Across the country, many privately owned HUD-financed affordable apartment complexes include partial or 100% project-based Section 8 contracts which provide rent subsidies for the lowest income tenants.  When those Section 8 contracts come up for renewal, owners have the opportunity to “opt out” or not renew the Section 8 contracts.  In order to protect the low-income tenants from the loss of the project based subsidy, HUD will normally provide vouchers as a substitute, known as Tenant Protection Vouchers (TPVs) and Enhanced Vouchers.  

HJC and other preservation advocates have always believed that these TPVs come with a “right to remain,” which means that tenants have the right to remain at their current building even after the opt-out, with the TPV or EV paying the remainder of the rent. (The main exception to the right to remain is where the owner is no longer operating the property as rental property.)  

An owner in the Philadelphia area opted out of the Section 8 contract and then told tenants they would have to move and could not stay with their TPV.   The tenants sued to keep from being displaced, but the Court ruled in favor of the landlord, concluding that there was no legal right to remain. This ruling not only jeopardized the situation of these tenants but threatened to undo a major displacement protection across the country.

The tenants appealed the ruling to the Third Circuit Court of Appeals.  HJC co-authored an amicus brief to make the point that both the statute and HUD’s interpretation of it confirm the understanding that tenants in this situation have a legally binding right to remain after an opt out.  The Court subsequently issued a decision making that very point and affirming that tenants across the country need not be displaced because of an owner’s decision to opt out of a Section 8 contract.   Because this decision is at the circuit court level, it will carry great weight nationally.  The case is called Hayes v. Harvey.