We Can Improve Rental Assistance Distribution. Here’s How.
Over a year into the pandemic, housing providers and residents continue to grapple with the devastating financial effects of COVID-19, with an estimated 7 million renters across the country owing approximately $57.3 billion in back rent, utilities and fees just as of January, Moody’s Analytics estimates. While the National Apartment Association (NAA) appreciates the Biden Administration and Congress’ bipartisan work to allocate $46 billion in Emergency Rental Assistance Program (ERAP) funds, the rollout of rental assistance programs that benefitted from federal aid continues to fall short, largely due to the requirements that state and local grantees (e.g. housing agencies or nonprofits) voluntarily put into place. The myriad of requirements is causing major distribution delays and are difficult for housing provider and renter applicants to navigate. Differences can be so drastic that, in some areas around the country, hardly one program is the same as another – even in the same state.
The U.S. Department of Treasury (USDT), charged with administering ERAP funds, has provided guidance and technical assistance to state and local grantees. While programmatic challenges remain a concern for many of the programs receiving ERAP dollars across the country, two state programs exemplify efficiency and effectiveness: Virginia and Colorado. These programs have clear eligibility and application processes that apply statewide and allow a seamless process for housing providers to work on behalf of their residents en masse to obtain relief.
Virginia’s Rent Relief Program (RRP) has shown early success, largely due to heavy advocacy from the Virginia Apartment Management Association (VAMA) and the Apartment and Office Building Association of Metropolitan Washington (AOBA). Tami Fossum, Executive Director of GEM Management shared:
One key procedure of Virginia’s RRP is allowing management companies to remit on behalf of residents with consent. The program approval process takes approximately 45 days with payment received within 15 days resulting in an approximate 60 day turn around.
The program was not always successful, however, and benefitted from lessons learned in 2020. Previously, before the specific federal allocation for rental assistance, Virginia’s Department of Housing and Community Development (DHCD) put together a program in the summer of 2020 which had a very long application process and required housing providers to discount the rent owed to receive assistance. Due to successful advocacy of VAMA and AOBA, the RRP is now a housing provider-led process administered through the Virginia Housing agency (formerly Virginia Housing Development Authority (VHDA), rather than DHCD.
Also contributing to the program’s success is that the RRP is a centralized program rather than a patchwork of locally administered programs, allowing companies to apply easily on behalf of eligible residents altogether and according to one unified set of rules. While the application process is an important factor of the program’s easy rollout, Fossum shared that the communication with Virginia Housing has been a key part in ensuring the smooth application process for housing providers and applicants alike:
VHDA has shown that they are here to assure the residents of Virginia who are in need are receiving the designated emergency rental assistance funding. We have had some residents apply on their own and Virginia Housing has taken our calls on these applications and provided feedback so management can assist resident in getting their application finalized.
Open communication channels and opportunities for coordination on applications have been essential to the Virginia program’s success as certification and documentation requirements have been barriers to entry for renters who are seeking relief in other jurisdictions. Housing providers prefer to submit sensitive information, such as tax ID and bank information for online payments, directly to program administrators. As of March 24, 2021, the RRP had helped 28,960 households, to the tune of $138.7 million, with an average payment of $4,789.
Similarly, Colorado’s program allows housing providers to begin the application process. Once the owner or operator submits their portion of the application, program administrators then send an email to the resident for the individual to complete the rest of the application. Housing provider-led submissions speed up the application process significantly, as many rental assistance programs require tax documents, rent legers and lease agreements.
Prior to the current ERAP program, newly minted to meet federal guidelines, Colorado’s previous rental assistance program saw success as well. Due to the successful advocacy of the Colorado Apartment Association, Colorado distributed approximately $72 million to housing providers for delinquent rent under the Colorado Emergency Housing Assistance Program and Property Owner Preservation programs between August 2020 and February 2021. These programs were initially funded by the CARES Act and later supplemented with state funds. During this period of time, Colorado experienced high collection rates in the mid 90 percentiles (about 1.5 percentage points below normal) and evictions remained at a 30-year low (about 50% of normal eviction filing levels).
While Virginia and Colorado’s programs may serve as a model for other ERAP grantees, more work must be done to support the industry and ensure that federal rental assistance dollars are distributed quickly and efficiently to housing providers and renters across the income spectrum who have been financially impacted by COVID-19. NAA continues to track the progress of rental assistance programs across the country and educate Administration officials and members of Congress about new developments, as the nation’s housing providers and their residents are depending on the ERAP program’s success.
For questions about emergency rental assistance programs, please reach out to Jodie Applewhite, Manager of Public Policy.