Low-income renters at risk as shutdown wears on

The ongoing shutdown is creating uncertainty for tens of thousands of low-income tenants who rely on the fed...

Posted: Jan 10, 2019 3:57 AM
Updated: Jan 10, 2019 3:57 AM

The ongoing shutdown is creating uncertainty for tens of thousands of low-income tenants who rely on the federal government to help pay their rent.

The Department of Housing & Urban Development hasn't been able to renew roughly 1,650 contracts with private building owners who rent to poor Americans. These contracts either ran out in December or are expiring this month. Another 550 contracts are set to lapse in February.

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Those contracts cover around 130,000 households, who have an average income of $12,000 a year. Many tenants are elderly or disabled.

With no sign of the shutdown ending soon, HUD has asked landlords to draw on their reserves to cover any shortfalls. The Washington Post first reported the development earlier this week.

The Trump administration is taking steps to shield some low-income Americans from the impact of the partial government shutdown, which started in late December. The Department of Agriculture on Tuesday extended the time it can provide food stamps and other nutritional assistance programs to the end of February, a month later that the agency originally announced.

HUD officials suggested that the expiration of the rental contracts likely won't prompt landlords to begin eviction proceedings immediately.

"It's never been our experience that people were evicted by virtue of a government shutdown," a HUD official told CNN. "It would run counter to the best interests of the landlords."

But the building owners may have to delay repairs or suspend services they provide, such as transportation, after-school care or social programs, experts said. Eventually, they may have to raise the rent on those living in the apartments, they said.

Under the program, tenants pay 30% of their household income, while the federal government makes up the rest of the rent, which is based on the local market.

"Without getting that rental assistance, owners will be forced to make very difficult choices," Ellen Lurie Hoffman, federal policy director of the National Housing Trust, told CNN's Brianna Keilar.

Landlords will likely turn to the money they've set aside, if they have any, but they are also looking at other options to continue meeting their operating needs. These include reaching out to their lenders about getting a break on their mortgages if the shutdown continues, said Andrea Ponser, executive vice president for policy at Stewards of Affordable Housing for the Future, a collaborative of non-profit affordable housing owners.

A longer-term concern is that the uncertainty may prompt landlords to wash their hands of the program, especially in neighborhoods with fewer low-income residents.

"Some owners, because of experiences like this, will choose not to renew their contracts," said Doug Rice, senior policy analyst at the Center on Budget & Policy Priorities. "In that case, there's a permanent loss of affordable housing in those communities."

Overall, the agency's project-based rental assistance program serves 1.2 million households. HUD has said that it has funding to make payments on active contracts through February, but the payments are set to stop after that.

Two other agency programs for low-income Americans are more secure -- at least for the next few weeks, Rice said. The department said last week that it can continue making payments to state and local housing authorities for public housing maintenance and upkeep and for housing vouchers given to low-income residents through February. These two programs serve about 3.2 million households.

Still, some authorities may be hesitant to issue vouchers to new applicants until Congress sets the appropriation because they won't know how much funding they'll receive, Rice said.

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