Millions in rental aid not reaching Tennessee residents
In March, Tennessee’s housing agency launched a statewide program providing federal aid to families with hardship paying rent amid the COVID-19 pandemic.
Fully funded by federal dollars, the program was expected to help 20,000 to 30,000 families remain in their homes for up to 12 months.
But five months later, only a fraction of the money went to eligible households.
As of Monday morning, the agency had only distributed $15.7 million — or 4% of the $383.4 million it received in federal funds — in helping roughly 2,400 families with payments, according to Ralph Perrey, director of Tennessee Housing Development Agency.
The stall in progress reflects a national struggle. Tennessee included, 36 states had distributed less than 10% of the funds by the end of June from their federally funded emergency rental assistance programs, according to data from the U.S. Department of Treasury.
States experiencing hardships dispensing the funds face multifaceted problems, ranging from political discord over fund administration to system backlogs, according to media reports.
In Tennessee — where the program covers 91 of the 95 counties — the problem is neither, Perrey said. Rather, he said, there seems to be an apparent lack of demand.
“The reason not much money is going out is that not many applications are coming in,” he said. “(The demand) has not been there thus far.”
The agency averaged 200 applications a week, he said, and that number only increased to 451 last week as the federal eviction moratorium effectively expired. Despite a moratorium extension from the Centers of Disease Control and Prevention, a federal appeals court ruling means the rule does not apply to Tennessee.
Meanwhile, evictions have carried on throughout the pandemic as landlords take tenants struggling to pay to court.
There may be a mismatch between families in need and tenants who actually qualify for the program, Perrey said.
“The legislation enacted by Congress was designed to provide emergency rent relief for folks who had been financially impacted by COVID,” he said. “It was not designed to be a blanket eviction prevention program.”
Tennessee ranks 31st in rental aid distribution, data shows
The state-run rental relief program is funded through the Coronavirus Relief Fund, which was established by the the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Tennessee Housing Development Agency received $383.4 million in the first round in December. But without using much of it, the agency has applied for another $312M through the second round, which gives states more “flexibilities” in distribution, Perrey said.
The federal government expanded the eligible application for the second round of funding, according to the Congressional Research Service. States and localities can use part of the unobligated funds to provide additional affordable housing or to prevent evictions.
However, he said, “there is absolutely no possibility that we will use all the money allocated for this purpose.”
If the state does not deplete the federal funds, the remainder could be reallocated by the federal agency, Perrey said.
By the end of June, the state agency had spent $13.8 million on 2,072 households, data from the U.S. Department of the Treasury shows.
That ranked the state 31st among all state-run programs in rental relief funds distribution, according to the data. The state of Virginia, which launched its program in January, spent 42.6% of its federal share, the most among all states. Five states had not begun allocating the funds at all.
Distribution of rental aid is stalling in states such as Iowa, where disagreement over the use of funds slowed the process. Perrey said Southeastern states, such as Georgia, Mississippi and Kentucky, are seeing similar problems.
Outside the statewide program, five Tennessee localities — the city of Memphis, Knox County, Nashville, Rutherford County and Shelby County — also received funds for separate programs.
Some of them have seen similar trends.
By the end of June, Shelby County spent 44% of the $8.6 million it received, faster than other local programs in the state, data shows.
Metro Nashville lagged behind during the same time period, with 16% of the $20.9 million in federal funds distributed through Metro Action Commission’s HOPE program. But by Monday, 72% of the funds had been marked as pending or paid, Metro data shows.
Tenants still struggle with rent payment
But the federal aid available is unlikely reaching enough Tennesseans in need.
As of early July, roughly 20% of Tennessee renters were behind on their rent payment, according to a data analysis by the National Equity Atlas, a partnership between University of Southern California’s Equity Research Institute and national research group Policylink.
An estimated 167,000 Tennessee households owed more than $450 million in rent, according to the analysis. Nationally, the total rent debt has trended beyond $20 billion, with more than 6 million households behind on rent, the analysis found.
Evictions have continued and are expected to increase.
In Metro Nashville, judges and landlords are bracing for a swarm of evictions now that the federal moratorium is effectively over in Tennessee.
During the moratorium, Nashville landlords filed an average of 443 evictions each month with the Davidson County court system.
But in the last two weeks of July, a total of 408 were filed as landlords ramped up efforts to remove their tenants.
In eviction court, some landlords refused rent payment but chose to reclaim possession of their properties.
One property owner did not want federal assistance, but rather wanted that payment to come from their tenant, who could not pay for more than a year.
Perrey said the agency has kept up its outreach efforts, staying in touch with local courts, social services agencies and nonprofits such as the Legal Aid Society of Middle Tennessee and The Cumberlands.
The reason why the number of aid recipients is lower than expected could be a misestimate of the number of tenants in need, Perrey said.
To qualify for federal aid in Tennessee, tenants who lost their job or “significant income” and now make less than 80% of the area median income because of the pandemic qualify for the assistance, he previously told The Tennessean.
“I’m not sure that anybody had a real firm idea of just how many people were impacted,” Perrey said. “And I’m not sure that everyone who has been unable to pay their rent over the last year qualifies for the specific kind of assistance.”
The second round of federal funding could help broaden the reach, Perrey said.
“We may be able to approve payments on behalf of individuals who would not meet the criteria for the December money,” he said.