Prak Property Management Inc. has been digging into savings to keep some of its low-income properties in Austin running.
“It’s like a savings account that every month we are required to put a certain amount of dollars into for things like roofs, appliances, that sort of thing,” said Brad Prak, a management agent with the Texas-based company.
Two of the housing complexes Prak manages had their government contracts expire at the end of 2018. Without a new agreement in place – or Department of Housing and Urban Development (HUD) employees to sign off on a contract – these properties are not receiving the subsidies they rely on to offer affordable rents to low-income families.
“We hope [the shutdown] ends soon,” Prak said.
National low-income housing advocates have been sounding the alarm that the partial government shutdown, which is now the longest in U.S. history, could lead to evictions for thousands of tenants.
According to HUD records and conversations with property managers, at least three buildings in Austin housing roughly 170 tenants are functioning without federal funding because their contracts could not be renewed.
Shoshana Krieger, a lawyer with Texas Rio Grande Legal Aid, said tenants here haven't reported any impact on their living conditions yet, but that doesn’t mean they’re not stressed.
“Tenants that we’ve spoken to are understandably concerned about their housing stability,” she said.
Property companies like the one Prak works for said they’ve been able to pull from savings, but if the shutdown continues that could change.
“If we run out of money or this shutdown proceeds longer than [a couple of months], things might get more challenging,” he said.
People who receive housing choice vouchers, commonly known as Section 8 vouchers, could be affected more immediately. Low-income families in the program pay only 30 percent of their income in rent to private landlords; federal subsidies make up the rest. In Austin, roughly 5,200 families use vouchers.
The Housing Authority of the City of Austin, or HACA, said if the shutdown continues, the federal funding they use to subsidize these rents will run out.
“Fortunately, we do have HUD funding that is going to be available through the end of February,” said Sylvia Blanco, executive vice president of HACA. “But behind that,” she laughed, nervously, “we will be in some dire straits.”
Blanco said the housing authority has not faced this issue in the past.
“We’ve not been in a position where we’ve either had to perform layoffs or had to turn away residents needing to cover their rental payments,” she said. “This would be unprecedented.”
Krieger said even if the shutdown ends soon and housing providers ride out the loss of subsidies, the experience could make private landlords less likely to take part in federal housing programs.
“One of the historic benefits of these programs for landlords has been that there’s a guaranteed funding stream to the property,” Krieger said. “That a certain amount of rents are guaranteed to be paid and this undermines that proposition.”