Government shutdown implications

16 Replies

Will the government shutdown affect section 8 rent payment or lease renewals in illinois (CHA or HACC). Appreciate any insight or perspective regarding this potential issue. Thanks

@Alberto Fernandez I have spoken with several people at the CHA last week and the company line is that they do not expect payments to be disrupted yet??

My take away is that it is a real possibility our HAP payments may not be deposited, but we won't know until very end of month because they are not going to announce it until last moment.

My question is if HAP payments not paid for Feb and let's say government reopens and payments resume in March, will we get missed Feb payments or just have to eat the loss?

Some Renters Are Already Facing Eviction, Thanks To The Shutdown
https://www.huffingtonpost.com/entry/shutdown-low-income-renters-housing-programs-section-8-eviction_us_5c3e1823e4b01c93e00e1a86

I'm not familiar with all of the different government programs, but for Pensacola, the city is covered through February in terms of the Federal money it passes along to its affordable housing programs. What I find disconcerting is we're starting to discuss the possibility of a shutdown extending into an indefinite future.

California had this problem a few years ago (its state constitution specifies a deadline the legislature must meet, but has no penalty for missing the deadline). California voters passed a proposition requiring legislators to forfeit permanently a day's pay for every day they are late with the budget. That solved the problem.

Ashley,

This is from the article: " An Arkansas property manager has reversed her previously stated position that because of the government shutdown, her tenants would have to pay the full amount of their rent or face eviction. “They will be getting a letter today letting them know that we would be funded and that they will continue paying the amount that they have been paying,” Annette Cowen, the manager, told HuffPost.

So it seems no one is getting evicted. I can't imagine any landlord evicting any tenants, unless they're a problem tenant.  Those landlords will use the shutdown as a crutch, to evict them.  So maybe that's a blessing for some landlords. But the government will pay them their money. Does anyone truly think that landlords are going to evict good tenants because of the shutdown?  They have to pay to file the eviction, they have to pay attorney fees, they have to go through the entire legal process and most likely have to pay for the sheriff to evict them. God only knows how long it will take to get them out too. Then they have to pay to get the place back in "rent ready" shape. They have the expense of finding another tenant and they'll most likely lose a minimum of 1 months rent, if not more, trying to find another renter. I find it very hard to believe that anyone with common sense will start evictions on "good" tenants. I understand the landlords want their money and I don't blame them in the least. But it's NOT the tenants fault. After all, the landlords chose to rent to people on Government assistance!  It seems this is much ado about nothing.  

Ashley, Rodger and Scott, thank you for sharing your perspective. I agree we will find out until the last minute if we get pay or not in February, March or the month they run out of money. If they stop paying landlords, I believe they will pay us back as soon as the government re-opens. The biggest concern will be managing all the bills while payments stop, renewing leases and getting stuck in the middle with a new section 8 lease process, postponing the move in or cancelling it. 

Definitely important to be diversify with market tenants to reduce this exposure on this kind of risk or unilateral government decisions on the program payments, terms and rules. 

Alberto,

I agree that the concern is getting paid by the government. I highly doubt they're going to leave landlords stranded and not pay them. That seems highly unlikely. Diversification can definitely help lower the risk. 

@Scott Steffek,

My point is that this is uncharted territory and many landlords had not really considered non payment prior to government shut down.

I am fortunate in that I have planned for something out of the ordinary so I will not be affected, and all my vouchered tenants have nothing to fear from me in the way of eviction and business will be conducted as normal.

The newbies or those landlords that haven't planned for a black swan event may not be as fortunate.

Proper planning and ample cash reserves can make or break you in this business and this is a good wake up call for us all.

@Ashley Pimsner Your comment on "some renters are already facing eviction" leads me to a question - can we evict tenants if the vouchers/payments are not received on time? Or is it a stated-specific question?  Thank you in advance!

@Yannes Chiang that headline was taken directly from the Huffington Post and retracted according to @Scott Steffeck.

I don't know the answer to whether or not we can evict tenants if we are not paid by HUD, but it makes me think that I should review my lease and include language that permits me to do so just in case it became necessary to survive.

Once again ample cash reserves are key.

Hello,

I just received this email from the CHA or Chicago Housing Authority and thought I would share.

Dear Valued Business Partner:
On Saturday, December 22, 2018, funding for 9 of the 15 federal agencies expired and the federal government initiated a partial shutdown. The U.S. Department of Housing and Urban Development (HUD) is among the 9 federal agencies impacted by the shutdown.HUD allocates 100% of the funding to public housing authorities (PHAs) that administer the Housing Choice Voucher (HCV) Program nationwide. Through this allocation, the federal government provides budget authority to PHAs to issue Housing Assistance Payments (HAP) to private market property owners who make units available for families participating in the HCV Program.

You are receiving this notification because the partial shutdown of the federal government, if continued, may delay future HAP to property owners. Delayed payment due to the government shutdown is outside CHA's control. At this time, CHA anticipates that HUD's current HAP funding levels will allow for timely HAP disbursement through February.


For a list of FAQs, click here.
While we anticipate that this will be a short-term event, we recognize that voucher holders and our agency have obligations that must be met. Therefore, we ask that you consider the temporary and unforeseeable nature of this shutdown and also consider that this shortfall of HCV Program funding is not the fault of the voucher holder(s). When this shutdown has ended, and HUD has received full congressional funding, PHAs will be able to pay their portion of a voucher holder's rent. We fully anticipate that Congress will provide HUD with funding to retroactively make payments to property owners.

Given the extraordinary circumstances, we ask for your continued partnership in housing our families. Thank you for your patience and consideration.


Please continue to check the Owner Portal and CHA website for updates. We will keep you informed as we learn more.

Sincerely,
HCV Program Staff

Thanks @John Casmon ! The tenant is expected to move in on the Feb 16th, so hopefully at that time the government shutdown will be over, but I will continuing the showings in the meantime.

little giggle inside of me as every one use to say can't go wrong with renting to Section 8. You get paid one the 1st every month like clock work.....What a monkey wrench this has thrown into the world of landlords

Originally posted by @Federico Gutierrez :

little giggle inside of me as every one use to say can't go wrong with renting to Section 8. You get paid one the 1st every month like clock work.....What a monkey wrench this has thrown into the world of landlords

Funny, my experience was the inspectors found every reason to fail me so I never got that clock work experience. I had no issues with the people, just the process. 

@Yannes Chiang

To clarify- if you click on FAQ in my former post sent to me from CHA, it clearly states in the HAP contract you signed does not allow for eviction of tenants for non payment.

@Federico Gutierrez 

Schadenfreude a bit petty.

@Ashley Pimsner this happened about 10 years ago and no landlords lost any money.  It will work itself out and we worse case is Feb payment is delayed till the 15th. 

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