As we enter the third week of the partial government shutdown, the impact is beginning to affect more than just the unfortunate federal workers who are not being paid. Some of America’s poorest families may soon be hit by the inability of our leaders to keep the government running.
The Department of Housing and Urban Development (HUD) is one of the seven agencies most directly affected by the shutdown. Since December 22, the vast majority of federal housing employees have been forced to stay home without pay, and they are prohibited from doing any work – including responding to emails. The impact is the same for the Rural Housing Service, which oversees the Section 515 program.
While Section 8 assistance payments are being made at this time, HUD officials have stated that these payments could be suspended if the shutdown drags into February.
About 95% of HUD’s 7,500 employees have been furloughed without pay, including all those who provide assistance to property owners.
If the shutdown is resolved this month, the financial impact on owners of Section 8 properties and those with voucher residents should be minimal. However, at this point, there is no agreement in sight. I recommend that affected owners think about delaying any expenditures that can be put off and keep project operating accounts as funded as possible. Don’t make any purchases that can wait and delay until the last minute any payments that have deadlines. At this point, cash flow is critical, so be aggressive in collections and passive with regard to expenditures – and we’ll all hope for the best.