Cities Scramble as Shutdown Leaves Families in Federal Housing Vulnerable

Thursday, January 24, 2019
Teresa Wiltz

As the partial federal government shutdown stretches into its sixth week, low-income families, seniors and the disabled are facing housing instability and possible evictions.

Last month, Congress failed to provide funding for key federal agencies, including the departments of Housing and Urban Development (HUD) and of Agriculture, which provide housing assistance to low-income families.

The shutdown is affecting not just unpaid federal workers, but also 4.7 million families living in federally subsidized housing, housing advocates say.

At greatest risk, they say, are those living in what’s known as project-based rental assistance, or project-based Section 8 housing. The program gives private landlords contracts to provide housing assistance to low-income tenants. HUD pays most of the rent on those units.

But according to Brian Sullivan, a HUD spokesman, 1,150 rental assistance contracts were due to expire in December and January, and another 550 contracts are set to expire by February.

Even without the shutdown, he said, the program always has contracts expiring and being renewed. He said HUD has called in staff to process expiring contracts so landlords can get paid.

“But how much we have in our own coffers is another thing,” Sullivan said. “We may not have contract payments for them beyond February.”

According to the National Low Income Housing Coalition, those expiring contracts affect 27,200 low-income households. And that number will only increase if the shutdown continues, according to the coalition. An estimated 80,000 people could lose their homes, according to the Urban Institute, a Washington-based think tank.

HUD wrote landlords Jan. 4 to ask them not to evict tenants and instead draw down on their reserves to make up for the shortfall.

So far, there have been no reported evictions, said Susan Popkin, director of the Urban Institute’s Housing Opportunities and Services Together Initiative. “But there’s a lot of anxiety.”

Red Alert

Meanwhile, locally run public housing authorities are funded through February. Most are not equipped to handle the fallout should the shutdown extend past March 1, said Sunia Zaterman, executive director of the Council of Large Public Housing Authorities, which represents 70 of the largest public housing authorities in the country.

“It’s definitely an all-hands-on-deck, high-urgency red alert for agencies that don’t have sufficient reserves for a sufficient amount of time,” Zaterman said. “And most don’t.”

The shutdown is causing other housing woes.

The Council of the District of Columbia passed emergency legislation Tuesday to protect federal workers from losing their homes as a result of the shutdown. The legislation would let judges halt eviction or foreclosure proceedings for furloughed workers.

In South Bend, Indiana, the local housing authority, already short on operating money because of the shutdown, cut its office hours and warned tenants it may not be able to make utility payments for public housing residents if the impasse continues.

And last week, Denver Mayor Michael Hancock, a Democrat, announced a mortgage assistance program for federal employees and others impacted by the shutdown.

If the shutdown continues past February, New York City stands to lose $500 million each month in federal assistance in the form of food stamps and rental assistance, according to a statement released by Democratic Mayor Bill de Blasio. Filling that void would be “unsustainable” and the city would run out of money before the end of the year, de Blasio said.

“I cannot promise we’ll be okay,” the mayor said. “Any attempt to backfill the void left by our federal government would be woefully inadequate to the scale of this crisis.”

Adrianne Todman, CEO of the National Organization of Housing and Redevelopment Officials, said local housing authorities have been underfunded for years.

Todman, whose Washington, D.C.-based membership organization includes more than 2,700 housing and community development agencies, said members will have to dip into their reserves in March to make ends meet.

Some housing authorities are cutting hours and making contingency plans to furloughed workers. And some aren’t issuing new housing vouchers to families in need, to keep those families who currently have vouchers in their homes, Todman said.

If housing authorities can hold on to their cash by not issuing a new voucher, “that’s a smart business decision, but a painful one,” she said.

“Everyone’s hoping and praying that it ends soon,” Todman said, “so they can replenish their coffers for the next shutdown that’s inevitable at this point.”

Eviction Notices

There have been reports around the country that some landlords have sent letters to tenants informing them they will be responsible for the portion of the rent that goes unpaid because of the shutdown.

And some have issued eviction notices.

“In many cases, that’s illegal,” said Michael Wallace, the federal advocacy program director for the National League of Cities, a Washington, D.C.-based membership and advocacy organization. Tenants living in subsidized housing are protected from rent increases due to nonpayment of subsidies and from being evicted, he said.

“But since HUD is shut down, there’s no way to enforce this,” he said. “If you’re a renter with a housing voucher and you get one of these notices, your best course is to get media attention.”

Local officials are on the lookout for such abuses, Wallace said, “but that’s not a great position for the local government to be in. You want landlords to participate in the Section 8 program.”

Landlords have an incentive not to evict voucher holders, HUD’s Sullivan said. Once appropriations resume, the landlords will be paid and made whole, he said.

“Evictions are a drastic action,” Sullivan said. “It’s cutting off your nose to spite your face.

“You go from receiving whatever contributions tenants make to you even during the shutdown to zero dollars.”

Housing advocates worry the shutdown and the hassles associated with it will dissuade landlords from participating in the nation’s housing voucher program. Landlords routinely discriminate against Section 8 voucher holders, especially in “high opportunity” areas with good schools and expensive housing, as Stateline has reported.

The main selling point for reluctant landlords has been the certainty of the federal Section 8 subsidy, housing experts say. But the shutdown demonstrates that the program is far from certain, said Sarah Mickelson, director of public policy for the National Low Income Housing Coalition.

“We’re already hearing from tenants who have a voucher but can’t find a landlord who’s willing to take it,” Mickelson said, “because the landlord isn’t sure the federal government will make good on its promise.”

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