As the record-long government shutdown continues, more and more Americans are beginning to suffer its effects, particularly those in low income or subsidized housing. At this time, over 1,100 federal assistance contracts with property owners have expired with the possibility of an additional 1,000+ expiring by the end of February. 

The current lack of funding at the Department of Housing and Urban Development (HUD) has caused a lapse in agreements between private property owners and the government. These agreements are for these private owners to provide housing to low and very-low income tenants with the government picking up a portion of the rent.   Once such a contract is in place, the property owner can rent to tenants, who, through their own agreements with the government, are to receive rental subsidies to offset their rent. 

While the number of such expired or expiring contracts is relatively small, it is nonetheless estimated by the National Low Income Housing Coalition that these contracts impact 1.2 million  low income American families.  

Earlier this month, HUD contacted the property owners who are parties to such expired contracts urging them to dip into their “reserve funds” to cover the lapse in funding to keep residents in their current homes. 

In response to these impending issues, Diane Yentel, President and CEO of the National Low Income Housing Coalition tweeted that “funding these contracts is necessary to keep about 150,000 deeply poor, mostly seniors and people with disabilities safely and affordably housed.” 

Despite the fact that HUD has, after previous government shutdowns,  invariably repaid landlords for missed payments, Yentel still has concerns that, “eventually these owners will have to resort to either significant rent hikes or evictions of these lowest-income renters.” 

As this shutdown continues into uncharted territory, property owners and landlords will be faced with ever-more difficult decisions regarding the future of their low-income residents who receive government rental subsidies. Beyond the short-term effects on owners’ income and profit, this latest shutdown will doubtless leave a lasting mark on property owners’ relationships with the government and their  willingness to partner with it in providing housing to the most economically vulnerable Americans.