Local Leaders Grapple With Federal Red Tape As They Try To Quickly Distribute Rent Relief Funding

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Throughout the pandemic, the federal government has relied on states and local jurisdictions to quickly get rent relief to tenants — but some local leaders in Maryland have had to get creative to work around red tape and other legal requirements slowing down that process.

It’s difficult to quantify exactly how much rent relief funding has gone to tenants in Maryland since the onset of the pandemic: A slew of federal relief efforts, from the CARES Act last year to the more recent American Rescue Plan Act, have earmarked funding for rent relief, and local jurisdictions have adopted a variety of methods to distribute that funding.

A recent U.S. Treasury report on Emergency Rental Assistance Program (ERA1) funding from the Consolidated Appropriations Act found that Maryland’s state government lagged behind others in terms of distributing funding, although the state and local governments have picked up the pace in recent months. That report doesn’t account for other funding sources, such as state and local funds or other congressional stimulus packages, but signifies that just because rent relief funding is allocated doesn’t mean it will immediately head toward tenants and landlords to prevent evictions.

Advocates for tenants say rent relief funding isn’t getting out quickly enough. Carol Ott, the tenant advocacy director at the Fair Housing Action Center of Maryland, said courts are speeding through eviction hearings and noted that federal and state protections for tenants — allowing an affirmative defense in certain cases — are set to expire soon.

The federal moratorium on evictions expires on Saturday, despite last-minute attempts in Congress to extend the deadline on Friday.

A state moratorium will expire Aug. 15.

Ott said the lengthy rental applications are cumbersome for tenants, many of whom apply as a last resort to avert an eviction.

“There’s just way too many steps in my mind,” Ott said. “There’s a lot required as the tenant whereas I feel like there’s less required of the landlord.”

Montgomery County Executive Marc Elrich (D) told Maryland Matters that local jurisdictions have little control over the lengthy rent relief application process. He said ever-changing federal guidelines on how to distribute different pots of rent relief have only further complicated local efforts to stave off evictions.

“The federal government managed to create guidelines that make it harder to get money out, even though they gave us the money,” Elrich said. “It still wasn’t like we could just use our existing programs and keep pushing money out through the windows or programs we already had. We had to reconfigure this.”

Requirements for rent relief eligibility even differ slightly between the Consolidated Appropriation Act’s ERA1 and the American Rescue Plan Act’s ERA2 funding streams, according to guidance from the U.S. Treasury Department.

Ilana Branda, the deputy chief of Montgomery County’s Services to End and Prevent Homelessness, said she and her staff have to constantly monitor the U.S. Treasury guidance and keep their rent relief programs up to date. She said separate guidance on distributing rent relief funds was issued by federal officials in February, March, May and June.

“Each time we are trying to make sure that we are adapting and ensuring that our program continues to comply with Treasury guidance,” she said.

On top of dealing with basic eligibility guidelines, Branda said local officials also have to audit the disbursements on a rolling basis. She said distributing rent relief funding isn’t like when individuals submit taxes to the Internal Revenue Service and potential audits take place after the fact.

“We have to do all the fraud protection from the beginning, we have to do all the vetting and review of it before that check actually goes out, and that’s gonna take time,” Branda said.

Maryland Department of Housing and Community Development (DHCD) Assistant Secretary Carol A. Gilbert told members of the House Environment and Transportation Committee this week that, for ERAP1, households are eligible for rent relief if they can prove that they meet all of the following requirements:

  • They are obligated to pay rent on a residential dwelling.
  • They have a household income at or below 80% of their area median income as defined by the U.S. Department of Housing and Urban Development.
  • One or more individuals in the household qualified for unemployment assistance or the household experienced financial hardship either directly or indirectly resulting from the pandemic.
  • They can demonstrate a risk of housing instability, which can be proven by a past due utility or rent notice or other evidence.

Additionally, ERAP funding requires prioritization to households under 50% of the area median income or who include an adult who was unemployed for 90 days before the application, Gilbert said.

“For the most part, these eligibility components must be supported by documentation,” she said.

Gilbert said the state is working with local governments to simplify and streamline tenant eligibility and screening processes for both rental and utility assistance.

“We’re not adding unnecessary bureaucratic requirements,” she said. “It’s already hard enough to qualify eligible households and document the process prior to the reward. We really are focused on maintaining a low-barrier approach.”

The state’s eight largest jurisdictions received a combined $143,498,208 million in ERAP1 funding directly from the treasury, and most already had an existing rent relief process in place, according to Gilbert. In addition to that direct funding, the DHCD also received nearly $193 million to distribute to local jurisdictions statewide, $40 million for its own Assisted Housing Relief Program, $20 million for rental assistance reserve funding and roughly $5.1 million for administrative and outreach costs.

More granular data from the legislative briefing shows how much funding Maryland counties have so far distributed: $38.54 million in ERAP funding to 5,458 households statewide, though those totals don’t include administrative costs or housing stability services. (That figure also doesn’t account for rent relief using local, nonprofit or state funding sources, or funding from other federal relief efforts.)

The state has so far distributed $10.67 million to 2,776 households, according to Gilbert, with more than $24.96 million expected to be distributed in August.

In total, state and local governments received roughly $401.5 million in ERAP1 funding.

The state and local governments are expected to receive more than $350 million in ERAP2 funding. At least 90% of that funding will have to be spent on financial assistance, and up to 10% can be spent on “housing stability services.” Officials will have until September 30, 2025 to distribute that funding.

Some fair housing advocates say state and local governments need to take a more holistic approach to preventing evictions: William J. Roberts, the chair of the Montgomery County Renters Alliance board of directors, wrote in the Washington Post that some rent relief funding could be used to set up eviction diversion programs and support “early, direct outreach and guidance to hard-hit rental communities to inform renters of their rights and connect them to resources.”

Elrich and other local leaders previously asked Gov. Lawrence J. Hogan Jr. (R) to issue a temporary moratorium on evictions while they stood up rent relief programs, but no such order was issued. Hogan’s eviction protections for tenants, which allow an affirmative defense in certain types of eviction filings, are set to expire Aug. 15.

Elrich has long warned of a potential “tsunami” of evictions if additional protections aren’t put in place, but said he feels his warnings have gone unheard. The General Assembly considered a slew of additional protections for tenants during their 2021 session, including extending protections after the end of a catastrophic health emergency, but those legislative efforts failed on the last day of the 90-day legislative session.

Montgomery County brought on roughly 40 additional staff dedicated to COVID-19 rent relief, but Branda said there has still been a “strain” on the department while the county government tries to quickly work through rent relief funding.

“It’s not like a hurricane or somebody’s house got blown down that you can identify,” Elrich said. “This is having to make assessments about people’s incomes and the impact of their incomes on their ability to pay bills.”

Branda noted that county officials have years to distribute ERA1 and ERA2 funding, according to federal requirements, but said that “no one wants to wait until then to give out the money.” She said county officials are working constantly to process rent relief applications in a bid to avert evictions.

“The back rent is due today,” she said. “You can’t wait.”

A bundled approach

Branda said the county is also working toward a way for landlords to submit rent relief information in bulk rather than having tenants apply individually for the funding. That streamlined method has also been used in Baltimore County, which partnered with the United Way of Central Maryland to work directly with landlords to quickly distribute funding.

Baltimore County’s new director of Housing and Community Development, Terry Hickey, said the county’s Strategic Targeted Eviction Prevention (STEP) program with United Way works with local landlords to bundle large numbers of eligible tenants together to streamline rent relief. United Way recently expanded that program to include Baltimore City as well as Harford and Howard counties.

Hickey said the county also offers individual applications as part of a two-pronged strategy for distributing rent relief funding.

“It gave us more time to start to roll out support for an individual tenant portal, which I think everybody across the country has had logistics issues when you’ve got individual tenants being required to put all of this documentation together in order to get funds,” he said.

Hickey said he thinks each successive round of federal funding has allowed local governments more flexibility in distributing funds, but said Baltimore County officials have also struggled with shifting requirements with different federal funding sources.

“If I’ve got [Community Development Block Grant] money, which is what we were using well before ERAP, that’s only six months of rental assistance,” he said. “Then you get the ERAP money in and you have to go through supplemental appropriations while you’re helping people that now have more than six months rent.“

An estimated 129,000 households in Maryland are behind on rent in Maryland, according to the National Equity Atlas, which uses data American Community Survey, U.S. Census Bureau’s Household Pulse Survey and California’s Center for Economic and Social Research’s “Understanding Coronavirus in America” panel survey. An estimated 78% of those households are people of color, and 62% make less than $50,000 a year.

In the courts

At the House Environment and Transportation briefing, John P. Morrissey, the chief judge of the state’s District Court, said courts have accepted eviction filings throughout the pandemic. Morrissey said eviction filings are currently down about 33% compared to before the pandemic. Additionally, the state has about 4,500 reserved judgements for failure-to-pay rent cases where tenants raised federal and state emergency orders to temporarily stave off evictions — at least temporarily.

Morrissey said that even now, courts will be moving forward at a slower pace than before the pandemic.

“We cannot put as many people in dockets as we did in the past,” he said.

Evictions and filings are still moving forward, said Carisa Hatfield, an attorney with the Homeless Persons Representation Project. Hatfield said more than 285,000 failure-to-pay rent cases were filed in the state between July 2020 and May 2021, as well as a combined 7,309 each of least and tenant holding over cases. From those cases, 14,147 warrants of restitution were filed and 4,601 evictions took place, Hatfield said.

Hannibal Kemerer, the legislative director for the Maryland Office of the Attorney General, warned lawmakers that Maryland’s eviction rate has exceeded neighboring states in recent years. Kemerer said there has been a “significant delay” in getting rental assistance to households since the onset of the pandemic.

Kemerer noted that the General Assembly passed an access to counsel initiative for tenants in eviction cases during the 2021 legislative session, but failed to pass a separate bill that would’ve funded the legal representation. He said some of the emergency funding could be used to fund access to counsel for tenants.

“Housing stability services that include the provision of legal representation in eviction proceedings is critical to keeping people in their homes during the pandemic,” he said.

Kemerer said some local jurisdictions, such as Anne Arundel County, are already working to provide some tenants with legal counsel in eviction cases.

A full list of local and state rent relief programs can be found here.

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