With the partial government shutdown on the verge of becoming the longest in U.S. history, many housing advocates fear thousands of low-income Americans are at risk of being evicted. More than 1,000 government-backed housing contracts have already expired and potentially more will do so in the coming weeks.
Since the shutdown began last month, approximately 1,150 federal rental assistance contracts have not been renewed due to funding lapses at the Department of Housing and Urban Development.
These lapses impact Project-Based Rental Assistance agreements between private property owners and the federal government. These landlords are contracted to house low and very low-income residents. The property owner charges tenants modest rents and HUD kicks in subsidies to make up the difference.
While the expired contracts so far only account for about 5 percent of HUD’s project-based contracts, it is causing concern that more of the 1.2 million low income families housed in these multifamily properties will be in danger of losing homes as the shutdown lingers.
In a letter to landlords earlier this month, first reported by the Washington Post, HUD urged property owners to dip into their reserve accounts “to cover funding shortfalls” as a way to try to keep tenants in place.
The National Low Income Housing Coalition, an advocacy group, mapped the expired and soon to be expired HUD contracts to highlight the impact the shutdown is having on low income renters.
“Funding these contracts is necessary to keep about 150, 000 deeply poor, mostly seniors and people with disabilities safely and affordably housed,” said Diane Yentel, President and CEO of the National Low Income Housing Coalition.
Yentel worries that, with President Trump and Congressional Democrats at an impasse over border wall funding, the government will not reopen anytime soon. And that may force property owners to make business decisions that could adversely impact tenants.
“Eventually these owners will have to resort to either significant rent hikes or evictions of these lowest-income renters,” Yentel said.
Eric Johnson is the executive director of the Oakland Housing Authority which manages approximately 550 project-based properties on behalf of HUD.
Two properties he oversees, one in San Jose and another in Sacramento, have around 75 housing units between them. Johnson said neither of the properties received their January payments from HUD.
“So they’re functioning right now without really having any income from the program to support their efforts.” Johnson said.
He said those property owners, like many other across the country, will not be able to operate indefinitely from their reserves. He fears a prolonged shutdown is not good for the strength of the housing market overall.
“I’m more concerned about them ending up going into foreclosure and bankruptcy on these properties than I am really about them evicting residents,” Johnson said.
Mary Cunningham is the vice president for Metropolitan Housing and Communities Policy at the Urban Institute, a Washington-based think tank. She said the lapse in funding may deter other would-be tenants from entering into a contract with HUD in the future.
“I think this shutdown sends a very dangerous message to landlords, which is the government doesn’t pay its bills,” Cunningham said.
Officials said HUD always repays landlords and that the department has had “no tenant evictions as a result of an interruption in housing assistance payments.”
But these are uncharted times.
On Saturday, the shutdown becomes the longest in U.S. history. And in the coming weeks some 500 HUD more contracts expire at the end of the month. Another 550 expire by the end of February.