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Housing Crisis Falls to States as Federal Aid for Rent Dries Up

June 14, 2022, 8:45 AM

Emergency rental assistance centers are abruptly closing nationwide as short-term federal aid dries up, leaving states scrambling to protect vulnerable renters facing sharp housing cost spikes.

Emergency rental assistance programs, which are intended to help renters avoid eviction especially during the Covid pandemic, were vital lifelines for renters of color, low-income residents, people with disabilities, parents with children, those who may not have retirement benefits, and immigrants.

Those groups will be among the hardest hit now that at least 150 of the emergency aid centers are closing or no longer accepting applications, rent prices are rapidly increasing, and affordable housing is scarce, said Haydar Kurban, a professor of economics and director at the Center of Excellence in Housing and Urban Research and Policy at Howard University.

The federal government pumped nearly $47 billion into rental assistance programs through the 2020 Covid relief package and the 2021 American Rescue Plan. However, those funds are disappearing either because they were spent or rental programs had to return any unused portion to the Treasury Department. The gap means states either put up more of their own money to keep people in their homes or watch the housing crisis deepen.

“The assumption that policymakers made is that Covid is over, and things are going to go back to normal. However, things are not going back to normal. The recovery from Covid is not happening at the same pace in every sector,” Kurban said.

Rent in May was 15% higher than this time last year, according to Redfin data, but places like Broward County, Fla., saw spikes between 20% and 50%, Kristi Hill, the human services administrator of the Family Success Administration division, said. Surging demand led Broward County to expand its rental assistance program as federal funds dry up.

Hitting Neediest Hardest

In Indiana, Black and brown families with children and low-income households weren’t confident they could make next month’s rent as of April 2022, according to Census data. Losing federal funds will only make that worse.

“The vulnerable people that were counting on this and other kind of government subsidies or support do not have income to replace that because either they don’t have jobs, or they don’t have any kind of support and on the top of that rent can now be increased and they will be, if not already, most impacted,” Kurban said.

The Indiana Emergency Rental Assistance program, one of two emergency aid programs still accepting applications, has boosted its housing counseling programs to help applicants address the root causes of housing instability, Rayanna Binder, the center’s director, said.

“We’re focused on providing funding for legal services and housing counseling because eventually the money is going to run out and there are going to be people in need who we’re not going to be able to serve because there is not going to be enough funding,” she said.

The emergency rental assistance center in the county serving Fort Wayne, Ind., closed in May. In Allen County, which includes Fort Wayne, nearly 32% of eviction filings in May were for Black and Hispanic households, according to data from the Eviction Lab. Black and Hispanic residents account for a combined 20% of the county population.

The city partnered with a nonprofit rehousing group to help residents get at least 12 months of rental assistance, said Kelly Lundberg, head of the Office of Housing and Neighborhood Services in Fort Wayne.

“Anybody that has become unhoused during the pandemic, our partner agency would work with them to, if eligible, provide a letter that states that we would cover rent for as long as they continue to be eligible at every three-month check,” Lundberg said.

Nine of Florida’s 32 rental assistance programs have closed, forcing some local governments to step into the gap.

Broward County broadened its relief for people facing rental increases they can’t afford. The expansion aims to cover three months of rent and the average amount that can be received is $8,300, Hill said.

Hill added that people who may not have qualified under the emergency assistance requirements, like those who had continued working throughout the pandemic and didn’t have hardships others had but face increases now, will more than likely benefit from this expansion.

Miami saw its average rent jump by 29% since last year, the fifth highest increase among metro areas. In response, Miami-Dade County, which is nearly 69% Hispanic, expanded its assistance program to help eligible residents cover rent hikes for a period of three months.

Knowledge Lost

The emergency aid was always meant to be temporary, but housing advocates fear vital expertise is being lost as rental assistance programs wind down.

“Even with reallocation that will help to extend some of the programs a little bit longer, there is not enough emergency rental assistance to meet the need of all the low-income renters in the country,” said Sarah Gallagher, the ERASE (End Rental Arrears to Stop Evictions) senior project director at The National Low Income Housing Coalition.” And even though there was a historic amount of investment, unfortunately, due to increasing housing costs, lack of affordable housing stock, there’s the need for permanent solutions.”

As the emergency funds dwindle, housing advocates shift their focus back to outreach efforts and one-on-one work with vulnerable tenants, said N. Giovanni Bush , an attorney with the Legal Services of North Florida.

“This new normal is not good because what you’re seeing right now for [renters in crisis], and what I’m concerned about, is no affordable housing and very low paying jobs for average tenants,” he said.

“You then have the stigma of eviction on many people’s records now who never had that, so they don’t have the opportunity and landlords don’t want to rent those people and then on top of that, there isn’t really any concentrated efforts in our community to make sure that those who are financially most at risk of homelessness are getting any funds or things that are tracking in their community.”

To contact the reporter on this story: Ayanna Alexander in Washington at aalexander@bloomberglaw.com

To contact the editors responsible for this story: Andrew Childers at achilders@bloomberglaw.com; Meghashyam Mali at mmali@bloombergindustry.com