WILMINGTON — Federal housing assistance in the Cape Fear was on the verge of crisis as the nation’s longest-ever government shutdown continued, though with a Congressional deal now incoming, local agencies can breathe a sigh of relief — at least until January.
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The U.S. House of Representatives is expected to take up a continuing resolution to fund the government through Jan. 30 after the U.S. Senate passed the spending package Monday night in a 60-40 vote.
Eight Democrats broke party ranks to support the measure, despite the deal not including Democrats’ central demand — the extension of Affordable Care Act tax credits. Without them, 24 million Americans that buy health insurance from the ACA marketplace will see increases to their premiums next year, 26% on average.
The deal only funds three portions of the government for the full fiscal year — the legislative branch’s operations, military construction, Department of Veterans Affairs, Department of Agriculture and the FDA — the latter of which includes full funding for food stamps.
Other functions of government — including the Department of Housing and Urban Development, which funds Section 8 housing vouchers, public housing projects and homelessness services — will need Congress to agree on a full spending bill before the end of January or risk ending up in another funding gridlock.
For the Wilmington Housing Authority, a pause on federal funding could affect whether its landlords get checks they need to cover their Section 8 tenants’ rents.
WHA currently pays 525 landlords across the city, housing 1,222 families through the Housing Voucher Choice program, which requires families to pay 30% of their annual income toward rent in a housing unit of their choosing; WHA fills in the rest. This costs more than $13.4 million annually. In addition, WHA supports 111 units through the Project-Based Rental Assistance Program, which ties the subsidy to the rental unit itself. This is an additional $76,395.
WHA’s Chief Executive Officer Tyrone Garrett spoke to how the shutdown would affect the housing authority at Wilmington City Council’s Oct. 21 meeting.
“We’re trying to hold the status quo, allow residents to stay in their units; and there can be, as you have to know, there can be no evictions during that time,” Garrett said.
Thus, if money were to run out, landlords cannot kick out tenants whose subsidy doesn’t come in, though tenants are still required to continue paying their portion of the rent. Additionally, rent increases are not allowed during a shutdown.
As required by HUD, housing authorities do have reserves to tap into when monthly federal payments don’t come through. Garrett told Port City Daily on Nov. 6 the reserve has $2.6 million in it; it took 12 months for it to accumulate.
“We’re holding steadfast, believing that, hopefully, this will end much sooner than later and that if it does not we are up until Dec. 31 before we have to make any other harsh decisions,” Garrett said at the council meeting.
However, the game plan for after Dec. 31 — should the shutdown continue — doesn’t include asking any local authorities for help, Garrett told Port City Daily. He wrote in an email that the plan would be to “offer as much support as financially possible” but didn’t elaborate further.
“I believe asking the government for funding would be futile at this point during a shutdown,” Garrett said. “Anyone receiving a source of federal funding has been affected.”
Because landlords can’t evict during a shutdown, finding money to pay them isn’t a requirement; though the hardship, should the funding freeze continue, could change their mind on whether to continue accepting Section 8 vouchers in the future.
North Carolina law does not prohibit landlords from refusing to accept housing vouchers, though if they do, they have to treat the Section 8 tenant the same as any other — no higher rent or fees can be applied, any screening process can’t be more stringent. Some cities and counties, like Charlotte and Mecklenburg County, do have ordinances preventing landlords that receive city or county funding from refusing to accept housing vouchers.
Port City Daily asked Garrett if the housing authority experienced landlords backing out of accepting Section 8 after previous government shutdowns; he said no. He also reported there had not been a problem with its landlords trying to raise rent or evict tenants.
Garret told the city on Oct. 21 that notices had already been sent to landlords about what is and isn’t allowed during a government shutdown.
While WHA has adopted a wait-and-see approach for the housing voucher payments, it has been more proactive when it comes to the capital projects it has underway. Namely, WHA has secured a grant from The Endowment to fully fund the first phase of Hillcrest’s rebuild.
The grant is worth $5.7 million for 84 senior living units. WHA announced last year it would rebuild the 251-unit Hillcrest complex in four phases, costing between $20 to $25 million. The Endowment grant covers the remaining amount needed for the project’s first phase that wasn’t paid for through HUD’s Low-Income Housing Tax Credit.
At the Oct. 21 meeting, Garrett said he expected the project’s timeline to be pushed back due to the shutdown, as furloughed federal employees are accumulating a backlog of approvals from projects across the country. He said he expected to close on the project in the first quarter of 2026, but that could be pushed to the second quarter should the shutdown continue.
“It will impact us that way; it will not impact us in terms of funding,” Garrett said.
Port City Daily asked Garrett if the shutdown was currently affecting any of its other redevelopments — Solomon Towers, Houston Moore and Jervay Place — but the chief executive said not at this time. When asked if he knew when those projects would be delayed should the shutdown continue, he said he didn’t know.
Reach journalist Brenna Flanagan at brenna@localdailymedia.com or text our tip line at 910-800-6397.
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