Although the government shutdown has come to an end, long-term damage has already been done to affordable housing programs in the form of distrust.
The Department of Housing and Urban Development (HUD) is responsible for funding project-based assistance programs, voucher programs, and other affordable housing programs throughout the U.S.
During the shutdown, HUD was unable to renew contracts with private landlords in project-based rental assistance programs, known as Section 8, which pays landlords the difference between the amount of rent a household can afford to pay and the rent for a housing unit. A total of 1.4 million households use Section 8, with an additional 2.2 million using portable rental vouchers.
And even though the funding for these contracts resumed, individuals who use these housing programs may suffer negative consequences going forward.
“I’m very concerned about the longer-term damage to the reputation of [Section 8 housing] and other HUD programs that depend on private market participation to function,” Diane Yentel, director of the National Low Income Housing Coalition, told Yahoo Finance.
Despite the shutdown coming to an end, “if landlords or property owners see federal funding as unreliable and volatile, they’ll be less willing to participate in these crucial programs,” she said, “which will do long-lasting harm to low-income renters in need of these programs.”
‘There’s no legal protection for voucher holders’
Exacerbating the issue, it is legal in most cities for landlords to discriminate against people using government programs for housing.
“There are some states’ localities that have laws in place prohibiting discrimination against voucher holders, but we’re talking about in the dozens around the country,” Rice said. “In the vast majority of communities, there’s no legal protection for voucher holders except ones that are really limited. In a case of properties that receive other kinds of federal subsidies, such as low-income housing tax credits, those properties are prohibited from discriminating against voucher holders.”
These pieces of anti-discrimination legislation are known as source of income laws. States that enforce these include Connecticut, Delaware, Maine, Massachusetts, New Jersey, North Dakota, Oklahoma, Oregon, Utah, Vermont, Washington, and the District of Columbia. There are also various counties and cities across the country that have these laws.
“Families need certainty. Property owners need certainty. Lenders need certainty. And the only thing they’re getting from Washington right now is uncertainty,” Habitat for Humanity International’s Vice President for Government Relations and Advocacy Chris Vincent told Yahoo Finance in a statement. “Funding interruptions seed doubt that hurt those who use USDA loans to purchase homes in rural areas, families who get rental assistance from HUD, and builders that use community development dollars to build affordable housing.”
Vincent further called on Congress and the White House to “implement policies that provide more stability and address our nation’s affordable housing shortage.”