On the eve of the government shutdown in December, the Department of Housing and Urban Development assured advocates that all affordable-housing contracts expiring that month would be renewed and landlords would be paid.
If anything, a HUD official said, the shutdown wouldn’t have a serious impact on the nation’s supply of subsidized housing for the poor until February, according to Linda Couch, vice president of housing policy for LeadingAge, which represents nonprofit owners of senior housing.
But after the new year, HUD revealed that not only had the agency allowed 650 contracts to lapse in December — many having expired even before the shutdown began — more cutbacks in federal subsidies for low-income housing are imminent as the government remains closed. Another 525 contracts are slated to expire by the end of next week, and 550 more will lapse in February, according to HUD.
With many landlords across the country no longer receiving government payments, HUD has instructed them to dip into their reserves to cover mortgages and other expenses — jeopardizing budgets and the housing stability of more than 40,000 low-income households, two-thirds of whom are elderly or disabled.
Uncertainty caused by the shutdown has landlords with HUD contracts postponing planned repairs to hurricane-battered roofs and other maintenance and discussing the potential of furloughing employees and delaying utility payments.
“The situation we are in right now is more dire than certainly we were led to believe,” Couch said. “Something was really missed, and we are digging out of a bigger hole than we should be in.”
The issue underscores the agency’s fragility in the shutdown. HUD has suffered from significant turnover and internal debate as Secretary Ben Carson has brought a different set of priorities to the agency charged with providing a safety net for millions of vulnerable Americans. While the problems with the contracts stemmed from the shutdown, including its start over the Christmas holidays when some senior officials were on vacation, some of it is self-inflicted, exacerbated by a lack of planning.
Some HUD staffers said the situation could have been better managed if political leaders had asked the right questions in time to prepare for an extended shutdown. Deputy Secretary Pam Patenaude, widely regarded as HUD’s most capable political leader, resigned Dec. 17, hampering the agency’s ability to anticipate and plan for the closure, according to career and political staffers.
“The lack of leadership has been problematic,” said Richard Whiting, executive director of the Auburn Housing Authority in Maine, whose HUD contract for senior residences expired in December. “The upper levels of management either weren’t aware or didn’t think, ‘We have to push these contracts through because the shutdown is coming like a train wreck.’ ”
HUD officials, speaking in an interview on the condition of anonymity, acknowledged that staff should have had the contracts teed up before the shutdown. Carson himself has largely remained silent on the impact of the shutdown, now in its fifth week.
“Secretary Carson urges congressional Democrats to come to the table and work with the President and their Republican colleagues so that HUD can continue its mission of providing safe and affordable housing to those in need,” HUD spokesman Jereon Brown said in a statement.
Brown added that future contingency plans will take into account HUD’s current experience, which was complicated by the shutdown’s unusual timing.
“Most previous shutdowns have lasted days, not weeks,” Brown said. “Few would have imagined a shutdown over the holidays and across calendar years. Fewer still would have anticipated a shutdown exceeding 30 days.”
Beyond the lapsing contracts, HUD and the people who rely on it are being hit by the shutdown in numerous ways.
Public housing inspections have stalled in Los Angeles. Residents of subsidized housing in Chicago worry that faulty elevators, moldy air ducts and broken washers and dryers won’t be fixed during the shutdown, advocates said.
In Maine, the Westbrook Housing Authority is delaying the release of long-awaited Section 8 vouchers, initially scheduled to be issued this week, until it is sure the federal government will pay.
Instead, the housing authority will hold a briefing Thursday with 22 families.
“I’m going to say, ‘Call your president. Tell him what he’s doing to you,’ ” said Chris LaRoche, executive director of Westbrook Housing.
Already, tenants in federally subsidized housing are facing threats of eviction.
In Largo, Fla., Jessica McBride, a single mother with a HUD housing voucher worth $775 a month, said her landlord would not renew her lease because the property no longer accepts Section 8 vouchers because of the shutdown. The landlord gave her until the end of January to move out.
McBride, 33, has already begun packing, stuffing her clothes into trash bags, and is trying to save what she can from her $20,000-a-year marketing job to pay for a deposit on a new apartment.
“The problem now is when I call these other places, even though they are advertised as Section 8 apartments, the managers say, ‘Nope. We are not taking any Section 8 applicants at this time,’ ” McBride said. She said if she can’t find a new apartment by the end of next week, she will have no choice but to stay put and go through the eviction process.
Her landlord did not respond to a request for comment.
Diane Yentel, president and chief executive of the National Low Income Housing Coalition, said the shutdown has prompted more landlords to reject housing vouchers as payment, as well as to refuse to renew the leases of tenants receiving government subsidies.
“Really, why would they at this point?” Yentel said. “How can they count on the federal government to pay its bills or keep its commitments while the shutdown drags on?”
HUD said the department has enough money to fund the Section 8 vouchers through February for the 2.2 million low-income households receiving rent assistance — but will no longer be able to do so beginning March 1 if the government remains closed.
HUD is also under fire for not releasing a backlog of grants to homeless providers before the shutdown. The grants are now further delayed, even though the agency’s contingency plan characterizes the programs as critical enough to warrant bringing back furloughed staff to process the money.
Brown said Wednesday that HUD expects to make an announcement about the grants in the coming days.
“The most vulnerable among us are, and will always be, a priority for this agency,” he said.
HUD officials, even while scrambling to fix problems stemming from the shutdown, sought to play down the impact of the expired housing contracts, emphasizing that no one has ever been evicted as a result of a shutdown and that landlords have always eventually been paid. But low-income residents and property owners point out that no previous shutdown has lasted this long.
Diana Siarto, a 70-year-old former waitress and Las Vegas pit boss, moved to a government-subsidized apartment for seniors in Jacksonville, Fla., to live comfortably off her Social Security.
These are supposed to be her “golden years.”
But that security cracked this month when Siarto’s property manager called residents into a meeting to inform them that the apartment’s HUD contract had expired Dec. 1 and was not renewed before the shutdown. Reserves would last only until April.
“We’ve worked all our lives. We’re all low-income. We have no place else to go,” Siarto said. “We are literally out on the streets if these places shut down.”
Both HUD and property owners said it is routine for expiring contracts to lapse for several weeks, during which landlords are expected to temporarily borrow from their reserves. But employees who normally would have processed the renewals were furloughed as soon as the shutdown began.
HUD officials told The Washington Post that the agency has called back a daily average of 582 furloughed staffers on an intermittent basis to work on the most pressing issues, including scouring agency accounts for money to disburse payments through January for 122 newly renewed contracts.
Siarto’s landlord, a nonprofit senior housing provider affiliated with Catholic Charities, has already dipped into reserves for more than a month.
“It wasn’t until Jan. 2 when I went into the system to start paying bills that I noticed, oh, we didn’t get paid again,” said Alma Ballard, executive director and management agent of Family Housing Management Co. “That’s when I realized our contract didn’t fully get authorized.”
HUD said that the agency recently seeded the nonprofit’s account with back payments for December and January. Ballard said she has received no communications from HUD and does not know whether the agency will continue to make payments in February. (HUD says it has money to do so, provided Ballard submits a request for funding.)
Ballard said she sent an email to the official HUD contact for the Jacksonville region but received an automated reply: “I will not be able to check this email box during the shutdown. Please feel free to contact me once the Federal government reopens.”
Damian Paletta contributed to this report.