× Expand AP Photo/Bloomington Herald-Times, Jeremy Hogan

In late January, Congress and the president agreed to reopen the government after an historic 35-day shutdown. As researchers who study housing, we breathed a sigh of relief. Although the two branches avoided a second impasse, we fear the damage that this constant brinkmanship may do to one of the nation's largest affordable housing programs.

Had the shutdown continued, federal funds that provide housing vouchers would have run out by March, a crisis that could have jeopardized the housing of over two million households. But even without a fresh interruption, the initial impasse damaged the housing voucher program in ways that may take years to fix. The issue, simply put, is this: landlords can no longer trust the federal government to uphold their side of the bargain by paying their portion of the rent.

For decades, the Housing Choice Voucher program, formerly known as “Section 8,” has offered poor families in cities across the country a chance for stable housing. Voucher recipients can theoretically use vouchers to rent any reasonably priced unit, paying 30 percent of their income while the Department of Housing and Urban Development (better known as HUD) makes up the difference. The program was designed to offer families help paying their rent and allow them to choose where to live.

But in order for this to work, landlords must agree to participate. Contrary to popular belief, about half of the units in the voucher program are owned by small landlords, who have only a handful of properties and generally have no capital reserves. When HUD doesn't pay its portion of the rent, they can't pay their mortgages.

Getting landlords to participate in the voucher program, particularly in neighborhoods with strong schools, low crime, and good jobs, has long been a struggle. And as housing costs rise across the country, the problem is only getting worse. In tight housing markets, over a third of households who receive a voucher are unable to find a qualified home with a willing landlord. After spending months, sometimes years, on a waiting list, they must forfeit the voucher unused and return to the endless cycle of housing insecurity endemic to the low-end market.

A lack of willing landlords also has profound implications for the ability of poor families to leverage the voucher for residential mobility. Our study found that the landlords most incentivized to participate were those in the highest poverty neighborhoods. In these neighborhoods, landlords believed that a voucher tenant would provide more reliable rent, compared to an unsubsidized tenant who be would paying out of pocket. This situation was reversed in low-poverty neighborhoods—whether traditionally so or recently gentrified—where landlords have little financial incentive to participate in the program.

In most cities, these higher-end landlords are legally allowed to reject otherwise qualified families simply on the basis of their paying with a voucher. Why, our landlords asked, should they go through the hassle of a government bureaucracy and an annual inspection when well-qualified unsubsidized tenants were lining up for their units?

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In recent years, HUD has funded two large-scale research projects to better understand this problem. The first, by the Urban Institute, showed that landlords in a range of cities refuse to accept vouchers to varying degrees. In the second study, our research team spoke directly to 160 landlords randomly selected in Baltimore, Cleveland, Dallas, and Washington, D.C., to learn why they did—and did not—participate.

Across all of our sites, the number one reason why landlords accept vouchers is that a significant portion of the rent they receive is guaranteed each month from HUD. Vouchers provide security to landlords who rent to poor tenants with sometimes volatile incomes.

Landlords had many suggestions for program improvement, but many were quick to remind us how much things had improved. In the days of paper checks and unreliable computers, monthly payments were often delayed. But those were the “bad old days.” All of the landlords we spoke to said that now they could depend on the money showing up in their account every month like clockwork. Tyrone, a property owner in Baltimore told us: “A lot of owners like voucher tenants because the rent is guaranteed. It's going to be in your account between the first and the fifth. You don't have to chase money.”

Thanks to last month's shutdown, this “guaranteed” rent seemed less and less guaranteed, damaging the one thing about the program that landlords universally applauded.

This will have serious repercussions. At the least, the program may lose landlords who conclude program to be unreliable. At worst, the federal government will have lost the trust of a great many more landlords who might have offered housing in new neighborhoods.

The timing could not have been worse. In 2018, HUD launched a national listening campaign to attract more landlords. While conservatives and liberals disagree about many details, the goal of making the program work better for both landlords and tenants proved remarkably bipartisan, a clear signal of progress. Then came the shutdown, which signaled to participating landlords that they cannot depend on HUD's portion of the rent no matter how well the program is administered. Landlords are now acutely aware of the possibility that the government may not pay.

This problem was created by Washington and it will be up the president and Congress to fix it.To protect housing vouchers in the future, lawmakers could do several things. First, they should reform the program's funding mechanism to ensure that public housing authorities have deeper reserves, sufficient to meet existing obligations to landlords. This fix would have limited budgetary consequences and could prove to be an invaluable tool for rebuilding trust. Landlords would be much more likely to stay in the program if they know they can count on being paid rent.

We must also maintain the momentum that existed prior to the shutdown. The voucher program is far from perfect, but it represents a chance at stability for over two million families. Without reforms, landlords will continue to exit the program as more qualified families complete for a shrinking share of reasonably priced housing.

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The most direct approach would be to make it illegal for landlords to reject otherwise qualified families solely on the basis of their being voucher recipients. Modeled off protections for sex, race, and disability, a national “source of income” protection law would prohibit landlords from rejecting families based on where their rent money comes from. Currently, such a law exists in growing number of local jurisdictions (including Washington, D.C.), but a piecemeal approach is unlikely to result in equitable outcomes nationally. A federal law, coupled with resources for enforcement, is long past due.

But accepting voucher families can have real costs for landlords that have nothing to do with the tenants themselves. Unlike most rental housing in the nation, voucher subsidized housing is inspected annually and landlords must enter into a contractual relationship with HUD that can impact their businesses. Which is one reason why the program suffers from a far larger problem. Landlords often respond to market forces and not to the needs of low-income tenants who have few housing options. Despite these subsidies, some landlords exit the program as neighborhoods gentrify, pushing out poor tenants in favor of well-heeled newcomers who can pay higher rents. Moreover, many units are ineligible for the program simply because their rents fall above what HUD is willing to subsidize, effectively excluding subsidized families from many portions of a metropolitan area.

Thus, in order for a federal source of income protection law to be truly effective, a number of important reforms are necessary to make the program more attractive for landlords. HUD is currently implementing changes to its rent limits, considering more predictable inspection processes, and examining how to reduce bureaucratic costs for landlords that are not associated with improved services. Each of these reforms has the potential to reduce the damage of the recent shutdown.

But critically, the country must exit the accelerating shutdown cycle. Many people have been affected. Most of them have spent the last three weeks picking up the pieces, while federal programs like the voucher program may suffer for much longer. This is almost unavoidable if the best Washington can ever manage are short-term deals every time there's a major political dispute over funding.

Millions of people depend on housing vouchers to keep roofs over their heads. Without a fleet of willing landlords who can trust the government to hold up its end of the deal, families across the country will be unable to use their vouchers, facing mounting housing burdens, high levels of eviction, and homelessness.