Prak Property Management Inc. has been digging into savings to keep some of its low-income properties in Austin running.
鈥淚t鈥檚 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,鈥� 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 鈥� or Department of Housing and Urban Development (HUD) employees to sign off on a contract 鈥� these properties are not receiving the subsidies they rely on to offer affordable rents to low-income families.
鈥淲e hope [the shutdown] ends soon,鈥� Prak said.
National low-income housing advocates have been 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鈥檛 mean they鈥檙e not stressed.
鈥淭enants that we鈥檝e spoken to are understandably concerned about their housing stability,鈥� she said.
Property companies like the one Prak works for said they鈥檝e been able to pull from savings, but if the shutdown continues that could change.
鈥淚f we run out of money or this shutdown proceeds longer than [a couple of months], things might get more challenging,鈥� 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.
鈥淔ortunately, we do have HUD funding that is going to be available through the end of February,鈥� said Sylvia Blanco, executive vice president of HACA. 鈥淏ut behind that,鈥� she laughed, nervously, 鈥渨e will be in some dire straits.鈥�
Blanco said the housing authority has not faced this issue in the past.
鈥淲e鈥檝e not been in a position where we鈥檝e either had to perform layoffs or had to turn away residents needing to cover their rental payments,鈥� she said. 鈥淭his would be unprecedented.鈥�
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.
鈥淥ne of the historic benefits of these programs for landlords has been that there鈥檚 a guaranteed funding stream to the property,鈥� Krieger said. 鈥淭hat a certain amount of rents are guaranteed to be paid and this undermines that proposition.鈥�
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