Section 8 may not be as recession proof as some think

[Kyle J.]

So I've seen a few posts on here recently from some users saying we should all have Section 8 rentals because they're essentially guaranteed rents and recession-proof.  Now I'm neither for or against Section 8 rentals, as I have both Section 8 and regular non-Section 8 properties (though the vast majority of my rentals are not Section 8).   In truth, there are pros and cons to each. 

However, today I received an email from the Housing Authority that was quite interesting. It started out saying they wanted to inform me (as a participating landlord) of their funding status and ask for my cooperation in freezing rent increases. Apparently, according to the U.S. Department of Housing and Urban Development (HUD), "many public housing authorities are experiencing a shortfall in federal funding which is expected to continue through CY 2021." Additionally, "because of the Coronavirus pandemic, many of (HUD's) assisted households lost their jobs with more expected".

The email goes on to explain that these factors have collectively caused significant household income losses, and an expected increased usage in Housing Assistance Payment (HAP) on behalf of these households to prevent them from losing their residences.  Therefore, the Housing Authority is requesting that landlords delay rental adjustment requests until AFTER 2021.

It goes on to say that if they don't get cooperation from landlords, the current and projected lack of funding may require them to reduce the program size and serve fewer families and "CANCEL current HAP contracts, adding to the homeless population during the Cornonavirus pandemic." 

Ultimately, no one knows how long this pandemic is going to last, but they're already requesting no rent increases until 2022. 

And if they ever did cancel a HAP contract mid-tenancy, good luck getting that tenant out with there being moratoriums on evictions in most states/counties.  

So I guess nothing is ever guaranteed or without a downside.  Not even Section 8.