Federal Freeze Confusion Hits Section 8 Landlords’ Wallets

Donald Trump’s proposed federal funding freeze was on the table for mere hours, but a week later, it’s still causing chaos.

New York City officials delayed payments to thousands of landlords on Monday whose tenants use Section 8 housing vouchers, Gothamist reported. At least a dozen property owners with hundreds of units contacted the likes of New York Apartment Association senior vice president Jay Martin as the day went on.

The program, which is administered by the New York City Housing Authority, is backed by $2 billion annually from the federal Department of Housing and Urban Development. Private landlords receive their funds at the beginning of the month, but awoke Monday to a dearth of expected deposits.

A NYCHA spokesperson said the delays were due to confusion from the Trump administration’s proposal for federal agencies to pause all payments. The spokesperson added that NYCHA had received the funds as of Monday morning and started processing payments, which were expected to hit bank accounts within one business day.

“One day is significant,” said Martin. “We really need to make sure the government and NYCHA make sure this doesn’t happen again.”

The proposed freeze on federal funding wouldn’t have applied to Section 8 vouchers in the first place, as payments for individuals — such as rental assistance — weren’t covered in the order. There was widespread confusion over what the Trump administration was tackling with its order, however, quickly leading to it being rescinded.

The impact of the delay could extend beyond a temporary blip in the system, though. One real estate agent heard a landlord say they would be willing to rent to tenants without vouchers, even if they recoup less, because of the need to have the money promptly to pay for mortgages and improve bottom lines.

Rachel Fee, executive director of the nonprofit New York Housing Conference, told Gothamist that “payment delays and funding uncertainty can send shockwaves through the affordable housing community.”

— Holden Walter-Warner