Section 8 Payment Delay Leaves Landlords With $700M Shortfall

UPDATE, DEC. 8, 12:35 P.M. ET: Section 8 funds for November were reportedly released to housing authorities over the weekend.

Thousands of affordable housing operators didn't get paid by the government on time this month. 

Some funds earmarked for Section 8 vouchers haven’t been distributed by the federal government to hundreds of local housing authorities, and the Department of Housing and Urban Development has notified the agencies that the payments will be delayed. 

More than 500 public housing authorities have a shortfall for December payments that total between $700M and $800M, an industry representative familiar with the details of the program told Bisnow.  

A HUD spokesperson said the missed payments were caused by complications associated with the government shutdown, which was the longest in U.S. history at 43 days and ended in the middle of November.

“Democrats shut the government down for more than 40 days. As HUD warned from the beginning, this careless decision resulted in real-world consequences for vulnerable Americans. HUD is working to make these awards to PHAs to ensure no disruption in program services,” the spokesperson said in a statement to Bisnow. 

HUD notified public housing agency association groups about the funding gap during a conference call Monday, said Tushar Gurjal, senior policy manager for the National Association of Housing and Redevelopment Officials.

Public housing authorities in Georgia, Boston, New York City and Boca Raton, Florida, are among the agencies informing landlords that payments will be delayed. 

The funding delay impacts a portion of the voucher program, and housing authorities still received some December disbursements from the federal government. 

HUD released some funding for the Housing Choice Voucher but failed to fully cover a large share of supplemental subsidies that are part of the program. The agency delayed so-called shortfall payments, additional funds paid to housing authorities to cover gaps when standard voucher allocations fall short of landlords’ contracted rent payments.

“There are several hundred PHAs experiencing shortfall out of approximately 2,000 PHAs that run the HCV program. So it is a plurality, not a majority, of PHAs that may receive these shortfall payments from HUD later,” Gurjal said.

The Houston Housing Authority doesn’t rely on shortfall payments and received its full funding on Monday, a spokesperson for the agency said. 

“It is our understanding this is impacting only those agencies that have shortfalls,” the spokesperson said.

The New York City Housing Authority and other housing agencies said they expect the payments to come in the next week. 

“Following notice from HUD that payments to Section 8 landlords would be delayed this month, NYCHA is assessing interim options and will distribute funding as soon as it becomes available from HUD,” NYCHA, the largest local housing authority in the country, said in a statement. 

The Georgia Department of Community Affairs said housing authorities in the state were not only missing some payments for December but also had yet to be fully reimbursed for November. The public notice includes a reminder to landlords that tenants can’t be held responsible for the missing federal payments. 

The Boston Housing Authority notified roughly 6,000 landlords that it had yet to receive its December outlay from the federal government, The Boston Globe reported.

BHA expected roughly $40M from HUD to be paid on Dec. 1, but the authority said in a statement on its website that it anticipates the payments “may not be disbursed until approximately mid-month.”

It plans to tap into $10M it has on hand to make partial payments, and landlords will receive roughly a quarter of the total subsidies that HUD supports. 

“We are hopeful that HUD will approve shortfall payments at the end of this week, and funds will become available next week, but we have not yet had formal confirmation of the timeline,” the BHA said. 

The Boca Raton Housing Authority said in a statement on its website that landlords participating in the HCV program should expect payment delays.

“According to HUD, shortfall payments, federal funds issued to housing agencies facing temporary budget deficits, will not be distributed on the usual schedule this month,” the authority said. “These payments play a critical role in helping local housing authorities meet their monthly obligations to landlords.”

The payment delay come as President Donald Trump’s administration is remaking the government’s housing policy. Last month, HUD revealed changes to its $3.5B in funding meant to fight homelessness that would shift funds away from permanent housing solutions and into programs focused on short-term housing, mental health and addiction treatment, and projects aimed at clearing homeless encampments.

UPDATE, DEC. 3, 3:20 P.M. ET: This story has been updated to include a statement from HUD. 

UPDATE, DEC. 3, 6:06 P.M. ET: This story has been updated to reflect a higher floor for the amount of payments delayed.