NC Budget and Tax Center

Federal government shutdown affecting housing access

The partial federal government shutdown is worsening the documented affordable housing challenge across North Carolina by disrupting the systems that provide housing support and assistance in various forms to families across the country and state.

Most directly, the partial government shutdown has affected the operations of Housing and Urban Development programs, with 95 percent of personnel furloughed, and the ability of the agency to renew contracts for project-based rental assistance. Nationwide, this project-based rental assistance goes to private landlords and fills the gap for more than 1 million households living on low incomes who pay rent and for whom the rental assistance fills the gap from that amount up to the contract rent.

In North Carolina, an estimated 118 contracts have expired or will expire through February, affecting the availability of early 2,000 units statewide. The map below provides a view of the counties where these contracts are currently at risk because of the shutdown.

Click here for an interactive version of this map. 

Additional immediate impacts in housing include effects on Public Housing Authorities. A recent article about efforts to renovate Public Housing Authority properties in Durham highlighted that demolition and inspection efforts nationwide have been suspended, stalling efforts to upgrade and improve housing conditions for families and seniors with very low incomes. In addition, some Public Housing Authorities may have limited hours or funding to deliver services beginning in March given that they have been instructed to use reserves, which vary by location.

Should the shutdown continue into next month, the Housing Choice Voucher program could face challenges in making subsidy payments, affecting an additional 2.2 million households nationwide.  In North Carolina, 140,600 people use this  program to fill the gap in their monthly rent. Sixty-eight percent are seniors, children or people with disabilities.

Like project-based rental assistance, this is also a program that works with private landlords. As Center on Budget and Policy Priorities analysts note:

“When rental assistance contracts expire and aren’t renewed, owners suffer a large, immediate drop in their rental revenue, which they use to pay their mortgages, insurance, and property taxes; repair and otherwise maintain their buildings in good condition; and pay staff. Most owners have sufficient reserves to cover such large losses for several months, but some don’t — and few if any owners can absorb such losses for an extended period without risking default and loss of the property.”

As the North Carolina Housing Coalition reported in its latest newsletter, homeless assistance grants that provide supportive housing options for people are not currently at risk and the HOME Investment Partnerships Program and Community Development Block Grant program will continue to be funded where prior year funds are obligated. That said, a number of applications and reviews are not being processed for home loans, affordable housing development, and funding for disaster recovery.

Additional information on the federal shutdown impact from the Campaign for Housing & Community Development Funding on housing can be found here.

The latest barriers to addressing North Carolina’s affordable housing crisis brought on by the partial government shutdown are avoidable. It is past time to re-open the government. Our community well-being and that of our neighbors is at risk when we fail to recognize the important role that federal programs and services play in our daily lives.

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