With the government shutdown now surpassing a month, and the future still relatively uncertain, the functioning of HUD and many other federal organizations has reached a standstill. A government shutdown not only impacts federal workers and government employees, it also has a very real impact on landlords and tenants.
You may be thinking, why are we talking about politics in a Fair Housing blog? As it turns out, the government shutdown has a direct impact on Fair Housing, specifically on the housing choice voucher program (formerly known as Section 8). As a refresher, these vouchers are federally funded, given by local organizations (known as public housing agencies, or “PHAs”), and used to subsidize the rent of qualifying tenants—making the costs more manageable (as tenants now only have to pay the balance after the voucher is applied). In order to qualify, the tenant must be either low-income, elderly or disabled, which means we are talking about a vulnerable population here.
The longer the government is shut down, the more depleted the federal funds will continue to get. It is projected that by the end of February, the majority of federal housing assistance funding will be gone. Therefore, if the shutdown continues much longer, the PHAs face a real possibility of losing federal funding altogether, leaving both landlords and these vulnerable tenants in a nearly impossible position.
So, what’s the bottom line? What happens if/when the federal funding runs out and tenants are not making rent? Unfortunately, there is no easy or clear cut answer. First, I will say—start preparing now. Formulate a game plan for how you will handle your residents utilizing housing vouchers if worst comes to worst and federal funding runs out. Bear in mind that the shutdown will presumably end, and once the government is back open you will receive full funding. We are in uncharted territory here when it comes to evictions, and landlords should proceed cautiously when evicting based on the housing voucher program’s shortfall—the only advice I can offer is that, if you make the decision to evict, be as consistent and uniform in your policy implementation as possible.