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The government shuts down…what does it mean for housing?

As of this writing, the federal government has shut down. After weeks of back and forth, Congress remained deadlocked and failed to reach a budget deal that would keep the government open for business. As the fiscal year ended, the Senate and the House could not reach agreement on the proposed continuing resolution (CR). Just before midnight the Office of Management and Budget (OMB) instructed federal agencies to begin executing plans for the shutdown.

The blockage in Congress is centered on controversial amendments that would block or delay implementation of the Affordable Care Act (ACA). Over the last week Majority Leader Senator Harry Reid (D-Nev.) has been adamant that Democrats will only accept a “clean” CR that would keep the government funded at the sequestration level of $986 billion. President Obama has been similarly adamant that he would not negotiate on either the CR or the debt ceiling under threat of government shutdown. Due to the stalemate, the government shut down for the first time in 17 years. If legislators act quickly (as they did to make sure active-duty military personnel would be paid), they can end the shutdown with a clean CR before much more damage is done. Let’s hope Congress can remember all the people who rely on a functioning federal government.

What does a government shutdown mean for housing programs? Last week HUD released a contingency plan outlining a department-wide strategy in the event of a lapse in appropriations related to shutdown and offering detailed guidance on all HUD programs. In general, housing programs that still have funds from past appropriations can continue functioning, although there will be very few HUD personnel available to manage the programs. In many ways housing programs are better off than some, because HUD moves funds out to program participants in batches, but we expect to see disruptions increase if and as the shutdown continues, particularly in programs already weakened by sequestration cuts.

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