Alabama’s slow-moving emergency rental assistance program (ERAP) is confounding federal regulators and “strangling” renters, critics say.
According to a report by AL.com, Alabama has spent more than $6.3 million to Horne, a private contractor, to administer its ERAP funds. In turn, the company sent $23.3 million to needy households, representing less than 10% of the state’s total funding from federal relief legislation.
At the end of September, officials with the Alabama Housing Finance Authority (AHFA) told a state oversight committee that the state’s program expects to pay out nearly $20 million per month for the rest of the year. In most cases, the money will go directly to landlords and property managers, they said.
According to a report by the Alabama Daily News, the state housing authority has received more than 71,000 ERAP applications. Meanwhile, more than 44,000 have been withdrawn for various reasons, while others are still under review.
However, some lawmakers were not happy with the progress the authority had already made. Alabama Sen. Rodger Smitherman (D-Birmingham) urged AHFA to hire more people to administer the program.
“We’re strangling [renters] We’re actually strangling them,” he told AL.com.
AHFA told state regulators that they set aside more than $26 million in total to pay Horne for its services. Officials also told AL.com that Horne has “significant experience and specialty in this industry and was poised to launch quickly, and we have been pleased with their work.”
Federal regulators have previously pushed Alabama officials to find more efficient ways to distribute its ERAP funds.
In early September, Rep. James Clyburn, who chairs the House Select Subcommittee on the Coronavirus Crisis, penned a letter to state officials asking why the state isn’t doing more to spend the funds.
“Alabama’s distribution of federal rental assistance funds has been far too slow,” the letter reads in part. “The state’s sluggish distribution of assistance comes in the face of significant need.”
At the time, Clyburn cited Census Bureau data showing that more than 90,000 renters in Alabama were behind on rent. Since then, the number of renters who have no confidence in their ability to make next month’s rent has grown to more than 96,000, according to the latest federal data. People between the ages of 25 and 39 represent more than half of that total.
Another 25,000 renters report being “very likely” to be evicted within the next two months. Of that total, more than 11,000 renters are more than three months behind on their payments.
Property Manager Michelle Cummings in Huntsville helps her tenants apply for ERAP. She says Alabama’s program has kept several tenants waiting for months.
“I don’t think that they have a good process in place,” Cummings told AL.com. “You’re under review, and then when your case manager finally calls you, then they need something else, and then you go back under review.”
One reason the program is underdelivering for needy renters is that several real estate groups like the Alabama Association of Realtors (AAR) actively fought against the federal eviction moratorium until the Supreme Court struck it down in mid-September. They argued that allowing people to stay in their homes without paying rent during a pandemic equated to “illegal taking” of property.
In response to the ruling, AAR released a statement praising the High Court’s decision:
“The United States Supreme Court’s decision is the correct one, from both a legal standpoint and a matter of fairness. It brings an end to an unlawful policy that places financial hardship solely on the shoulders of mom-and-pop housing providers, who provide nearly half of all rental housing in America, and it restores property rights across the country.”
According to an investigation by Alabama Public Radio, other logjams include the documentation Alabama asks for from applicants and other red tape measures. Some examples include providing AHFA with a copy of a rental agreement or documents proving that a renter has a job.
Meanwhile, federal guidance allows the U.S. Treasury to start clawing back sums of money that remain unspent in larger states like Alabama and reappropriate them to smaller states that have used at least 65% of their funds. That program began on September 30, meaning renters in Alabama may receive fewer aid dollars than anticipated.
How You Can Help
The pandemic proved that we need to rethink housing in the U.S. It also showed that aid programs work when agencies and service organizations are provided with sufficient funds and clear guidance on spending aid dollars.
Contact your local officials and representatives. Tell them you support keeping many of the pandemic-related aid programs in place for future use. They have proven effective at keeping people housed, which is the first step to ending homelessness once and for all.