Use it or lose it: Tenant aid effort nears a federal cutoff
For several months, Gregory Heller, an official with a Philadelphia nonprofit group, has grappled with an unusual problem. He had $60 million in rental aid to help low- income tenants weather the pandemic — and a whole lot of trouble spending it.
Designing questionnaires, verifying bank statements, processing stacks of paperwork: There is a wide administrativegapbetweenthe goal of getting money to renters who need it and the reality of cutting a check to their landlord. People like Heller are trying to bridge it.
He is among hundreds of public servants and nonprofit employees nationwide who are scrambling to unload hundreds of millions in federal aid for tenants before a Dec. 30 deadline. Theydon’t have enough money to address a growing rental housing crisis yet are struggling to pay out what they have — an undertaking that has become evenmore urgent as other federal emergency programs, including unemployment benefits and an eviction moratorium, are also about to expire.
Working from a home office in front of a laptop whose spreadsheets represent roofs over families’ heads, Heller, senior vice president for community investment at the Philadelphia Housing Development Corp., is so engulfed in his efforts that he now supplements the work of his support staffby taking calls from tenants and landlords on his cellphone. Thatway he can pitch in on answering questions andreviewapplications on the fly, part of a rush to stave off awave of evictions, one tenant at a time.
“I get calls all day, every day,” he said. “I’ve basically joined the help desk.”
Philadelphia is a case study in the simple-but-not- easy task of helping tenants with the rent. Social programsare often a partnership inwhich cities provide funding and lay out rules but delegate the execution to quasi-governmental nonprofit organizations like Heller’s. Like most places, Philadelphia isn’t close to satisfying the need for help. But through rounds of rejiggering and three phases of funding — each with its own maze of rules and requirements — Heller’s group built a teamto distribute aid, whittleddown the processes that delayed it and ultimately concluded that the bestway to help was the most straightforward: Give the money directly to renters.
“There’s a societal belief that poor people can’t spend money the right way, and I think it’s important to start questioning that assumption,” Heller said.
Almost fromthe moment the pandemic spread across the United States, advocacy groups have warned that the economic fallout could cause mass displacement of low-income tenants. In response, more than 400 state and local governments have used money from the federal CARES Act to set up funds to cover at least $4.3 billion in rental assistance — money that has helped tenants pay their bills and landlords stay current on their mortgages, according to a database set up by the National LowIncomeHousingCoalition, a policy group.
But now many jurisdictions are reporting trouble spending it, and with less than two weeks left in the year, they are on pace to have more than $300 million left over, according to the coalition’s database. In a pattern that predated the pandemic, the programs have been complicated by bureaucratic hurdles, competing budget demands and a reluctance among landlords to take part.
Therewas shifting federal guidance on how CARES Act money could be spent. States passed legislation that piled local rules on top of the federal rules. Each layer was ostensibly created to improveprograms— preventing fraud, making sure the moneywent to the neediest tenants — but added numerous hurdles for both tenants and landlords, and in the end cost time.
“In trying to build bulletproof programs, you build programs that take a long time to get off the ground or simply don’t work because they are too clunky,” said Brad Gair, a principal with Witt O’Brien’s, an emergency-management consulting firm that has helped about a dozen state and local governments create rental funds.
Hoping to distribute the remaining aid before it is forfeited, many states and cities are simplifying applications and moving money from nonprofits that can’t process the aid fast enough to those that can. Others are redirecting the funds to different purposes, lest they go unspent.
None of this is for lack of demand. Ininterviews, more than a dozenofficials of nonprofit groups and housing administrators reported a deluge of applications, while reports show tenants are piling up credit card bills, back rentandloans. Moody’s Analytics estimates that by the end of the year some 11 million lower-income renters will be about $70 billion in arrears.
Tenantadvocates, landlord organizations and local-government associations have called onCongress to extend the Dec. 30 deadline.
“The idea of reverting that money back to the Treasury just as the eviction moratoriums expire and renters are on the brink is absurd and cruel,” said Diane Yentel, chief executive of the National Low Income Housing Coalition.