U.S. Housing Dept. Takes Hardest Shutdown Hit of All

If ever there was a time to have a fully functional U.S. Department of Housing and Urban Development it is now in the aftermath of the housing market crash, which began in 2007 and has yet to recover whole. But today, on the eleventh day of the government shutdown, HUD has definitely suffered the hardest blow: 96 percent of their staff, or 8,372 out of 8,709 people, are out of work right now. HUD is the agency that chiefly handles public housing for low-income families and housing discrimination complaints.

But those two areas are in jeopardy due to the furloughs. The Office of Public and Indian Housing had 1,401 people working on providing affordable housing for low-income families and disabled individuals. Now they have three (as of September 27 furlough forecasts; see chart). The Office of Fair Housing, which handles complaints when people are denied housing on account of race, family status or disability, was also severely cut apart. Normally operating with 548 people on staff, they are now down to two. This won't impact funding for operating public housing complexes, and Section 8 rental assistance is still intact, for now. According to HUD's shutdown "contingency plan" Section 8 funds are only available through December. Funding for low-income rental housing and assistance may be in danger by the end of October.

Housing vouchers in general took a huge hit this year, especially after the last sequestration budget cuts on March 1, which may lead to upwards of 140,000 people going without vouchers by 2014 according to the Center on Budget and Policy Priorities.

Beyond that, the Office of Community Planning and Development, though down to just 13 people from 749, will continue to distribute community development block grants (CDBGs), which cities and nonprofits use often to build affordable housing. Those displaced by Hurricane Sandy will be relieved to know that HUD will continue to administer emergency disaster recovery assistance funds. Meanwhile, assistance for the homeless and people living with AIDS will continue. But all of that funding faces insecurity if the shutdown lasts for weeks or months.

Over at the National Housing Institute's blog Shelterforce, they conclude that "it is clear that affordable rental housing receives the short end of the stick," and lists the following foreseeable problems:

  • Existing project-based Section 8 contracts may expire without renewal;
  • Multifamily projects under construction may have funding stall, or may be allowed to draw down funds without required quality inspections;
  • Voucher holders may lose their homes if their landlords do not receive the contracted supplemental rent payments from HUD;
  • Some local public housing authorities may run out of funds at the end of the month.

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