If the federal government shutdown continues into March, it could jeopardize the housing of some of Durham’s most vulnerable residents.
The government has been partially shut down since December 21 amid a standoff between President Donald Trump and congressional Democrats over funding for a wall along the Southern border.
One of the agencies hardest hit by the shutdown has been the U.S. Department of Housing and Urban Development. About 95 percent of its employees have been sent home and prohibited from doing work. For public housing authorities across the country – including in Durham – that’s created uncertainty over when more money to operate public housing developments and subsidize the rents of low-income tenants may be available.
Anthony Scott, CEO of the Durham Housing Authority, says the agency has the funds to pay landlords who take tenants through the Housing Choice Voucher program – also known as Section 8 – through February. That money is used to fill the gap between what low-income tenants can pay – capped at 30 percent of their household income – and the value of the units they rent.
The funding only comes down from the federal government a month in advance, Scott says, and per HUD regulations the agency keeps less than 10 percent of what it needs monthly in reserves. Without this assistance, Section 8 landlords would experience a shortfall.
“A good chunk of our landlords are one-unit, two-unit, three-unit type of landlords, so their margins are very, very narrow,” Scott says. “If they don’t get their payment, then they can’t pay their mortgage. That’s a very different scenario than somebody who has hundreds of units and might be able to make it work.”
DHA’s voucher program supports about twenty-five hundred families. Earlier this month, HUD instructed some landlords to use their reserves to cover shortfalls, and an agency spokesperson told NBC News that, following previous shutdowns, HUD has issued reimbursements.
Administrative funding for staff in DHA’s voucher program is released along with the housing assistance payments, meaning those positions are also currently funded through February.
Scott said HUD has given DHA conflicting information about what might happen with Section 8 payments after February (The agency pays local landlords on the first of each month). Some memos have said February payments will be the last to come, others have said funds would be available for March and April.
But with both Trump and Democrats holding fast to their respective positions on funding for some kind of border barrier, a month of funding doesn’t provide much comfort. DHA plans to work this week on a contingency plan in the event the shutdown stretches into next month.
What that plan would look like isn’t yet clear. It could include asking for a loan from the affordable housing-friendly Durham City Council. Scott said the Richmond Housing Authority, where he previously worked, was forced to ask for city money to support its Section 8 program when a HUD policy change tied up housing funds nationwide. The agency ended up not needing the funding, so the details of how the loan would be dispersed and paid back were never worked out.
“I’ve done it before, in terms of the ask,” Scott says. “I just don’t know how it would really work.”
There’s a little more wiggle room for DHA’s public housing program – which houses nearly four thousand tenants – because the agency has about four months of operating costs in reserve.
So far the shutdown has not affected DHA’s work toward redeveloping its public housing buildings through the federal Rental Assistance Demonstration Program, which requires participating agencies to get HUD approval within certain timelines. Housing inspections by DHA staff are continuing, but mandatory health and safety inspections by HUD have been suspended nationwide. Across the country, more than one thousand federal housing contracts with private landlords have expired amid the shutdown.
Scott says if the shutdown continues for more than a month, it could have “major impacts.” He watched Trump advocate for the border wall in a televised address to the nation Tuesday night, and says it’s pretty clear the president isn’t willing to compromise on funding for the wall. This may be the third shutdown under Trump’s administration, but it’s the first one that’s caused concern for Scott and DHA.
“If it drags on, we don’t know what’s going to happen with HUD’s functionality,” he said.