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Thousands at risk of eviction after HUD contracts expire thanks to shutdown

Federal contracts for low-income housing aid have expired during the current shutdown, and can't be renewed


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Igor Derysh
January 9, 2019 11:00AM (UTC)

Thousands of Americans are at risk of eviction after federal contracts for more than 1,000 government-funded properties for low-income renters expired during the partial government shutdown and cannot be extended.

The Washington Post reported that the Department of Housing and Urban Development (HUD) sent letters to 1,500 landlords in a “last-minute effort” to stave off the eviction of thousands of families. The tenants live in units that are funded by a HUD program that many agency officials “didn’t realize had expired” on Jan. 1. The contracts cannot be renewed because of the shutdown.

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The letter from HUD asks landlords to use their reserves, where available, "to cover any shortfalls.”

HUD spokesman Jereon Brown told NBC News that about 1,150 contracts expired since the shutdown began, which is roughly 5 percent of all contracts covered by a Project-Based Rental Assistance program, which provides rent subsidies to 1.2 million low-income families. Another 500 contracts will expire in January and 550 would expire in February if the shutdown continues.

“Historically, HUD has reimbursed owners following a shutdown and never experienced evictions,” Brown said in a statement, adding that despite 95 percent of its staff being furloughed, the remaining workers are “looking at all accounts for funding to reinstate those contracts that don’t exist now.”

Ellen Lurie Hoffman of the affordable housing advocacy group National Housing Trust told NBC News that HUD reassured her organization that the contracts would be renewed on time.

“It’s a mess,” she said. “The pain is coming a lot earlier than we thought.”

Hoffman added that even if landlords are reimbursed after the shutdown, forcing them to tap into limited reserves may result in rent increases, delays in critical repairs, or evictions.

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“It’s confusing to me why HUD wouldn’t have prioritized that and assigned staff to make sure this wouldn’t happen," she said. "It’s a huge number of contracts and properties and residents."

Brown told NBC that landlords whose contracts have not expired would continue to receive payments through January and February but some landlords say that isn’t the case either.

Melissa Steele, who runs an affordable housing real estate company in the Washington area, told the network that she did not receive a January payment from HUD despite a contract that runs through February. Steele, whose company E&G Group runs a building housing 120 low-income seniors, said the check never came.

“I checked the account several times today, and it’s not there,” she said, adding that when the company reached out to HUD they were greeted with an automated reply because most of the agency’s staff has been furloughed.

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HUD is far from the only agency experiencing unforeseen consequences of an extended government shutdown. The Washington Post reported over the weekend that the administration “recognized only this week the breadth of the potential impact” and was now focused on “understanding the scope of the consequences and determining whether there is anything they can do to intervene.”

If the shutdown continues, millions of Americans may see their food stamp benefits disrupted because the Supplemental Nutrition Assistance Program (SNAP) is set to run out of money by February.

Meanwhile at the Treasury Department, officials are scrambling to avoid the delay of millions of tax refunds that typically begin in early February. Last year, the IRS paid out nearly $150 billion in tax refunds to 48.5 million households by March 2.

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Republicans and the White House have had ongoing discussions about ensuring that the tax refunds and food stamps are funded as needed to reduce the political pressure of the shutdown, even as roughly 800,000 federal workers are out of work or working for without pay. Some workers, like TSA agents, have started calling in sick en masse because of the furloughs.

Despite the mounting unforeseen problems caused by the shutdown, President Trump has been unrelenting in his demands for funding for his proposed border wall. According to Senate Minority Leader Chuck Schumer, he and House Speaker Nancy Pelosi tried to convince the president to reopen the government while negotiations for the wall continue.

Trump refused, Schumer said, telling the Democratic leaders, "I would look foolish if I did that."

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Igor Derysh

Igor Derysh is a New York-based political writer whose work has appeared in the Los Angeles Times, Chicago Tribune, Boston Herald and Baltimore Sun.

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