kristina toscano
Slow relief funds rollout means renters face uncertain future
02:55 - Source: CNNBusiness
Washington CNN  — 

One year after Congress first authorized billions of dollars in Covid-19 pandemic rental assistance, the money has helped more than 2.5 million struggling renters to remain in their homes. But there are still roughly 4.7 million households behind on their rent across the country.

Last December, lawmakers appropriated $25 billion for the federal emergency rental assistance program and followed up with another $22 billion in March as part of the larger pandemic relief legislation known as the American Rescue Plan.

The money is still making its way to struggling renters. About 80% of the first tranche is expected to be spent or obligated by the end of the year, according to the Treasury Department, which delivered the funds to states, as well as some cities and counties. The department is currently reallocating funds to areas with more need.

The program has been a success in many communities, but the aid was extremely slow in getting out the door in others as new state and local programs were stood up to distribute the money.

Fifteen states had paid out less than 20% of the total amount of money each received from the federal government by the end of October, according to the latest data available, and some of those states continue to have a significant proportion of their renters in need.

In four of those states – Georgia, South Carolina, Delaware and Alabama – more than 20% of low-income renters were behind on their rent at that time, according to an analysis by the National Equity Atlas that was shared with CNN. The data tool is run by researchers at PolicyLink and the USC Equity Research Institute.

The group estimated that 4.7 million low-income households nationwide were behind on their rent in October and could be eligible for the pandemic aid.

“It’s emblematic of the inequality of the pandemic and who is still suffering,” said Sarah Treuhaft, vice president of research at PolicyLink.

A slow start

Households are eligible for the money if they experienced financial hardship due to the pandemic, have incomes at or below 80% of their area median income, can demonstrate risk of experiencing homelessness, or already qualify for unemployment benefits.

The hundreds of programs that distribute the aid across the nation vary in how they determine whether a tenant was at risk of homelessness and what documents they required. Those that got money out quicker were generally less restrictive, according to research by the National Low Income Housing Coalition.

Some states needed to stand up an entirely new program to distribute the funds, which often required creating an online portal and hiring staff. Many didn’t start distributing the funds until spring, months after the first round of emergency rental assistance aid was authorized by Congress.

Alabama had to establish a new program from scratch, which it did quickly, and launched its statewide rental assistance program by March. But it was immediately overwhelmed.

“The early backlog will always keep our cumulative disbursements behind other states that rolled out the funds under existing, seasoned programs,” said David Young, multifamily administrator at the Alabama Housing Finance Authority. He noted that the statewide program is on track to use all the federal money it was allocated.

South Carolina needed approval from the legislature before creating its statewide rental assistance program. It didn’t launch until April and its first payments weren’t made until late in June, said Chris Winston, spokesman for the South Carolina State Housing Finance and Development Authority.

“We’re getting more applications through the door, but we’re still not seeing the level we expected,” Winston said.

The statewide program has made several changes since it first launched to make it easier to apply. It’s loosened documentation requirements, started to provide funding directly to tenants if their landlord wasn’t responding, doubled staff at the call center and partnered with nearly 40 organizations that offer in-person help to applicants.

Ramping up at a key moment

Many rental relief programs that were slow to start were able to accelerate their spending by the summer. In June alone, they spent two times what they spent from January through April.

The ramp up came just in time. The federal moratorium on evictions expired in August after being in place for nearly a year.

It also helped that Treasury relaxed some of its guidelines, making it more clear that programs can rely on applicant’s self-attestations without further documentation.

“Most people know about the aid by now. There are billboards up across the state that weren’t there in the summer,” said Lindsey Siegel, director of housing advocacy at Atlanta Legal Aid Society.

She said that there’s now a bottleneck of people waiting for their applications to be processed, but that more need exists.

A recent statement posted by the Georgia Department of Community Affairs commissioner said that there was no data-driven rationale for the amount allocated to the state, suggesting that the percentage of funds spent is a poor indicator of effectiveness. It also said that the state had fewer applications for assistance, partly because of its low unemployment rate, and noted that Georgians pay a lower average rent and utility payment than in high-cost states.

Yet 28% of low-income renters were behind on rent as of October, a bigger percentage than in any other state, according to the National Equity Atlas.

Like in several other states across the country, some county-level rental assistance programs in Georgia have more quickly disbursed the money than the system run by the state. Earlier this month, the Treasury Department began the process of shifting unused funds to places that have run out and still have people in need of help.

Local programs have seen success

Some programs on the local level, like the one in Harris County, Texas, had early success in reaching struggling renters. The county worked together with the city of Houston and has given out most of the nearly $300 million it received from Treasury, helping more than 67,000 families. The program already had funds out the door by the end of March, said Rafael Lemaitre, communications director for the Harris County judge’s office.

Two initiatives within the program made it unique. A robust navigator system utilized nine local organizations across the county that spread the word about the available aid and helped people prepare their applications. It also enacted an eviction intervention effort, proactively reaching out to tenants with upcoming eviction cases and their landlords.

It helped Houston resident Michael Mata stay in his apartment after losing his job as a machinist amid a round of pandemic-related layoffs. He said he received enough money to pay his back rent, current rent and a month in advance.

“I try to be one of those people who are composed, but I was stressing out at the time. I’m so grateful,” Mata said.

There may always be renters in need

Even places that have distributed most of the money received from the federal government may not have been successful at reaching all of the renters in need.

“No, it’s not enough money to meet all the need,” said Leah Barton, who works for the Harris County Office of County Administration and helps run the rental assistance program.

“There’s a portion of people for whom short-term assistance was what they needed to bridge the gap while they came out of unemployment or were working reduced hours. But there is also a group of folks structurally upside down. Affordable housing crisis is real,” she added.

States like New York and New Jersey have used up all their rental assistance funds, but still have thousands of low-income renters behind on their rent. They could receive additional funds once Treasury reallocates unused funding.

The eviction rate across the county has ticked up since the federal moratorium expired in August. But it wasn’t a huge jump and the eviction rate is still well below the historical pre-pandemic average, said Peter Hepburn, a research fellow at The Eviction Lab at Princeton University.

In Alabama, the approval process is now expedited for those renters facing eviction.

“I think we were able to avoid a lot of evictions,” said Michael Forton, director of advocacy at Legal Services Alabama.

“But after doing this work for 17 years, I know there’s always going to be need,” he added.