The partial government shutdown is in its third week. As it drags on, the risks for the 4.7 million very low–income households—families, seniors, and people with disabilities—who live in federally subsidized housing are becoming clear. The most widespread risk is felt among people living in project-based rental assistance (project-based Section 8) properties.
This program provides long-term contracts to private owners to fund housing assistance for eligible low-income tenants living in their units. Because of the shutdown, about 1,150 of these contracts have expired, leaving 80,000 people—mostly seniors and people with disabilities—at risk of losing their homes. Under the program, the US Department of Housing and Urban Development (HUD) pays most of the rent for these units. Without the HUD guarantee, landlords—who must pay their own mortgages and expenses—will face financial pressure to evict these low-income tenants and turn over the units to others who can afford to pay the full amount.
Thus far, HUD’s response to this looming crisis has been to send a letter to the 1,150 landlords, asking them to use their reserve accounts rather than evict these vulnerable tenants. Many of these landlords are mission-driven nonprofits who are likely to try hard to avoid having to evict tenants and possibly leave them with nowhere to go.
But landlords are under no obligation to follow HUD’s guidance, leaving tenants facing an uncertain situation and the possibility of becoming homeless.
Families in public housing are also at risk of losing basic services
In addition to the expiring contracts, the shutdown is posing threats to tenants who live in public housing or use housing choice vouchers to rent homes in the private market. Public housing authorities administer both programs, and they are already feeling the effects. HUD’s contingency plan instructed housing authorities to continue using the funds they had allocated for basic operations and for paying rents for voucher holders.
But all HUD inspections and funding for capital repairs are suspended except for extreme emergencies. Already, there have been reports of tenants who are left living in hazardous conditions thanks to the shutdown.
Even more alarming, because Congress has not passed the HUD funding bill, housing authorities have enough funding to continue operating only until the end of February. That means they have likely already put a hold on processing any new applications for rental assistance.
If the shutdown continues, housing authorities may have to suspend paying rents for housing choice voucher holders, leaving those tenants at risk of eviction. They may also have to suspend resident services, including property management. And they may have to furlough or lay off staff, many of whom will then be left struggling to pay their own rents and mortgages.
Larger housing authorities with operating reserves may be able to continue operating at a reduced level for some time, but the very low–income households who depend on their services will suffer.
Smaller housing authorities who have smaller operating reserves are likely to feel the pinch first. We have spoken to one such agency that is already planning to notify its housing choice voucher landlords next week that they may not be able to pay the rent after this month.
If the shutdown drags on, it could leave an increasing number of the nation’s most vulnerable families with a weaker or nonexistent safety net.