The US government shutdown has affected a lot of sectors. Commercial real estate is currently feeling the ripples of what has already been a one-month shutdown of government services. NREI Online detailed the direct repercussions of that government shutdown on real estate.
The shutdown was felt greatly by those whose spending for the year hadn't been budgeted. The sectors of Agriculture, Commerce, Housing and Urban Development, Homeland Security, the Interior, and State and Treasury were affected. Additionally, 800,000 federal employees had been given two options-to go on furlough, or to keep on working, but without pay.
One of the bigger questions during the government shutdown is how it will affect rent checks. The General Services Administration (GSA) is currently affected by the government shutdown, particularly funding. GSA oversees the workspace distribution for federal agencies. Affected by the shutdown, it began to furlough employees whose work are defined as non-essential to the agency.
The federal government shutdown has started to trickle in specifically in the sectors of commercial real estate such as multi-family loans, to government contracts which included retail spending. According to Bisnow, the effects of the government shutdown might be greater than they expected, if it doesn't end soon.
The Democrats are still in control of the House of Representatives last Thursday and are still blocking moves by US president Donald Trump on securing federal funding for the creation of his 'border wall.' With this stalemate, it seems that the end of the shutdown is a long way off, with the final say for the passing of a bill for government spending remaining with the aforementioned side.
To look at the effect of the shutdown, a perfect case is presented with the Federal Housing Administration. With the shutdown, the multifamily program is put on hold. The delay in approving projects related with housing multiple families means that housing, already on a fragile state prior to the shutdown, is in even worse shape than before.
To put it simply, Moody's Investors Services have said that the shutdown doesn't help anyone. It is negative for everyone affected-whether they are involved in a residential mortgage, lending, or anything else. Lenders and everyone else will have to create workarounds to solve problems caused by the shutdown, but in the long run, the government shutdown will have to end for these issues to cease.
