Some of the roughly 5 million families who receive rental assistance from the U.S. government could see sharp cuts to their benefits — and even the threat of eviction — unless lawmakers in Washington can craft a budget deal that fully funds key housing programs in the next nine days.
The looming cliff compounds what is already a frenetic, last-minute sprint on Capitol Hill, where lawmakers this week are racing to stave off a partial federal shutdown that could unleash its greatest havoc on low-income Americans least able to afford it.
Much of the uncertainty concerns the federal housing voucher program, which helps subsidize the poorest families’ monthly rents. Last year, the U.S. government provided more than $27 billion in these benefits, which are administered by local housing authorities and landlords — an amount that’s far less than what is needed annually to satisfy national demand.
If Congress fails to reach a deal by the Jan. 19 deadline, the Department of Housing and Urban Development would have no choice but to furlough staff members and cease some of its operations — potentially jeopardizing the voucher program if it takes many weeks to restore funding.
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Lawmakers have scrambled to avert such an outcome, but the compromise they envision still threatens significant cuts to housing assistance. Some estimates suggest an early deal between House Speaker Mike Johnson (R-La.) and Senate Majority Leader Charles E. Schumer (D-N.Y.) could eliminate about 80,000 vouchers, as federal aid fails to keep pace with inflation. Rental prices rose more than 6 percent in 2023, according to federal indicators released Thursday.
In a more devastating scenario, more than half a million families could lose housing benefits under current law, which forces automatic spending cuts across most of the government unless Congress intervenes before May 1. That would put many poor families at risk of homelessness if they cannot afford to pay rent on their own, according to HUD, which offered the new estimate this week.
The budget uncertainty reflects the high stakes for millions of cash-strapped Americans who rely on Washington to purchase food, obtain housing, attend college and receive medical care. The fate of their finances rests in the hands of lawmakers who repeatedly have brought the nation dangerously close to fiscal catastrophe over the past year.
“In ongoing conversations with Congress, the administration is pushing to ensure that under the current top-line framework, final appropriations include the necessary funding level for the housing choice voucher program so that no family that has a voucher loses access to it,” said a senior administration official, who spoke on the condition of anonymity to describe budget talks still underway.
For the moment, at least, the United States once again appears to be careening toward a crisis: Without a resolution in Congress, roughly one-fifth of the government would close after Jan. 19, jeopardizing a vast collection of federal nutrition, water, energy and transportation programs.
Food safety inspections are likely to cease, the Biden administration previously has warned, and some veterans could see delays or other disruptions to critical care services. Entire agencies, including the Department of Transportation, would have to furlough most of their workers, while requiring critical employees to report without pay. The rest of the federal government would stay open, but only until Feb. 2, when funding for those remaining agencies and programs would expire unless Congress acts.
This week, congressional leaders signaled they may have to adopt another short-term spending measure, known as a continuing resolution, to buy lawmakers more time to enact a longer-term deal. Conservatives have bristled at the notion, while the White House has faulted Republicans for leveraging another fiscal deadline to push spending cuts and other conservative policies, including tougher border enforcement.
Among the affected agencies would be HUD, which would send home most of its workforce if Congress fails to strike a deal. With each passing day, a shutdown would cut deeper into the cash reserves that fund vouchers and other housing support, leaving vouchers and other benefit programs “at risk of running out of funding during a lapse period,” according to HUD, which first published its plans for an interruption in appropriations in September.
In a statement, the agency said it believes rental assistance programs could continue with existing funding into March. But the threat of evictions would loom in the event of a prolonged interruption in funding: A 35-day shutdown under President Donald Trump starting in December 2018, for example, left HUD unable to renew some of the rental contracts with landlords that help subsidize lower-income housing. Those property owners then started “threatening to evict tenants,” recalled Sara Saadian, the senior vice president for policy and field organizing at the National Low Income Housing Coalition, which advocates such funds.
“It’s something we could see again,” she said in response to the current impasse. “There was definitely a lot of chaos and concern.”
Under the voucher program, HUD advances money to public housing authorities around the country, which award the aid based on a family’s financial need, reserving help for the poorest Americans. The demand typically far surpasses the available funding and housing stock, so the program only serves about 1 in 4 eligible households, according to the nonpartisan Congressional Research Service.
The vouchers belong to a broader suite of rental assistance programs that make up most of HUD’s budget, which expanded dramatically during the pandemic to ensure cash-starved Americans did not face eviction. Homelessness has soared since those funds ran out, the Biden administration reported last month, and the government found more than 650,000 people experienced homelessness on a single night in January 2023 — marking a 12 percent increase from the same period in 2022.
To avert a major disruption to HUD and other agencies, housing advocates have pined for more money, seeking a spending boost at a time when hard-right Republicans are demanding cuts, especially to anti-poverty programs. The powerful House Freedom Caucus, a bloc of roughly three dozen ultraconservative lawmakers, even has suggested it could object to any bipartisan deal.
“It’s even worse than we thought,” the group said in a statement shortly after congressional leaders announced the spending agreement. “This is total failure.”
Under one scenario, lawmakers could choose to adopt another measure that extends government funding at its existing levels. If they do, though, HUD would not have the funds to sustain all existing housing benefits, because the costs of rent has increased nationally. The agency said it may also struggle to satisfy contracts it previously signed with property owners, leaving the government unable to pay rents on behalf of nearly 1 million tenants in need, the agency said.
“It sends a signal that the federal government, and Congress, isn’t serious about helping people meet their basic needs,” said Peggy Bailey, the vice president for housing and income security at the left-leaning Center on Budget and Policy Priorities, which advocates higher housing spending.
The loss of funding would put added stress on local public housing agencies, said Leroy Moore, the chief operating officer at the Tampa Housing Authority. With rents in parts of his city more than double what they were three years ago, he said the agency already has a wait list exceeding 10,000 residents — and, often, it must keep its queue closed because there’s no immediate way to serve those in need.
Without more federal funding, Moore said Tampa would have no choice but to reduce vouchers over the next year through attrition, unable to redirect aid to the next family in line because there just isn’t enough money to offer help.
“The demand out there is at an all-time high for housing,” he said.
Anticipating a funding crunch, Biden in the spring called on Congress to approve more than $73 billion for HUD, with nearly $33 billion for vouchers. Testifying at a hearing in April, HUD Secretary Marcia L. Fudge told lawmakers that the request would sustain the program amid high inflation and allow 50,000 more individuals and families to get assistance.
“How can a person hold down a job or take care of their health or children if they do not have a bed, shower or stove?” she asked.
Congress at one point last year seemed willing to allocate nearly the full amount Biden had requested for housing vouchers. But House GOP leaders tried to couple their modest increase with a significant reduction in other HUD funding. A more generous Senate bill, meanwhile, came closer to Biden’s request, but still may have resulted in about 80,000 fewer vouchers because of inflation, according to Sonya Acosta, a senior policy analyst at CBPP.
On Sunday, Johnson and Schumer announced an early deal that would set overall federal spending this fiscal year at $1.6 trillion, paving the way for housing funds that mimic the Senate approach. If lawmakers fail to enact that agreement, however, they would trigger steep automatic cuts to HUD and other agencies under a law that Congress enacted last year.
The complicated system, known as sequestration, would slash all federal spending unless Congress adopts longer-term legislation before May 1. Depending on how it is calculated, the cuts could eliminate about 9 percent of some agencies’ funds, according to an analysis released last week by the nonpartisan Congressional Budget Office.
“A 9 percent cut means you’re kicking people out of housing,” said Sunia Zaterman, the executive director of the Council of Large Public Housing Authorities, which advocates on behalf of the local organizations that distribute HUD aid. “It means you’ve got to terminate vouchers, and you’re not making payments to landlords.”
That might mean more than half a million families will be forced to pay their full rent bills without federal subsidies by the spring, according to a HUD spokesperson, adding that the agency expects that many would face eviction. The agency would also have to curtail a wide array of other programs, including aid that helps communities address homelessness, repair aging facilities and remove lead contamination from public housing.
Sounding the alarm about the issue in December, Sen. Patty Murray (D-Wash.), the chairwoman of the Senate Appropriations Committee, said that a cut of that size could have a dramatic effect on families, totaling about a $5.5 billion cut to HUD rental and homelessness assistance programs.
By her count, the loss of funds would put about 700,000 households at risk of eviction or homelessness, due to the loss of housing vouchers and other programs. In a statement, Murray stressed it is “critical we strengthen federal efforts to help people keep a roof over their head and afford a place to call home.”
