Royla Rice had the ingredients of a new life.

She’d finished her master’s degree in public administration. She was ready to move from a neighboring suburb to Colorado Springs for her career. And she had a housing voucher, an increasingly hard-to-find government benefit that helps people pay their rent.

“I expected a pretty smooth transition,” said Rice, 53. Instead, within a matter of weeks, she found herself “completely stressed out. I’m absolutely out of my mind. I’m scared that I was going to end up homeless. And to put it up front, I did.”

Despite her education and experience, Rice nearly fell through the cracks of the program commonly known as “Section 8.” She was rejected time after time as she searched for a one-bedroom apartment. She had a golden ticket and nowhere to spend it.

It’s a common experience for the roughly 30,000 households across Colorado that receive federally funded Housing Choice Vouchers and other similar benefits. The vouchers are in hot demand — only 1 in 21 applicants might win Denver’s lottery this year. Recipients often use the vouchers to pay private landlords.

But, as Rice discovered, landlords don’t have to accept the payments.

“I said, ‘Why am I getting so many problems?’” said Rice, a member of the working women’s advocacy group 9to5 Colorado. “Section 8. As soon as the words come out of my mouth, they hung up on me.”

A hot housing market only makes it harder to convince them — and people like Rice can lose their benefit if they don’t find a place within a few months.

Housing reformers say it’s a form of discrimination that keeps low-income people out of good housing. In Denver, a year-old city law requires that landlords accept vouchers. And it’s likely to be a contentious issue at the statehouse this year as Rep. Leslie Herod and other legislators push for a similar requirement for the entire state.

“There is no reason not to allow folks to live in your facility, and there’s no reason for the state to continue to allow this form of discrimination,” said Herod, a Denver Democrat.

A previous attempt in 2018 failed amid acrimonious debate — but Herod’s more confident this year with a Democratic trifecta at the Capitol. And for both sides, Rice’s situation highlights a crucial challenge for a system that attempts to combine public benefits with the private market.

“Unfortunately, the Section 8 system is pretty cumbersome to work with. It is a challenge,” said Richard Sturtevant, owner of Pioneer Property Management, a rental broker. “We work with it when necessary.”

He had researched Denver’s new law to get in compliance, he said. But some Pioneer listings still forbid vouchers. Those homes are owned by single-property landlords, Sturtevant said — properties exempted from Denver’s new law.

“My view is that Section 8 is a valuable part of the affordable housing solution, but it’s not for everyone,” said Teo Nicolais, an owner of small rental properties and a real estate instructor at the Harvard Extension School.

Common complaints include inspections required by the program, delays in payment and the difficulty in reclaiming costs when homes are damaged.

“The question is, how does the landlord get repaid for that damage?” Nicolais said. “I have personally experienced the problem of someone causing over $10,000 of damage to my property. They broke every single door. They actually broke the tub, which was weird.”

The problem is with the vouchers, not the people, he said. Voucher money is protected from lawsuits. So, if tenants don’t have cash income, it’s harder for landlords to sue and recoup damages. In Nicolais’ case, he said, the damaging renters had paid a $500 security deposit. He took on credit card debt to fix the property, he said.

The effects of Denver’s ordinance, spearheaded by Councilwoman At-large Robin Kniech, aren’t clear yet. So far, the city has received two complaints about income discrimination, but both were outside Denver.

As of 2017, 13 states, 63 municipalities and the District of Columbia had similar laws, according to Andrew Aurand, vice president of research for the National Low Income Housing Coalition.

An Urban Institute study showed that landlords in those areas may be friendlier to vouchers. In contrast, nearly 80% of landlords in Fort Worth and Los Angeles, which lacked source-of-income laws, rejected vouchers outright.

In Colorado Springs, Rice had to become her own advocate.

She originally won her voucher in 2015 in nearby Fountain, where she lived while earning her master’s from the University of Colorado at Colorado Springs. Finding housing in the outlying suburb was simpler, she said, but then she wanted to get into the city for career opportunities and to get closer to her part-time job at Home Depot.

She knew that she had enough money and voucher credit to cover the rent, and she saw numerous apartments listed on the website of the Colorado Springs Housing Authority. So she put in her notice and filed the paperwork for the transition.

But, one by one, she was rebuffed and rejected. After months of trying, she put her stuff in storage and prepared for a weekend without a home.

“I slept in my car in a Walmart parking lot that night. It was terrifying,” she said. The next night, she slept in a campground at Woodland Park, then she spent a night in a motel.

Finally, that Tuesday, she learned that a manager would accept her voucher. Today, she’s paying about $440 in monthly rent from her minimum-wage paychecks, while the voucher picks up $560, she said. She’s still paying off her student debt and looking for work in public service.

“I think there need to be standards, at least the state level, where people know what to expect. The rules and process are different for whatever city,” she said. “It needs to be people-focused instead of checking a checklist, a bureaucratic checklist.”

It’s difficult to say exactly how often people struggle to use their vouchers. Denver Housing Authority could not immediately provide data on how many people have surrendered vouchers after failing to find a place.

In Denver, Raquel Martinez, 40, said she has had to move a dozen times since receiving a voucher from Denver Housing Authority in 2010. She is avoiding an abusive ex-husband, she said, and she worries each time that she’ll lose the voucher.

“If this happened, it would destroy my life,” said Martinez, who pays about $400 from her income as a front-desk assistant at a hotel. The voucher picks up $800 of her rent in Denver. And even this year, she has had rental managers disappear once she mentions Section 8.

“They don’t respect the voucher,” she said.

Voucher holders also must find a unit that meets federal standards for “fair market” rent in the area. The federal limit can lag behind spiking rent prices, making it difficult to find a unit at the right cost.

“We have some consumers who haven’t been able to find any landlords in (Denver), so they’ve had to move to Aurora or Jefferson County or other outside counties who have more options,” said Rosemary McDonnell-Horita, a coordinator for Atlantis Community Inc., which provides support for people with disabilities.

“We have success stories here, but a lot of times, the voucher is not the golden ticket,” McDonnell-Horita said.