Furloughed Government Workers, Very Low-Income Tenants and Those Who Help Them Risk Homelessness
Parts of the federal government have now been shut down for almost three weeks. President Trump continues to insist Congress significantly increase funding for a southern border wall.
The government shutdown will impact HUD funded programs and put very low-income households at risk of being homeless.
Furloughed government workers who live pay check to pay check may be at risk of eviction or not being able to may their mortgages. And programs and landlords that rely on HUD funding may not be able to make payroll for their employees.
On January 4, 2018, HUD sent letters to 1,500 landlords clarifying what activities will continue to take place during the first 30 business days of the shutdown. The letters also clarify how to prevent the eviction of thousands of tenants who live in homes covered by the Section 8 Project-Based Rental Assistance program or Section 202 (for the elderly) and Section 811 (for people with disabilities) programs.
According to one of the letters, HUD will continue to make payments under Section 8 contracts, rent supplement contracts, Section 236 agreements, and Project Rental Assistance Contracts (PRAC) on an as needed basis, but only if HUD has available budget authority from prior year appropriations or recaptures.
The letter also states that owners of properties with FHA insured mortgages or 202/811 Capital Advances may submit requests for releases from their reserve for replacement accounts to cover funding shortfalls caused by non-payment of monthly rental subsidy.
A Washington Post article states that HUD spokesman Jereon Brown says “[HUD] budget and contract staff are ‘scouring for money’ to figure out how to fund the contracts on an interim basis.”
HUD staff have indicated to the National Low Income Housing Coalition (NLIHC) that while resources for project-based assistance are sufficient for January, funding becomes more uncertain if the shutdown lasts beyond this month. If that were to occur, HUD would likely enter short-term contracts or short-fund project owners. Short-term renewals and short funding is disruptive to administrative staff work and destabilizing for private owners and investors in PBRA properties.
NLIHC has also learned that HUD can provide sufficient funding to PHAs to maintain all vouchers in use through January and February, and similarly to fund public housing operations through that time. PHAs will, however, be delayed in receiving funding related to the public housing capital fund to help address pressing capital needs, putting low-income tenants at risk.
Additionally, PHAs — particularly smaller PHAs with fewer funding reserves available to them – may not have adequate funding to maintain their own operations.
Before the government shutdown, Congress and Senate spent much of 2018 negotiating funding levels for the entire government including HUD and other lifelines for people experiencing homelessness.
In these spending bills, Congress set aside billions of dollars for homelessness programs. The reported numbers represented solid increases over the prior year, though still not enough to end homelessness.
But homeless services are under serious threat from the shutdown. The funding levels agreed to by Congressional negotiators may end up on the chopping block as Congress searches for a solution to reopen the government.
We need Congress to keep its commitment to expanded funding for homeless services. Our communities need all the federal resources we can get to continue making progress to end homelessness.