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The Federal Government Has Spent $46 Billion on Emergency Rental Assistance. The Rollout Has Been a Hot Mess.

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The COVID relief bills passed by Congress in December 2020 and March 2021 collectively awarded $46 billion to states, local governments, territories, and tribes to set up their own emergency rental assistance programs. Doing so has proven a challenge.

For instance, New York didn’t begin accepting applications for its $2 billion federally funded Emergency Rental Assistance Program until last week. It has thus far been a disaster.

New York tenants were met with crashing web pages. Landlords were being asked to upload documents and information they didn’t have, including their tenants’ gender and social security numbers for undocumented renters.

For Jay Martin, the executive director of the Community Housing Improvement Program, a landlord association, it was the last straw.

“After waiting 15 months for help from the government the last thing frustrated property owners and renters need is an application process that doesn’t work,” he said in a statement last week. “The Emergency Rental Assistance Program is supposed to bring hope to tens of thousands of struggling families. Instead, it is reinforcing the fears of many renters and small property owners that applying for the funds is just not worth their time.”

Martin tells Reason that the state’s failure to work with property owners in the run-up to the program’s launch contributed to its disastrous start. Even if problems with the website are resolved soon enough, the troubled rollout will permanently drive down tenants’ interest in participating, he says.

An earlier rent relief program run by New York has thus far managed to award only $47 million of $100 million in available funds to just 16 percent of total applications, reported Gothamist in March.

Michigan opened applications for $282 million in federally allocated rent relief in March. By mid-May only about 7 percent of those funds had been dispersed, reports the Detroit Free-Press.

An investigation from the Washington Post found that as of May 5, five of 15 Maryland and Virginia counties surrounding Washington D.C. had yet to send a single renter a check. D.C. itself has spent $10.5 million of the $200 million of its federal rent relief allocation as of the end of May.

“The first tranche was allocated in December, the second tranche allocated in [March]. There are still places in the country where grantees have not issued a single dollar of assistance,” says Greg Brown, vice president of government affairs for the National Apartment Association (NAA).

It wasn’t until mid-May that King County, Washington (which contains Seattle) opened up applications for $145 million in rent relief funded by the relief bill Congress passed in December. Brown says that as of last week, King County has yet to disperse any of that money.

Other forms of federal pandemic relief have flowed to recipients more quickly mostly by using existing state channels (expanded unemployment benefits), because the funds required very little vetting (like the scandal-ridden Paycheck Protection Program), or because they had minimal eligibility requirements (the near-universal stimulus checks).

States and local governments receiving federal rent relief grants, however, have generally had to set up entirely new programs to administer these funds.

“The program itself doesn’t run through existing housing provider channels” like public housing providers or state housing finance agencies, says NAA’s Brown. Grantees “didn’t have any experience with this. They didn’t know how to build a program like this.”

Federal strings attached to the rent relief money further complicated implementation. For starters, grantees were required to ensure renters met federal eligibility requirements, including that they’re low-income and have experienced some form of financial hardship during the pandemic. The latest COVID relief bill also requires very low-income, severely rent-burdened renters to be prioritized for aid.

In addition, grantees are required to collect data on the households they’re providing rental assistance to, from how much back rent they owe and the name and social security number of their landlord, to their race and gender (one of the requirements Martin said was causing grief for his group’s members).

Programs that provided “bundled” relief to owners of larger buildings who had multiple renters in arrears have proven most successful, says Kathy Howard of property management company Regional Management, which oversees some 5,000 apartments in the Baltimore area.

She gives the example of an eviction prevention program run jointly by Baltimore County and United Way of Central Maryland, a nonprofit. Through that program, her company was able to apply for money to cover multiple tenants’ back rent at once, greatly simplifying the application process and the dispersal of funds.

Applications for Baltimore County’s bundled program opened on December 18, checks started going out in early January, and all funds had been dispersed by late February.

In contrast, Baltimore County’s approach to distributing this most recent round of federal rent relief requires individual tenants to apply through an all-online process. The county then contacts landlords to confirm some information, including how much rent is owed, and then the aid is dispersed on a case-by-case basis.

Through a lot of proactive solicitation, Regional Management got 318 of its tenants to sign up for rental assistance. The company had to set up a computer lab in its offices for tenants to apply, given that many of them don’t own computers.

Despite those efforts, Baltimore County has been slow to process applications on its end.

“We are now waiting for the program to come back to us to ask for our side of the information, and we have one request from the program itself,” Howard says. “I think that speaks to the amount of bureaucracy that’s attached to some of these funds. It’s neither fast nor necessarily very efficient.”

Brown argues that the best rent relief programs allow landlords to apply for rent relief on behalf of their tenants and keep paperwork and forms to a minimum.

Guidance coming out of the U.S. Treasury Department, which administers rent relief at the federal level, has been a mixed bag. In May, the department updated its policies for recipients of the second round of emergency rental assistance funds. Some of the Treasury guidance was aimed at reducing paperwork, including prohibiting state and local relief programs from establishing documentation requirements that would reduce participation by eligible households. But this guidance also allowed rental assistance to be offered to tenants first for the first time. (The original round of federal rent relief required grantees to offer the relief to landlords first.)

These programs also require landlords to obtain tenants’ consent before applying for relief on their behalf. That can prove a problem when tenants, who are shielded from eviction by federal (and often state and local eviction) moratoriums, go silent.

“You do have a segment of folks amongst the residents who’ve stopped talking to their [housing] provider. They don’t respond to communications,” says Brown. “The challenge there is that how am I, as a provider, supposed to secure assistance for someone who hasn’t been paying rent for a long time if they haven’t been communicating with me.”

Howard says her company has struggled with this issue as well.

Roughly 20 percent of Regional Management tenants are at least one month behind on rent, she says, with the average delinquent renter behind about three to five months. Somewhere under 100 of the company’s tenants are between 12 and 18 months behind on their rent.

“Those people tend to concern us very deeply because they don’t appear to be accessing these programs and they are not talking to us either,” she says.

The federal government’s legally fraught eviction moratorium is supposed to expire at the end of June. The Biden Administration could choose to extend it further. Even if it is allowed to lapse, a number of state and local moratoriums will remain in place; New York’s eviction moratorium doesn’t sunset until August, for instance.

Throughout the pandemic, the median view of good housing policy—supported by landlord associations, tenant advocates, and policy wonks of all ideological stripes—has been to have the federal government fund rent relief. That way, the providers of rental housing can pay their bills, and financially pressed renters aren’t forced onto the streets or into more crowded living situations.

Despite these funds being appropriated for rent relief programs, actually getting money to people continues to be a major challenge.



Source: https://reason.com/2021/06/08/the-federal-government-has-spent-46-billion-on-emergency-rental-assistance-the-rollout-has-been-a-hot-mess/


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