Eviction Moratoria and Rental Assistance

9 min read

Landlords Helping Tenants Negotiate Complicated Rental Assistance Program

Affordable housing owners and managers are working hard to help their tenants tap unused Federal Emergency Rental Assistance Program (ERAP) funds to stay current on rental payments, and many of them have been doing this since the program rolled out. The program has been slow to start, but officials point out that just a small fraction of those seeking help have been denied. And as property owners and managers navigate what, at times, has been a chaotic process, the Centers for Disease Control (CDC) has extended its eviction moratorium by two months – and some states even longer. Just as time was running out on the clock, properties find they now have a little more time to make a full-court press to connect their residents with the money they need to pay the rent just as the pandemic starts to flare up again in the United States.

There is good reason to be offering this kind of assistance. “There’s a lot of money in the pipeline,” says Harry J. Kelly, partner in the Washington, DC office of law firm Nixon Peabody LLP, with news reports saying just $3 billion of a pot of $46 billion had been tapped by the end of July. But he also notes, “There’s a lot of local variation from state to state,” calling the bureaucratic pipeline “frustrating.”

Kelly says landlords should be helping their tenants deal with a complicated process and says that before any evictions occur, it would be helpful if judges required some type of certification that the tenant and/or landlord has applied for but were unable to receive assistance. He adds that nothing in federal law requires that sort of certification, but that in New York State, tenants are allowed to raise a COVID-related hardship defense, and judges are not allowed to order an eviction if a tenant has suffered such a hardship during the period specified by state law.

Extensive Efforts to Help Tenants
Angie Hug, senior vice president of operations at Kittle Property Group in Indianapolis, details the extensive efforts her firm has made to help many of its 18,000 tenants in 159 communities across 19 states that are in arrears connect with rental assistance.

Early in the pandemic, its marketing team sent out daily electronic blurbs about rental assistance and printed out flyers near the common areas of the communities “to get the word out on what was going to be coming,” she explains.

When the programs in different states began to roll out, a vigorous grass roots campaign began. “We put out huge yard signs to advertise rental assistance was available,” she says. Kittle kept community offices open during the pandemic to assist residents.

It wasn’t just local personnel who helped out. “We had corporate team members really involved. So when one county rolled out, we had open houses.”

“We definitely make a lot of phone calls. We knock on doors,” she says. Emails and flyers are used. Kittle residents without computers can use the community business centers to log on, and the computers have home pages that will take them straight to the rental assistance portal.

But when a significant number of residents did not contact managers, “probably the most unique thing we did was to offer them Visa gift cards just for signing up. In some properties, that was huge.”

Hug says more than 50 percent of tenants behind on their rent have responded to Kittle’s outreach.

And the program has had some success. Hug says Kittle has received, at least, some payments in each of the states it has communities in. “It’s great when it pays the full past balance and three months in advance, because it really gives that tenant time to plan for the future,” she says.

The programs vary widely. Some states pay 12 months of past rent and three months for future rent, she says. One county (Marion County, IN) only paid three months in past rent, but just changed that to 12 months.

She says total current delinquency in Kittle’s portfolio is about 26 percent of renters at the beginning of a month and 5.2 percent at the end.

“Our unpaid residents are running about 2.5 percent higher than we were pre-pandemic,” she says. “Our largest portfolio affected is workforce housing. A lot of our residents worked in the service industry.” And some of those residents above 80 percent of area median income don’t qualify for rental assistance.

“Our ultimate goal is to keep our residents housed while also fulfilling the commitments we’ve made to our investors,” she says.

A Robust Effort
Paula Prahl, vice president of public affairs at Plymouth, MN-based Dominium, also details a robust effort to help tenants.

“We’ve been helping tenants throughout the pandemic with payment plans, partial plans, we got rid of late fees and we’ve been helping them apply for rental assistance,” she says. “We’ve been helping a fair number of them. It’s been one-on-one support.

The application has been individual helping individual getting it through the process. It’s been community managers and other staff onsite.”

As the pandemic set in last March, Dominium set up an interactive website for each state Dominium is in to help tenants access unemployment benefits and the direct COVID assistance provided by the federal government.

She shares some data on tenant experience in the four biggest states Dominium has properties—Minnesota, Texas, Florida and Georgia.

Out of 23,131 units in those four states, 1,531 units (about seven percent) are delinquent an average of $2,940. A total of 835 of those delinquent tenants (defined as more than 30 days late and owing more than $500) have filed for assistance, she says. Dominium’s total portfolio is about 32,000 units.

The tenants in those four states have applied for $5.1 million in rental assistance, and Dominium has collected $1.7 million, meaning about two thirds has yet to be paid (some of it needs to be approved first). Texas has been the most efficient of the four states in paying out assistance at 58 percent, Prahl says, and Minnesota the least effective, at 20 percent.

Dominium is confident it will collect much of the outstanding debt. “We can’t figure out why we wouldn’t,” Prahl adds. “It’s just the time that it’s taking to do it.”

Landlords Get Recognition
Landlords have gotten recognition for these kinds of determined efforts by the National Council of State Housing Agencies (NCSHA), which published an open letter giving a nod to “your extraordinary efforts to keep millions of low-income Americans safely housed during the pandemic, especially the millions who have been unable to keep up with their rent.”

NCSHA acknowledges the difficulties in accessing the federal rental assistance program but urges landlords to help their tenants do so despite the obstacles.

“Landlords large and small have forgiven past-due amounts, provided payment plans and helped renters access relief programs. You and your companies have made major financial sacrifices yourselves, dug into property reserves and restructured financing arrangements with your capital providers,” the trade group writes.

Stockton Williams, NCSHA’s executive director, says that, while still small, the pace of rental assistance payments has been increasing, and that denials to date have been less than five percent.

“Not only has the pace increased significantly, but looking at the state programs, many of them have funded 40 to 50 percent of the applications they have received,” he says. The average was about 35 percent, while denials have been less than five percent, he adds.

One factor keeping the numbers low is that a small fraction of landlords and renters knew this assistance was available, something that may be changing now, Williams notes.

He says the market-rate and affordable markets have fared relatively well, and that eviction concerns are greatest in the small owners/small properties segment. These landlords are least likely to be connected to trade groups and other sources of current information.

Some sources say the amount of need may be less than the $46 billion allocated. Recent estimates of aggregate back rent include PolicyLink ($21 billion) and the Philadelphia Fed ($15 billion rent plus utilities).

“It doesn’t mean we don’t have a dire crisis for millions of renters,” Williams adds. “We absolutely do.”

“We are very confident that the amount of spending (on assistance) will increase,” notes Williams. “There are some huge states with large allocations of funding that have finally gotten started.”

A Chaotic Rollout
A notable amount of chaos accompanied the CDC’s most recent extension. The Biden administration kicked the ball over to Congress with just two days before the July 31 moratorium expiration, and Congress promptly kicked it back to the White House, which turned to the CDC. The agency pegged a new moratorium to public health policy, trying to stem evictions to mitigate the spread of the virus in those places suffering from high levels of COVID during its current resurgence.

The CDC’s extension—to October 3 as of press time—remains vulnerable to being challenged in court, and already has lost one case in the Supreme Court. The current extension required a good bit of analysis and translation to local landlords and tenants as to what it entailed and even who it applied to.

For instance, Eric Shupin, policy director for Boston nonprofit Citizens Housing and Planning Association, tweeted to his followers the extension “protects most, but not all renters in MA.” The moratorium only covers renters in counties with ‘substantial’ or ‘high’ transmission rates of COVID.

“If your county falls out of the ‘high’ or substantial rates for 14 days, you would no longer be protected by the moratorium.”

Two of Massachusetts’ counties, Franklin and Hampshire, did not meet those criteria at the time the extension was announced, Shupin notes.

Illustrating the topsy turvy nature of the rollout, he concludes, “If you live in Boston or Lawrence, you’re protected. If you happen to live in Greenfield or Northampton, unfortunately, you’re not covered by the moratorium.”

Eviction Moratorium update from Harry Kelly,”Supreme Court Nixes CDC Eviction Moratorium.”

Mark Fogarty has covered housing and mortgages for more than 30 years. A former editor at National Mortgage News, he has written extensively about tax credits.