Hundreds of low-income renters could be evicted if the federal government shutdown continues.
Federal contracts with private landlords who own about 1,150 government-funded properties have already expired due to the shutdown, and another 500 could expire this month and an additional 550 in February if the government remains shut down, reported NBC News.
The Department of Housing and Urban Development, which is overseen by secretary Ben Carson, has told landlords participating in the Section 8 program that they can use their cash reserves, which are typically required by mortgage lenders, to cover any shortfalls.
HUD has historically reimbursed owners after previous shutdowns to prevent evictions, but housing advocates and landlords had expected the federal agency to renew the contracts that have already expired.
“It’s a mess,” said Ellen Lurie Hoffman, federal policy director for the National Housing Trust, which owns Section 8 properties. “The pain is coming a lot earlier than we thought.”
Hoffman told NBC News that HUD officials had previously assured her organization that contracts for December and January would be renewed, but they have not been.
“It’s confusing to me why HUD wouldn’t have prioritized that and assigned staff to make sure this wouldn’t happen," Hoffman said. "It’s a huge number of contracts and properties and residents."
Landlords with limited reserves could delay critical repairs, take out additional financing, raise rents or even evict tenants -- especially if the shutdown continues.
HUD did not respond to questions about the number of families affected by the expiring contracts or say why the administration had not renewed the contracts before they ended.
A department spokesman said landlords with unexpired Section 8 contracts should continue to receive payments this month and next month, but affordable housing real estate companies are already reporting problems with contracts that remain in place until February.