On the Home Front

by NLIHC Research Team

Congress is currently negotiating a bipartisan COVID-19 relief package that includes $25 billion in rent relief through the U.S. Treasury Department, funding critical to state and local emergency rental assistance programs, and a one-month extension of the federal eviction moratorium. Federal resources have played a significant role in state and local governments’ ability to respond to the eviction crisis threatening millions of renters during the COVID-19 pandemic. NLIHC identified more than 500 state and local emergency rental assistance programs created or expanded since March 2020. Of those programs that we know their funding sources, more than 70% were fully funded by the CARES Act, enacted by Congress at the end of March. While some programs struggled to overcome administrative hurdles, many programs successfully distributed their available funds in a timely manner. They all face unprecedented demand for assistance and are in need of additional resources and time to distribute the assistance, which the Emergency Coronavirus Relief Act as part of the bipartisan COVID-19 relief package provides.

The $25 billion proposed for rental assistance would enable existing programs to continue their efforts of keeping renters stably housed. Some programs would likely spend this money quickly. Three out of ten emergency rental assistance programs operating in response to COVID-19 have already closed, because they have exhausted their funds or they expect to exhaust their funds due to the overwhelming need and number of applications they’ve received. Some early programs closed just days after opening because of overwhelming demand. For example, Houston received more than 17,000 applications within 90 minutes of opening their first emergency rental assistance program. The $15 million program could only help approximately 6,800 households, or one-third of all applicants. Houston has since opened another rental assistance program with $20 million and allocated another $28.5 million to offer direct assistance to households who previously applied for any COVID-19 relief programs in the city but did not receive any due to limited resources. Small cities have also faced overwhelming need. Pasadena’s program received 768 applications, but with its limited funding of $1 million, could only help slightly more than one-third of the applicants (275 households).

Several statewide programs successfully distributed millions of dollars, but the need remains greater than the available assistance. From August through mid-November, the State of Illinois’ Emergency Rental Assistance program helped over 27,000 renter-households pay their rent, distributing more than $135 million out of their $150 million rental assistance program. The high demand and diminishing availability of rental assistance dollars spurred the state to add an additional $60 million allocation to its rental assistance program, bringing total funding to $210 million. The state expects to assist a total of 40,000 households and exhaust the remaining money by the end of the year. The COVID-19 Iowa Eviction and Foreclosure Prevention Program received several additional rounds of funding from the state after expending its initial $20 million allocation. It successfully delivered nearly $31 million to more than 13,450 renters as of December 15, 2020. Both state programs are closed to new applicants.

Other programs have faced administrative challenges in distributing assistance in a timely manner, but they continue to adapt and learn. NLIHC estimates that at least $335 million of rental assistance funded by Coronavirus Relief Funds (CRF) in the CARES Act could be at-risk of being unspent by the December 30, 2020 deadline, despite the overwhelming need for rental assistance. Some programs simply need more time. Getting new programs up and running, informing renters of the program, helping renters complete their applications and submit required documentation, and reaching out to landlords for payment information are time and resource-intensive processes. The City of Los Angeles, for example, went from no program to one with a goal of serving 50,000 households in a matter of months – a huge undertaking. Several programs need more time to adapt to challenges. Philadelphia, for example, faced challenges brought on by state restrictions. The City eventually modified its program to address low landlord participation by raising levels of assistance and providing direct-to-tenant assistance. The COVID-19 relief bill extends the deadline by which CRF money must be spent from December 30, 2020 to December 31, 2021, giving programs more time to make these improvements. 

The bipartisan Emergency Coronavirus Relief Act also extends the CDC eviction moratorium to January 31, 2021, which halts evictions for non-payment of rent. This extension is essential. Without it, millions of renters will face eviction on January 1 before state and local governments can distribute new rental assistance to them.

Renters are in trouble. According to the U.S. Census Bureau Household Pulse Survey, nearly 17% of renters were behind on rent payments in mid-November and only 44% of renters were highly confident in their ability to make next month’s rent payments on time. Tenants struggling to pay their rent have scraped by thus far through a variety of unsustainable means, including hollowing out their savings, using credit cards, or borrowing from family. Renters continue to accumulate rental debt and landlords continue to file evictions. The Emergency Coronavirus Relief Act of the bipartisan COVID-19 relief package is a necessary and important step in maintaining housing stability for low-income renters impacted by the pandemic. It includes $25 billion in emergency rental assistance, extends the CDC eviction moratorium until January 31, 2021, and extends the deadline for spending previously allocated CRF funds to the end of 2021. It is imperative that the bill includes all three components. 

To ensure that rental assistance is disbursed efficiently, the U.S. Treasury should provide clear and timely regulatory guidance to states and cities if the Act is enacted. We anticipate that jurisdictions will seek the Treasury’s guidance on what constitutes financial hardship or housing instability – two eligibility criteria for rental assistance identified in the COVID-19 relief package. The Treasury’s guidance should provide states and local jurisdictions the flexibility to adapt programs to best meet tenants’ needs and should affirm jurisdictions’ ability to broadly determine the meaning and documentation requirements of financial hardship and housing stability. The Treasury must also guarantee that additional regulatory guidance will not apply retroactively to funding already spent by programs. In the implementation of CARES Act CRF, the Treasury’s broad guidance without affirmation of flexibility, combined with programs’ fears of potentially violating forthcoming guidance, slowed down some programs’ ability to address program design and implementation challenges in initial CRF-funded rental assistance programs. For example, some program administrators were hesitant to allow applicants’ self-certification of income loss and forgo significant documentation requirements, even though those requirements could delay the intake and approval process out of fear that the Treasury would retroactively require significant documentation. We must ensure that jurisdictions have adequate flexibility, and are aware of it, in distributing rental assistance as quickly as possible to those who need it most, while working within the constraints of Treasury’s expectations.

We must recognize that the bill currently being negotiated is a short-term solution to a longer-term problem. NLIHC previously estimated that ensuring housing stability for low-income renters for up to 12 months would cost $100 billion. The proposed amount of the bill falls significantly short. Furthermore, low-income renters who struggled even before the pandemic and then were impacted by the pandemic will find it difficult to pay their accumulated rental debt after the economy recovers. Congress should immediately enact the bipartisan COVID relief bill and then get back to work on the long-term housing solutions that are still needed.