The Government Shutdown 2025: What Landlords Need to Know

October 10, 2025

When the federal government shuts down, landlords across California face uncertainty about rent payments, housing assistance programs, and tenant relationships. If you’re a property owner wondering whether your Section 8 payments will arrive or how to handle tenants who are federal employees, you’re not alone. This guide breaks down exactly what the 2025 government shutdown means for the rental market and what steps you need to take to protect your property and stay compliant with California law.

What Happens During a Government Shutdown and Why It Matters to Landlords

A government shutdown occurs when Congress fails to pass funding legislation, resulting in the temporary suspension of non-essential federal operations. Federal employees may be furloughed or work without immediate pay, and many government services will slow down or temporarily suspended.

For landlords, the primary concern centers on housing assistance payments, particularly Section 8 vouchers administered through the Department of Housing and Urban Development. (HUD). Unlike regular tenants who pay rent from personal income, Section 8 tenants rely on federal funding that flows through local housing authorities to landlords.

Why This Matters for California Landlords:

HUD-funded programs, such as Section 8, represent a significant portion of the rental market in California.
Federal employees who rent may not receive their paychecks on time, which can impact their ability to pay rent on time.
Landlords must navigate these challenges while maintaining compliance with California’s strict fair housing laws.
Understanding your rights and obligations during a shutdown is important so that you can protect your income stream and your legal standing.

The Good News

Housing assistance programs typically have funding reserves that allow them to continue payments even during short-term shutdowns. However, landlords need to stay informed and prepared for various scenarios.

Are Section 8 Payments Still Being Made?

Yes, Section 8 payments are still being made in California, and local housing authorities have confirmed that they remain operational. For a quick reference, visit our Housing Hero Newsletter update on the federal shutdown.

Here are more details on what we know from official sources:

The San Diego Housing Commission (SDHC) states that it is “not expecting any immediate impact on SDHC or our programs due to the federal government’s temporary shutdown.” The commission remains open and is processing housing assistance payments on schedule.
The Housing Authority of the County of San Diego (HACSD) announced, “No Impact for October 2025—Housing Assistance Payments were disbursed to landlords on schedule. Partial funding for November payments has been obligated by HUD.”
Orange County Housing Authority (OCHA) has confirmed that existing Section 8 payments are continuing for now, with staff monitoring the situation closely.
The National Apartment Association reassures landlords that HUD typically has reserve funding, allowing housing assistance payments to continue for several weeks or even months during a shutdown. Section 8 is an essential program with multi-year appropriations, meaning payments don’t immediately halt when the government shuts down.

What this means for you, as a landlord:

Continue processing rent as usual.
Section 8 payments should arrive on your regular schedule.
Monitor announcements from your local housing authority.
Keep documentation of all payments and communications.

However, if the shutdown extends for several months, funding reserves could eventually be depleted. We’ll address that scenario in the Q&A section below.

How a Government Shutdown Can Affect the Broader Rental Market

While Section 8 payments remain protected in the short term, a government shutdown creates ripple effects throughout the rental market that landlords should be aware of.

Tenants Who Are Federal Workers May Face Paycheck Delays

Approximately 150,000 federal workers live in California, many concentrated in San Diego (due to military installations) and other urban areas. During a shutdown, you can expect that:

Employees classified as non-essential may be furloughed without pay
Essential employees must work but don’t receive paychecks (back pay) until the shutdown ends.
Pay delays create immediate cash flow problems for tenants who depend on regular paychecks.

Ripple Effects on the Broader Economy

Extended shutdowns can also affect:

Delayed tax refunds can impact tenants who count on refunds for major expenses.
Reduced consumer spending as federal workers and contractors cut back.
Small businesses are impacted when government contracts are paused.
General market anxiety that can affect tenant confidence and payment behavior

You Can Expect Delays in These Key Services

Government shutdowns slow down various services that indirectly affect landlords:

Background check databases may not update.
Immigration verification systems (E-Verify) may be unavailable.
FHA loan processing for home purchases slows, keeping more people in the rental market.
Tax transcript requests for tenant screening may be delayed.

California Law Still Applies: Section 8 & Fair Housing Compliance

A government shutdown does not suspend fair housing laws. In fact, California’s protections for Section 8 tenants remain fully enforceable, and violations during uncertain times can be exceptionally costly. To learn more about how Section 8 works, download our Section 8 guide!

SB 329: Source of Income Protection

Since January 1, 2020, California law (SB 329, 2019) has prohibited landlords from refusing to participate in Section 8 or other housing assistance programs. Source of income is now a protected class under California fair housing law, meaning:

You cannot advertise “No Section 8” in your listings.
You cannot refuse applications solely because income comes from a voucher.
You must apply the same screening criteria to voucher holders as to other applicants.
You cannot claim the shutdown as a reason to discriminate against Section 8 applicants.

California Apartment Association Guidance

The CAA reminds landlords that refusing to rent to Section 8 tenants or misusing background checks constitutes a fair housing violation. During a shutdown, some landlords might be tempted to avoid Section 8 tenants out of concern about payment reliability, but this is illegal and can result in significant penalties.

What You Can (and Can’t) Do

You Can	You Can’t
Apply consistent screening criteria to all applicants	Refuse to rent to someone because they use a housing voucher
Verify income and rental history through appropriate channels	Set different terms or conditions for Section 8 tenants
Request documentation of voucher approval	Claim that the shutdown justifies discriminatory policies
Require tenants to meet your property’s reasonable occupancy standards	Evict a Section 8 tenant solely due to delayed federal payments beyond their control

For more detailed information on California’s Section 8 laws and recent discrimination cases, read our article: A Wake-Up Call on Section 8 Discrimination and Important Legal Updates for California Landlords (2025).

Remember: Fair housing violations can result in lawsuits, fines, and damage to your reputation. The shutdown doesn’t change these legal obligations.

What Landlords Should Do

Being proactive protects your rental income and ensures compliance with California law. Here’s your action plan:

1. Monitor Official Sources

Stay up-to-date with reliable channels, such as:

San Diego Housing Commission (SDHC)
Housing Authority of the County of San Diego (HACSD)
Orange County Housing Authority (OCHA)
National Apartment Association (NAA)

2. Maintain Detailed Records

Document everything during this period.

Keep rent ledgers up to date with exact dates and amounts received.
Save all communication with tenants about payment concerns.
Document any payment delays and the circumstances.
Photograph and file notices and official correspondence.

This documentation protects you in the event of disputes that may come up later and demonstrates good faith compliance with fair housing laws.

3. Review Your Legal Obligations

Now is an excellent time to ensure you’re up to date on California rental law. Review:

Rental Law Updates for California Landlords
Section 8 California law SB 329 requirements and your obligations
AB 2747: California’s New Rent Reporting Law for Landlords

4. Use Available Resources

Good Life Property Management offers tools to help you navigate these challenges

Section 8 Guide, a comprehensive resource for working with voucher holders
AB 2747 Overview to understand rent reporting obligations
Legal Updates Archive, so that you can stay informed on changing regulations

5. Practice Flexibility When Appropriate

For tenants affected by the shutdown:

Consider offering short-term payment plans to tenants with a proven history of making timely payments.
Communicate early and often to gain a clear understanding of their situation.
Document any agreements in writing, including modified payment schedules.
Be consistent in how you apply flexibility to avoid discrimination claims.

Important: Flexibility doesn’t mean abandoning your rights as a landlord. It means making reasonable accommodations for temporary situations while protecting your property and assets.

6. Don't Make Hasty Decisions

Avoid these common mistakes:

Filing for eviction at the first sign of delay (especially for federal workers)
Changing your Section 8 acceptance policy
Making assumptions about payment reliability without facts
Taking advice from unlicensed sources or online forums

7. Consult Professionals

If you’re uncertain about how to handle a specific situation, you can:

Contact your property management company for guidance.
Consult with a real estate attorney familiar with California law.
Contact your local housing authority with questions about voucher payments.

7 Ways Professional Property Management Can Help You During Federal Uncertainty

Government shutdowns and policy changes create complex challenges that require expertise, time, and local knowledge. Here’s how professional property management companies help landlords navigate these situations.

#	What Property Managers Do	Description
(1)	Monitor Federal and State Changes in Real Time	Property managers actively track federal policy changes that affect housing programs, local housing authority announcements, and legislative updates that impact landlord obligations and keep you updated on best practices.
(2)	Keep You Compliant with Rental Laws	California rental laws are complicated and constantly changing. Property managers ensure you follow SB 329, fair housing requirements, and new regulations like AB 2747, so you avoid fines, lawsuits, and discrimination claims.
(3)	Handle All Tenant Communications Professionally	When tenants have concerns about rent payments or government impacts, property managers provide consistent and professional responses, maintaining documented communication records for legal protection. They handle difficult conversations and know what to say (and what not to say) to avoid legal pitfalls.
(4)	Manage Payment Issues and Find Solutions	Property managers handle payment problems the right way. They monitor Section 8 payments from all local housing authorities, create payment plans when appropriate, document everything, and know when flexibility helps versus when you need to enforce your rights.
(5)	Leverage Local Housing Authority Relationships	We work directly with SDHC, HACSD, and OCHA, so we understand local policies and have established relationships. This gives you insider access and helps us solve problems faster.
(6)	Reduce Your Legal and Financial Risk	Property managers protect you from lawsuits through proper documentation and consistent policies. They help you avoid costly mistakes like discrimination claims, legal violations, and lost rental income.
(7)	Give You Peace of Mind	Most importantly, you don’t have to track every policy change or handle problems on your own. Someone is always watching for your properties, supporting you through difficult situations, and protecting your investment with expertise. During government shutdowns, professional management pays for itself.

Frequently Asked Questions

Are Section 8 rent payments still being made?

Yes. SDHC, HACSD, and OCHA have all confirmed that housing assistance payments are being processed on schedule. HUD maintains reserve funding that allows Section 8 programs to operate for weeks or months during a shutdown.

Could payments stop if the shutdown drags on?

Possibly, but not immediately. Housing authorities have reserve funds. HACSD announced that HUD had already obligated partial funding for November 2025 payments before the shutdown. Monitor your local housing authority for updates if the shutdown extends beyond a few months.

Are housing authorities in California closed right now?

No. SDHC, HACSD, and OCHA remain open and operational. They’re considered essential services and continue to operate during federal shutdowns, using reserve funds and prior-year appropriations.

Can I turn away applicants who rely on Section 8 during a shutdown?

No. California SB 329 prohibits discrimination based on source of income, including Section 8 vouchers. The shutdown doesn’t suspend this protection. Refusing Section 8 applicants can result in fair housing violations, fines, and lawsuits.

What about tenants who work for the federal government?

Federal employees may face delayed paychecks during shutdowns. We recommend that you communicate early with affected tenants, consider offering short-term payment plans to those with a good payment history, and document all agreements in writing. Federal employees typically receive back pay once shutdowns end, so that flexibility may be warranted.

What’s the most important step for landlords right now?

Stay informed and document everything. Monitor your local housing authority (SDHC, HACSD, or OCHA) for updates. Keep detailed records of all payments, communications, and arrangements. Review the California SB 329 requirements and consult a property management professional if you are uncertain.

Should I charge late fees to federal employees affected by the shutdown?

Technically, you can legally enforce late fees per your lease terms. However, consider the tenant’s payment history, their communication about the situation, and the likelihood of back pay. Apply your policy consistently across all tenants to avoid discrimination claims, and document your decision-making.