Economic support for rural housing projects harmed in federal shutdown | Opinion

The current federal government shutdown isn’t just a budget standoff in Washington; it’s a direct hit to the backbone of America’s community investment infrastructure.

For the first time in U.S. history, the administration has used reductions in force (RIFs) during a temporary shutdown, targeting staffing at the Community Development Financial Institution Fund, the Treasury Department office that underpins billions in affordable housing and community lending nationwide.

The administration insists that no programs have been eliminated. But cutting the staff who process funding applications, oversee compliance and manage awards has the same effect. Without people, these programs can’t run. And when the CDFI Fund can’t function, the consequences ripple out fast: stalled housing developments, delayed small business lending and a breakdown of financial lifelines in both urban and rural communities.

This move is unprecedented. In the history of government shutdowns; RIFs have never been issued as a way to reduce federal workforce capacity during a temporary funding lapse. In effect, the administration has found a back-door way to weaken programs it hasn’t eliminated outright. It’s a dangerous precedent.

What makes this decision even more troubling is that CDFIs have long enjoyed broad bipartisan support. There’s a Senate CDFI Caucus and both Republican and Democratic lawmakers have voiced concerns about these staffing cuts. That’s because CDFIs are not a partisan tool; they are a proven, community-based financing model that works in red, blue and rural America alike. From farmworker housing to small business financing, CDFIs fill a market gap the private sector doesn’t reach. Weakening them weakens communities.

We don’t have to speculate about the impact. We can measure it. At the California Community Reinvestment Corporation (CCRC), we provide affordable housing financing that depends on functioning federal systems, including CDFI Fund staffing and programs. Our fiscal year 2025 lending impact report illustrates exactly what’s at stake.

In the past year alone, CCRC funded $252.5 million in loans, supporting 2,600 affordable homes across 36 properties in 13 counties. Over 80% of these homes are affordable to households earning 50% or less of the area median income. Nearly half serve seniors and veterans and many are located near jobs centers.

This investment delivers tangible returns. Each year, these developments generate $27.9 million in rent savings for residents, $22.2 million in state and local tax revenues, $75.5 million in wages and business income and support nearly 1,900 jobs. Children growing up in these homes see an average $55,500 lifetime earnings boost. These are real, measurable economic benefits that flow back into communities, and they depend on a functioning CDFI ecosystem to keep moving.

The administration’s approach has drawn sharp pushback on Capitol Hill. Lawmakers on both sides have made clear they do not agree with using RIFs to hollow out CDFI capacity during a shutdown. That’s because they understand the stakes: undermining the fund doesn’t just hurt a handful of organizations, it weakens a bipartisan economic engine that has quietly fueled community revitalization for decades.

By destabilizing staffing, the administration has made it impossible for these programs to function, without technically cutting them. That’s both cynical and dangerous. And unless Congress acts to reverse course and restore operational capacity, the damage will outlast the shutdown itself.

CDFIs have never been a partisan issue. They are one of the few tools that unite Republicans and Democrats around shared goals: economic mobility, small business growth, affordable housing and rural development. But they cannot fulfill that mission without a federal partner that honors its role.

The message is simple: the longer this shutdown goes on, the more communities lose. If we want affordable housing to get built, if we want small businesses to keep growing, if we want rural areas to thrive, the CDFI Fund must be fully staffed and fully operational. Anything less is not fiscal discipline — it’s economic sabotage.

Tia Boatman-Patterson is CEO of the California Community Reinvestment Corp.