SHUTDOWN

Let's face it, for most Americans the government shutdown means absolutely nothing. In fact it is quite scary how little shutdown means to most of us (that should certainly have us question if we actually need all this government. I say we should throw a government packing party - minimalist style: any agency that we didn't need during the last three weeks, we just get rid of!*)

But... for those of us in affordable housing, the shutdown may have a serious impact**. In this post I will share the ways it has impacted some of ARO's clients.

REAC

So HUD did a bit of a 180 on this one. First it seemed that there would be no REAC inspections (hooray!) as was the case in previous shutdowns, but then they said that inspectors could still do their inspections (I think the inspectors will not be getting paid though). A client had an inspection during the shutdown but the score has not posted to PASS. There is an additional problem that when the inspector arrived to do the REAC there was no one at HUD available to help through the glitches that often occur at the beginning of the inspection (in this case his system had the incorrect number of units for our building). So the inspector proceeded with the inspection but who knows what will happen once HUD opens (if it ever does...) and their software attempts to reconcile with the inspection software. May G-d help us all!

CONTRACT RENEWALS

This is actually a pretty serious one, although I don't think it is quite as serious as some in the media make it out to be (here and here - NBC seem to think that all of HUD's problems started on January 20, 2017 - see this article that anyone in the business for more than a week will tell you is absurd).

The problem is that if a contract is not renewed then the funding is not appropriated and so owners will not get their subsidy payments. I say this is not as serious as the news makes it out to be because most responsible owners should be able to wait this thing out. But it is kinda frustrating and can be a little nerve racking.

In one client's case, we actually had a contract approved prior to the shutdown, but since the contract was effective retroactive the January payment was quite large and needed a special approval by HUD. This of course I can not hope to get during the shutdown.

NEW APPROVALS

Just before the shutdown a client of ARO went under contract on a new Section 8 property. Being as most of HUD is not open, there is little chance that it will get HUD approval until the government reopens. Even after it reopens I am sure there will be such chaos and a backlog that this whole deal with certainly stretch on far longer than we anticipated.

As for the majority of our clients, things are progressing as usual. No tenants will get evicted and we are confident that when the government reopens, whenever that is, that any issues will get resolved and any delayed payments will be paid retroactive.

If any further issues come up, we will continue to update this post.

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*Let me clear that I have real sympathy for those who are effected or are out of work due to this shutdown.

**Why a quasi libertarian like me works in the affordable housing industry, is a story for a different time!