Guam,” the study concluded.