By Raquel Paulino, HousingLink Training and Technical Assistance Manager
In December 2018 no one imagined that the government shutdown would last over a month, but most importantly that it would seriously impact both thousands of furloughed federal employees, contract workers and vulnerable populations receiving federal benefits. Federal benefits such as SNAP (food stamps) and certain subsidized housing programs for the low-income like the New York City Housing Authority (NYCHA) and Section 8 Project based rental assistance were negatively affected. With contracts expiring and no funding established for the year, many tenants (including the lowest paid furloughed federal employees and contract workers) were at imminent risk of eviction.
Due to lack of staffing at the Department of Housing and Urban Development (HUD) during the shutdown, approvals for manual payments for public housing’s capital fund that pay for critical repairs were not completed. In addition, payments for public housing’s operating fund which covers public housing maintenance, processing of tenant applications, and preparing apartments for occupancy among other essentials was only funded until the end of February. (Rights of Federally-Assisted Residents during the Government Shutdown, Page 5. National Housing law Project, January 23, 2019.) Tenants receiving Section 8 rental assistance were imminently at risk of eviction when HUD contracts with private landlords expired. (Impacts of Government Shutdown on Affordable Housing Programs, Page 1. Campaign for Housing and Community Development Funding, January 24, 2019.) In response, HUD advised many landlords in receipt of government payments to use money from their reserves to cover any expenses.
As a result, the shutdown exacerbated source of income discrimination, a prevalent problem in New York City and other areas. Source of income discrimination occurs when a landlord refuses to rent to a household that has a rental subsidy/housing voucher. In some parts of the country, this uncertainty around receiving Section 8 payments has caused some landlords to no longer consider accepting Section 8, refuse to renew leases and request tenants receiving Section 8 to leave their apartments once their leases ended. (‘It’s like the real-life Hunger Games in America:’ Shutdown threatens HUD’s protections for vulnerable, The Washington Post, January 24, 2019.) Others were told that starting February 1, they would need to cover the whole portion of the rent until the government re-opened. (Shutdown’s Pain Cuts Deep for the Homeless and Other Vulnerable Americans, The New York Times, January 21, 2019.) (New York City’s rental vouchers such as CityFHEPS and FHEPS A and B were not affected by the government shutdown.)
Section 8 has long been regarded as a stable source of income by many low-income residents because it is federally funded, but the shutdown has now caused many to question its stability. Low-income households now question whether they can afford rent with this voucher or other federally funded voucher.
Housing is considered affordable when no tenant is paying more than 30% of their annual income on rent, however, all too often low-income tenants pay far more than that for their rent. While government rental subsidies ease rent burden, the recent shutdown is an example of why all individuals and families should prepare for any possible financial setbacks.
Ultimately, income is the determining factor when it comes to how much a person can save. Low-income Americans earning $25,000 or less are most likely to only have $500 in savings. (What is the Average Savings Account Balance?, SmartAsset, November 20, 2018.) In 2017, four out of ten Americans were not able to pay $400 if an unexpected expense occurred. (Report on the Economic Well-being of Households in 2017, May 2018, Page 2. Board of Governors of the Federal Reserve.) For this reason, it is recommended that tenants receiving government rental assistance try to assess their current and long-term financial health.
A few things tenants can start to work on are:
- Making savings a habit – Open a savings account and set an auto-payment every month.
- Increasing their credit score – Work with a financial counselor to look through your credit report and identify any accounts that you need to fix.
- Organize in their community – Join a tenant coalition to fight the continuing increases on rent. Help keep the housing stock in your area.
New York City residents can call 311 to connect with a free financial counselor: Ask about for a location of a NYC Office of Financial Empowerment Center or click here for information and locations.
Survivors of domestic violence that are clients at a NYC Family Justice Centers can connect with a financial counselor there.