After Two Years, Promised Covid Rent Relief Still Lagging

It’s been almost two years since the United States Congress passed two rental assistance programs, Emergency Rental Assistance, December 27,2020 (ERA 1) allocated and a second Emergency Rental Assistance allocation (ERA 2) sending an additional $21.55 billion to the states on March 11, 2021, a total of more than $46 billion dollars. It seems like a long time ago. But at the time, while the funding was welcome, even then, the dollars seemed almost too late. By the end of the first year of the pandemic, many thousands of people had not been paying rent. Back then, it seemed like maybe, just maybe, the help would arrive in time to put out the fire of deliberate efforts by activists to use the pandemic to stoke “rent strikes” and to also help people legitimately harmed by the impacts of Covid. However, much of the money has still not reached its target.

In Washington State, two counties, Yakima and Spokane, lost $2 million in rental assistance because they failed to distribute the money. Yakima had already lost $1.1 million from their allocation earlier in the year. The story in Crosscut lays out the real and devastating impact.

“Erika Rutter, staff attorney at Yakima County Volunteer Attorney Services, previously told Crosscut that her clients – many of whom are farmworkers with limited English proficiency – had struggled to navigate complex paperwork requirements and secure in-person or phone appointments required to apply. Some who qualified for aid waited months or lost their homes in eviction proceedings while waiting for payments.”

The people in charge of the system blamed various things for the slowdown ranging having a paper system of accepting applications to lack of staffing. But the reason that two years later there is still ongoing pain for renters impacted by Covid can be reduced down to the imposition of eviction bans rather than rental assistance, and a refusal of government to treat assistance as an economic program rather than a social one.

Within days of the proposed shutdown, I urged rental assistance was the answer to job loss that would be caused by proposed lockdowns. On March 12, 2020, I wrote,

“An eviction ban now does nothing to replace lost wages, money that people used to pay all their bills. An eviction ban does nothing to help buy groceries. An eviction ban does nothing to fill prescriptions, put gas in the tank, pay student loans, or help folks back home. In a word, an eviction ban does nothing but defer rent costs to the future, a future that for almost everyone today is as unclear as when a vaccine for the virus might be found.”

We argued for months that bans would cause people legitimately scared about their future to hold back on making rental payments. The non-payer phenomenon was real if not wide spread. After two years I can say that the hardest hit renters were people living paycheck to paycheck in down market buildings. The problem is that many of these buildings were already barely breaking even. Fortunately, the financial stress on rental properties created by people not paying, others waiting for unemployment benefits, and others hoping for real rent relief didn’t lead to bankruptcies or foreclosures. In the end, most people paid their rent.

However, some people moved and left unpaid rent behind. Often those unpaid balances wound up in collections, following people who already have financial problems. In some cases, once bans expired, non-payers were finally evicted, and along with a big unpaid debt now have an eviction on their record. All of this could have been avoided had state and local officials done the right thing and allocated rental assistance right away rather than bans on eviction.

Secondly, state and local governments refused to treat rental assistance like the Paycheck Protection Program (PPP). The PPP effort used banks to distribute cash assistance to businesses. It worked because banks had the capital to distribute lots of money fast and to settle up loans later with forgiveness from the federal government. My organization proposed the following loan program to distribute relief to anyone at the federal, state, and local level that would listen:

• Housing providers will make a claim to their bank or local lender for the total amount of unpaid rent owed to them because of Covid-19 interventions creating loss of income;
• Lenders will advance the unpaid balance to the housing provider and the provider will notice the resident their rent is paid;
• Lenders will apply for grant funding under the rental assistance program in their state including any eligible overhead;
• Upon payment of the grant from the state to the lender, the lender will notice the housing provider that the issue is resolved;
• If the grant is rejected, the lender will make attempts to cure the application and if unsuccessful, can convert the advance of unpaid rent or any unapproved portion to a low interest loan; and
• The lender can charge the housing provider up to 5 % of the advance if it is successfully resolved for any additional overhead.

Instead states and local governments created byzantine systems of distribution using non-profits requiring contracts and screening based on criteria like ethnicity and geographic poverty levels. Housing providers couldn’t apply on behalf of residents, and many residents refused or couldn’t figure out how to apply. Meanwhile, more time went by as back rent built up all through 2020 and 2021.

The rental assistance program, both ERA 1 and ERA 2 are scandalous failures. What is even more scandalous is that the media and government at all levels have failed to conduct an investigation of what went wrong. Everyone was far more interested in 2020 and 2021 in the coming “eviction tsunami” in which billions of Americans would be evicted. Not only did the tsunami never happened, the fact that it didn’t was barely acknowledged. The press and government seemed to get bored with the Covid eviction story once it figured out few people were facing eviction. They moved on.

There isn’t much reason to, but we have to hope that if something like the Covid pandemic happens again, that someone at the federal, state, or local government will remember that the simplest and most compassionate thing to do when jobs are suddenly taken away by government action is to pay the rent in the most direct manner possible. If they want to know how, the answer is follow the example of PPP and use banks and lenders, not government agencies and non-profits.