One month into the shutdown, with the Department of Housing and Urban Development hit hard, subsidies for low-income renters have stopped. The nonprofit groups that help them are scrambling to avoid their own layoffs.
WASHINGTON — Ramona Wormley-Mitsis got welcome news in December: After years of waiting, the federal government had approved a subsidy that allowed her to rent a three-bedroom house, bracketed by a white picket fence to keep her two autistic sons from bolting into traffic.
A few days later, the dream was deferred. The Department of Housing and Urban Development — one of the federal agencies hit hardest by the shutdown — would not be able to pay her new landlord until the government reopened.
“It is my dream home. It’s like my last stop; it’s like my last chance — you know?” said Wormley-Mitsis, 39, who lives in Fall River, Massachusetts, and is staying with relatives until the check clears. “We drive by that house all the time. It’s torture. Waiting, waiting, waiting.”
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One month after the government shutdown began, its effects have begun to hurt some of the most vulnerable Americans: not just homeless people, but also those who are one crisis away from the streets. And nonprofit groups dedicated to helping low-income renters are already scrambling to survive without the lifeblood payments from HUD that began being cut off Jan. 1.
That has left a small but growing number of tenants, like Wormley-Mitsis, in limbo. Landlords, especially smaller management companies operating on narrow margins, have begun pressuring poor, disabled and elderly tenants who cannot afford to make up the difference.
On Friday afternoon, a TriState Management employee in Newton, Arkansas, taped notices on the doors of 43 federally subsidized tenants, demanding that they cover the gap between what they typically pay and the full rent.
“As of Feb. 1, 2019, all tenants will be responsible for full basic rent,” the letter said. “We will extend the due date for the rent to the 20th of the month. This will remain in effect until the government opens up.”
Amanda Neeley’s heart sank. The three-bedroom home she shares with her daughter and granddaughter goes for a monthly rate of $505, of which she is required to pay $110. The rest — which her landlord now wants her to pay — is supposed to be picked up by the federal government under a program intended to help out the rural poor.
“This is putting a hurt on all of us. Everything was going along normal until they decided to shut down the government,” said Neeley, 48, who gets by on a small disability check. “I can’t pay that much; it is beyond my means. It is not fair.”
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A TriState Management employee hung up the phone when asked about the policy Friday. But lawyers for the poor say that renters can fight evictions in court and many organizations, including the Fair Housing Action Center of Maryland, have begun distributing flyers informing tenants of their rights under local law.
A week earlier, a property manager at another subsidized low-income housing complex in rural Arkansas, run by the Agriculture Department, sent a similar notice to tenants. “Until the government opens again, you are responsible for ALL of your rental amount,” the letter said.
The letter was rescinded when federal officials vowed to cover the payments.
Most other social-safety-net programs are facing a similar, if less imminent, emergency. The Department of Agriculture has announced that funding for the Supplemental Nutrition Assistance Program, which provides food stamps and other aid to almost 40 million poor and working-class Americans, will run out by March 1, and other nutrition programs are facing the same fate.
The Department of Health and Human Services was largely exempt from the showdown and Medicaid and Medicare are not affected by the funding lapse. But Congress failed to reauthorize one of its main programs, the $16.5 billion Temporary Assistance for Needy Families, which provides states with block grants for a range of services, cash welfare and child care. States are likely to pick up the tab for most programs, but a protracted shutdown lasting into the spring could result in cutbacks, according to analysts.
While the housing crisis is just starting to hit individual tenants, it has already wreaked havoc on organizations responsible for housing homeless people and providing support services to veterans, people with disabilities and victims of domestic abuse.
The funding lapse is being felt most acutely by providers who owe their survival to the month-to-month cash flow provided by the annual $2.8 billion federal Homeless Assistance Grant program.
Susie Sinclair-Smith has helped build a network to help homeless people in Maryland’s high-rent Washington suburbs, an impressive but precarious Jenga tower of programs dependent on $3 million in annual federal funding.
“The crisis has arrived,” said Sinclair-Smith, executive director of the Montgomery County Coalition for the Homeless. The last payment the group received from HUD was a $250,000 reimbursement for its December expenses, which arrived at the start of the year.
The coalition is now preparing to tap its modest reserve fund of just over $200,000 that was intended to cover unintended emergencies, like floods or the loss of benefits by individual clients. It will be used to bridge the loss of federal cash to cover rent, the salaries of case managers who provide support to disabled and elderly clients, maintenance costs, and other expenses for the 250 households of formerly homeless people.
“We can get by for a while, but what happens if one of our buildings gets hit by a flood?” Sinclair-Smith said.
In Boston, the Pine Street Inn, the region’s largest provider of homeless housing, is exploring its financial options to counter the loss of a major federal contract Feb. 1. It bankrolls one of the provider’s most important units, a seven-member outreach team that is responsible for finding affordable housing for homeless people, said Lyndia Downie, the group’s president.
In Kokomo, Indiana, shelters that serve homeless veterans and victims of domestic violence are struggling to remain open without the monthly subsidies. Organizations in Kentucky, Texas, Arkansas, California and New Jersey face a mass funding halt at the end of the month.
“If the shutdown continues, all these organizations will be left having to consider a spectrum of bad to terrible options, including staff layoffs and, in the worst-case scenario, evictions,” said Diane Yentel, president of the National Low Income Housing Coalition, a Washington-based advocacy organization.
HUD, which funds most of these programs, has been hit not only by the furloughing of 95 percent of its workforce, but also by a recent exodus of top staff members. Just days before the shutdown began, the department’s deputy secretary, Pam Patenaude, resigned in what one person with knowledge of the situation described as a forced exit after clashing with housing Secretary Ben Carson.
Critics said HUD officials inadequately planned for an extended shutdown, failing to recertify more than 1,000 contracts with landlords who provided subsidized housing.
“I am thoroughly disgusted with the Department of Housing and Urban Development’s failure to follow its own contingency plan” for the shutdown, Rep. Maxine Waters, D-Calif., chairwoman of the House Financial Services Committee, wrote in a letter to Carson on Friday.
Waters was particularly critical of Carson for exposing homeless programs, including those providing housing for victims of domestic violence, to financial harm.
A spokesman for Carson did not immediately respond to a request for comment.
The shutdown has stopped vital funding allocations for public housing repairs, new housing voucher applications and even the processing of post-disaster housing requests from Puerto Rico and several hurricane-ravaged states.
HUD officials often play down concerns about the impact of funding decisions on poor people. But privately, they too are growing increasingly concerned that some tenants and local groups that rely on funding from the department could be stranded if the shutdown lasts even a few more weeks.
Smaller organizations, especially those that serve rural areas, are particularly vulnerable because they often lack endowments, cash reserves or lines of credit that their big-city counterparts can tap.
“We are providing services without getting paid for those services, and eventually that is going to catch up with us,” said Adrienne Bush, executive director of the Homeless and Housing Coalition of Kentucky, which relies on a $1 million federal grant that covers about half its expenses each year.
Bush’s group has not received its January payments, and still has not gotten some of the money it was owed from providing services in 2018. To cover the gap, she has begun to tap a $75,000 cash reserve.
Bush will soon have to stop paying some landlords, which could lead to evictions. To minimize the fallout, she has started to compile a list of owners willing to forgo payments for an extended period.
She sent a letter pleading for help to Sen. Mitch McConnell, R-Ky., the majority leader. Bush said the shutdown was putting “people’s lives at risk.”
She received an eight-word response and no commitment to help.
“I’ll be sure to pass on your concerns,” Tiffany Ge, McConnell’s legal counsel, replied in an email to Bush.
A spokesman for McConnell said the senator would send a written response to Bush’s group and champion Trump’s latest offer to reopen the government — giving temporary protections to roughly 700,000 young immigrants in the country illegally in exchange for $5.7 billion for a border wall.
House Democrats have already rejected the president’s proposal.