Government Shutdown Could Stop Rental Subsidies to Low Income and Elderly

by Steve CookJanuary 17, 2019

Some 40,000 low-income families and elderly or disabled tenants who rely on assistance from the federal government to pay their rent may suffer severe rent increases or even eviction from their homes because the Department of Housing and Urban Development doesn’t have the money to renew contracts to provide rental support and incentives to their landlords.

The Campaign for Housing and Community Development Funding, a coalition of housing advocacy groups, sent a letter to congressional leaders last week outlining the effects of the shutdown on affordable housing and community development. In the letter, the coalition mentioned that over 1150 contracts with private building owners expired on December 22 or are scheduled to expire this month, and 550 more contracts covering roughly 21,500 low income, elderly, and disabled tenants will be up for renewal in February.

“The cliff really comes in early March,” said Diane Yentel, president and CEO of the National Low Income Housing Coalition.  “And, if this shutdown were to go that long, we’d have a severe crisis on our hands because we would have over two million voucher holders who wouldn’t be able to pay the rent to their landlords who would be expecting that money to be coming through.”

More than two-thirds of households in these programs are seniors or people with disabilities; most of the rest are families with children. On average, these households have incomes under $13,000, well below the federal poverty line. Housing aid significantly reduces poverty, food insecurity, homelessness, and other hardships, according to the Center for Budget and Priorities.

“Each day of the shutdown makes it harder and harder for the nearly 10 million people who live in HUD-assisted housing – low-income families, people with disabilities, veterans, and the elderly – to avoid eviction, keep their heat turned on, and access health care and supportive services, Congress and the Administration must find a way to restore funding for programs critical to the livelihoods of Americans across the country,” said Enterprise Community Partners President Laurel Blatchford.

Last week, HUD sent letters to the landlords whose contracts expired in December with the intention (according to a HUD spokesperson) of trying to persuade the building owners not to evict the tenants. HUD has also indicated that it can’t renew the numerous additional contracts coming up for renewal in January and succeeding months unless the shutdown ends.

“HUD has asked owners of these properties to dip into their savings, if they have any, to cover the costs. Some will be able to do so, but not forever, and some have already communicated to their tenants that rent hikes are coming. The longer the shutdown goes on, the more untenable it will become for properties owners to keep scraping by without their federal contracts – and the more the lowest-income renters will suffer,” said Ms. Yentel.

Project-based affordable housing supports 1.4 million households. An additional 2.2 million households use portable rental vouchers, which are funded until March.

Are you a current homeowner or looking to buy soon? Be sure to check out how the government shutdown impacts mortgage loans.

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About The Author
Steve Cook
Steve Cook is editor and co-publisher of Real Estate Economy Watch. He is a member of the board of the National Association of Real Estate Editors and writes for several leading Web sites, including Inman News. From 1999 to 2007 he was vice president for public affairs at the National Association of Realtors.