Business & Economy

A new rental assistance program comes with new federal roadblocks

Michael Sirotkin
Sen. Michael Sirotkin, D-Chittenden, at Senate Economic Development, Housing and General Affairs Committee meeting in January 2019. Photo by Glenn Russell/VTDigger

Vermont is going to get $200 million for rental housing stabilization out of the federal budget that was passed late last year. 

That means it will be able to restart its stalled rental assistance program, which has paid out $21 million since the beginning of the summer.

But the new program comes with an array of complex federal rules that will make it more difficult for renters to apply and for state officials to administer, said Richard Williams, executive director of the Vermont State Housing Authority.

“I don’t want to be discouraging,” Williams told the Senate Economic Development Committee as he detailed information from the U.S. Treasury that was released Tuesday, but “it’s really going to slow down the processing of applications.”

Vermont’s rent stabilization program, which paid rent directly to landlords, came out of Vermont’s $1.25 billion share of the federal CARES Act, which was passed in March. It did not require means testing, and it paid back rent. It was also used to pay off 600 eviction cases that had reached the courts. 

The goal was to get money out as rapidly as possible to keep people in their homes. The average payment was about $2,000 per landlord, Williams said.

The new program is going to be operated along the lines of the existing federal rental assistance program, and will require renters to show proof that the pandemic is the reason they need assistance. It also requires proof of 2020 income to verify eligibility.

“This is going to be difficult because many people that are very low-income don’t even submit a tax form,” Williams said, and many don’t file their taxes before the April 15 deadline.

“You gave us a fair amount of flexibility” in getting the money out the door, Williams told lawmakers. “This was public health and no one wanted to see anyone lose their housing and become homeless. That flexibility is not going to be there under the new program, at least under the current outgoing treasurer’s determination.”

Leftover money

In October, the Scott administration asked all state agencies that had received Coronavirus Relief Fund money if they expected to have any left at the end of the year.  

Richard Williams
Richard Williams, executive director, Vermont State Housing Authority

Some did. Several agencies didn’t expect to spend all the CRF money because of federal restrictions, and some grant programs turned out to be undersubscribed. With applications dwindling, the Vermont State Housing Authority returned $3 million.

But in late autumn, after the Covid-19 infection rate rose, many of the Vermont businesses that had been operating at some level in the summer closed. The weekly federal $600 unemployment supplement ended in late July. The housing authority’s applications for rental assistance rose unexpectedly in the last quarter, and ended up with 1,500 applications seeking $2.8 million in assistance.

Williams requested that money from Senate Appropriations in the first week of the session.  

Reaching its target

Asked by committee Chairman Michael Sirotkin, D-Chittenden, if the state-run rental assistance program had reached small landlords and tenants who were truly in need, Williams said it had.

The housing authority surveyed 1,600 landlords, and more than 500 had responded by last week, Williams said. Nearly 95% of the respondents said they were private landlords, and half of those said they owned only one to four units. About 16% owned between five and 10.

“So you see we really did reach out to the private landlord, and that was the goal of the program,” he said. As for the renters who benefited, “these were lower-income households, no doubt about it.”

Vermont’s housing problems are severe. Home prices have risen sharply this year in some areas of the state, and 2,500 people in about 1,800 households are living in motels, according to the Vermont Office of Economic Opportunity — 1,000 more than in May.

The Vermont State Housing Authority program was effective in preventing evictions, Jean Murray, a lawyer with Vermont Legal Aid, told the committee. She said in a normal year, 150 eviction cases a month are filed; in 2020, she said, she saw only 50 cases a month.

“New evictions were very much slowed by the possibility of landlords getting payments,” she said. “About 75% of all eviction cases are for nonpayment, and once you take that away, there is no need for an eviction case.”

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Anne Wallace Allen

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