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Public Housing Authorities May Delay Payments To Section 8 Landlords In January
by Lynda Carson (tenantsrule [at] yahoo.com)
Saturday Dec 29th, 2018 9:04 PM
In HUD’s contingency plan it mentions that the ‘Housing Choice Voucher Program’ (Section 8 voucher program) is funded on a calendar year basis, and that the monthly payments for November and December of 2018 are scheduled to be made timely. However, the contingency plan does not clearly state where the funding for the Section 8 voucher program (Housing Choice Voucher Program) will come from for January of 2019, or beyond, if the federal government shutdown is still on-going during January 2019, or later.
Public Housing Authorities May Delay Payments To Section 8 Landlords In January

By Lynda Carson - December 29, 2018

Reportedly, if the partial government shutdown extends past January 1, 2019, the Altoona Housing Authority won’t have subsidies to pay 450 landlords in their Section 8 housing voucher program. This would place hundreds of Section 8 renters at risk of losing their housing.

With President Trump’s government shutdown being into its second week over funding for his racist border wall, some public housing authorities (PHAs) are already reporting that because of the government shutdown affecting the Department of Housing and Urban Development (HUD), they may have to delay their Section 8 housing payments to landlords in January. Additionally, the employees of some PHAs may not get paid until the government shutdown is over.

Presently over 420,000 federal workers are working without pay during Trump’s government shutdown, and making matters worse, in a kick to the gut of federal workers Trump has decided to take back a promised 1.9 percent pay increase from all federal workers.

In a statement from HUD on its Twitter account, it says, “Due to the government shutdown, we will not be posting any new updates or responding to questions until normal operations resume. Thank you for your patience and understanding.”

According to a statement in HUD’s 2018 contingency plan, “A government shutdown would deeply impact the millions of families in need assisted by HUD programs. The median income of a HUD-assisted household is just over $10,000 per year, well below the national average. Low-income families make up 72 percent of HUD-assisted households - and more than half of those receiving vouchers are elderly or persons with disabilities.”

In HUD’s contingency plan it also mentions that the ‘Housing Choice Voucher Program’ (Section 8 voucher program) is funded on a calendar year basis, and that the monthly payments for November and December of 2018 are scheduled to be made timely.

However, the contingency plan does not clearly state where the funding for the Section 8 voucher program (Housing Choice Voucher Program) will come from for January of 2019, or beyond, if the federal government shutdown is still on-going during January 2019, or later.

In a recent statement from HUD in its 2018 contingency plan to around 3,000 Public Housing Authorities (PHAs) that distribute funding for some of HUD’s housing assistance programs, “You will be able to draw down funds from LOCCS (Line of Credit Control System) for the purpose of accessing funds for public housing (operating subsidies and capital funds) and Indian housing that have already been obligated in the system and which can be drawn down without further action or review by HUD employees. However, funds that have not yet been obligated or that require HUD review will not be available. For the Housing Choice Voucher program, the October payments were disbursed, and are available to HCV participants. The Housing Choice Voucher Program is funded on a calendar year basis, and the monthly payments for November and December are scheduled to be made timely.”

January 1st is right around the corner, and President Trump warns that the government shutdown may last a very long time. This means that after January 1, 2019, PHAs lacking in reserves to fund their Section 8 housing programs, may have to delay their Housing Assistance Payments (HAP) to Section 8 housing landlords because HUD has only made their monthly payments to PHAs to last throughout December of 2018, not January of 2019.

HUD’s contingency plan does not clearly state where the funding for the Section 8 voucher program will come from for January of 2019, or beyond, if the federal government shutdown is still on-going during January 2019. This means that PHAs will be pressed to use their funding reserves if they have any to make their HAP payments to the Section 8 landlords. PHAs lacking in reserves may have to delay payments to Section 8 landlords.

Making matters worse, HUD wants to take the reserves from PHAs all across the nation and return the reserves to the Treasury Department. PHAs are presently in a huge battle with HUD in an effort to stop HUD from taking their reserves from them. There are around 3,000 PHAs in the United States, and its territories.

PHAs May Delay Payments To Section 8 Landlords

As a direct result of Trump’s government shutdown affecting HUD and its subsidized housing assistance programs, in Altoona, PA, the PHA will not be able to make the Housing Assistance Payments (HAP) to 450 landlords in the Section 8 voucher program (Housing Choice Voucher Program) in January of 2019. This would place hundreds of Section 8 voucher tenants at risk of losing their housing, higher rents, or eviction.

Reportedly, “If the partial government shutdown extends past Jan. 1, the Altoona Housing Authority won’t have subsidies to pay the 450 landlords of Section 8 housing properties in the city.

According to the report, "Altoona Housing Authority Executive Director Cheryl Johns said employees will continue to work and hope for the best"

“In the event we don’t receive our subsidy from the first of the year, we will still have to work,” she said. “People won’t get paid, but we have a responsibility to the residents in our program.”

"There’s a chance that the Department of Housing and Urban Development might release reserves to pay employees, but Johns said she was not certain."

"She added that employees would be paid retroactively when the shutdown ends and Congress passes a spending plan for HUD.”

Additionally, reportedly in New Brunswick, New Jersey, the government shutdown may result in the delay of paychecks to the employees of the New Brunswick Housing Authority (NBHA), and the housing authority is trying to minimize any impact on the residents in its city housing projects/programs. NBHA is funded with federal money for its $14 million budget. It has 18 full-time and 2 part-time employees, and operates four affordable and public housing projects, plus a Section 8 Housing Choice Voucher program with around 868 vouchers.

Delayed Payments To Landlords In HUD’s Housing Programs During 2013 Government Shutdown:

Below are a few examples of what was going on when the federal government was shutdown during October of 2013, and how it affected HUD’s subsidized housing programs.

On Wednesday Oct. 2, 2013, the Housing Authority of New Orleans (HANO) announced that their October HAP payment from HUD will not reach them until October 7th, meaning that all Section 8 landlords in New Orleans that have HAP payments directly deposited to their accounts should not receive payment until on or about October 7th. There were currently around 17,000 low-income families in the Section 8 voucher program in New Orleans, and around 8,000 landlords in the program at that time.

Short of funding for their housing programs in 2013, the Board of Commissioners for the Fresno Housing Authority authorized a line of credit that allowed the agency to continue in the event of a short term government shutdown. HUD asked the agency to provide temporary gap funding in the amount of $1.7 million in housing assistance payments to Section 8 landlords, during the first week of October 2013.

HAP payments to Section 8 landlords in Glendale, California, also may have been delayed during October 2013 for around 1,500 low-income Section 8 voucher holders, and a press release from the Guam Housing and Urban Renewal Authority announced that HUD had advised it that the October 2013 housing assistance payment to landlords would be delayed due to limited and late funding assignments.

During October 2013, a press release from the San Francisco Housing Authority stated that a prolonged government shutdown could affect the more than 31,000 families served by the San Francisco Housing Authority.

The Oakland Housing Authority (OHA) received written notice on September 30th, 2013, from HUD stating that the funding to it's Section 8 voucher program (Housing Choice Voucher Program) and it's public housing program will continue, allowing the OHA to conduct normal operations at least through mid-December of that year. That is unless circumstances change and HUD cuts off the federal funding to Oakland's housing assistance programs. There was no clear statement as to what would happen in January of 2014, if the government shutdown was still on-going. According to it's website at that time, it stated that the OHA owned, operated or administered subsidized rent payments for nearly 15,000 households, approximately 10% of Oakland's low-income families.

During the 2013 government shutdown, facing their Section 8 reserves to be depleted by the end of the year, a press release on October, 13, 2013, reveals that the Housing Authority of the City of Los Angeles (HACLA) urged lawmakers to end the government shutdown.

A year ago during anther government shutdown, in a statement from the National Association of Housing Redevelopment Officials (NAHRO), it said, “We strongly encourage NAHRO members to call their Representatives and their Senators, and to let them know that the government shutdown will jeopardize the rental payments and therefore the housing of the public housing and Section 8 Housing Choice Voucher residents we serve.”

The clock is ticking. Trump’s federal government shutdown places millions of low-income renters at riskin the Section 8 voucher program (a.k.a. Housing Choice Voucher program) if the government shutdown lasts very long, especially after December of 2018.

Lynda Carson may be reached at tenantsrule [at] yahoo.com

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Comments  (Hide Comments)

Update: From PHADA: Funding will be available in January

See email below from the Public Housing Authority Directors Association (PHADA).

(LC)

From: sembry [at] phada.org
To: tenantsrule [at] yahoo.com

Dec 31 at 6:31 AM

Ms. Carson,

First, thank you for writing about HCV funding which is a crucial issue. I read your recent article and wanted to pass you some up to date information regarding funding for the HCV program during the shutdown. Funding is available for January 2019 so there should be no lapse in payments to landlords or other vendors. Let me know if you have any additional questions.

https://phada.createsend1.com/t/ViewEmail/y/82F83E36594CEC8A

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Government Shutdown Not Expected to Impact Housing Programs in January

FOUR MINUTE READ

The partial government shutdown is not expected to have an impact on housing programs, at least in the short term. HUD-PIH staff informed PHADA last week they believe the Department has sufficient funding for programs through the early part of 2019. Dominique Blom, HUD’s Acting Assistant Secretary for PIH, said today that HCV and Operating Fund payments will definitely be made for January. She said that voucher deposits would be made January 2, adding, “With the government shutdown, the staff in the Financial Management Center in Kansas City and in our Field Offices are not working. As such, they are not returning calls/emails inquiring about the status of funds. I would appreciate if you could communicate with your members to let them know that January payments will be made.”

That is consistent with the message the Financial Management Division conveyed to HAs last week (see the first message below). Although that message covers public housing, we were informed voucher funding will be also available for January.

The other excerpt below is from HUD’s contingency plan in the event of a shutdown. It indicates a number of HUD’s IT systems will remain operable if there is a shutdown.

PHADA will continue to provide information on the shutdown as it is available.

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Message from the Financial Management Division

To PHA Executive Directors/Business Partners:

The Public Housing Operating Fund program has provided obligations for the months of January and February. These obligations are based on an initial estimate of 2019 eligibility and a 90% proration rate. HUD uses a conservative methodology for funding PHAs when using an estimate, and when funding is based upon a Continuing Resolution. Because Operating Subsidy funding is provided on a cumulative year to date basis, using a conservative methodology early in the year is intended to result in increasing funding amounts later in the year.

While HUD’s estimate is normally quite accurate on a portfolio level, on a project level it can vary widely from what actual eligibility winds up being. If a PHA considers the funding over the amount it should receive for this period, that amount of fund shall not be withdrawn from eLOCCS. The PH-Financial Management Division (FMD) will post a detailed explanation of the estimate methodology and obligation letters on the Operating Subsidy web page as soon as possible. The Operating Subsidy web page for 2019 is available here.

If you have questions regarding this communication, please contact your local HUD Field Office.

Happy Holidays from the HUD PH-Financial Management Division

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