Should NC let landlords apply for pandemic rent aid? It depends on who you ask
The state legislature is considering a bill that would force rental assistance programs in North Carolina to accept applications from landlords, but that could slow down disbursement, a state official said.
The Housing Opportunities and Prevention of Eviction program, or HOPE, is the pandemic rental assistance program for 88 of North Carolina’s 100 counties. The 12 other counties — which comprise the most urban including Wake, Durham and Johnston in the Triangle — operate their own programs.
The programs are funded with rental aid money approved in federal stimulus bills from December and March, with the intention of keeping tenants housed if they lost income due to the pandemic.
The way the HOPE program works currently is that tenants apply, so that they can attest to the eligibility requirements. Landlords can refer their tenants to the program.
Laura Hogshead is head of the N.C. Office of Recovery and Resiliency, the agency that operates the HOPE program. She told The News & Observer that since landlords cannot honestly attest to their tenants’ income, allowing them to apply would slow the process because it would require an extra application system.
“We would have to reconfigure our system to allow for applications to pass back and forth between landlords and applicants,” Hogshead said. “Right now, we’ve built a system that runs on one train track.… If we’re building a parallel system where we need to, for lack of a better term, build switches between those two systems, it’s going to take significant development time.”
She said structural changes typically take four to six weeks to implement. Applications would not be accepted during that time.
HB110, the bill that would force this structural change, was first altered by the Senate to allow landlord applications. On Wednesday, the House voted unanimously not to concur with the amended bill.
“Still got some work to do. We’re going to bring it to conference and get it settled out so that everyone’s happy,” Republican Rep. Bobby Hanig said on the House floor. He is a co-sponsor of the bill.
Hanig and other co-sponsors — Reps. Mark Brody, George Cleveland and Jeff Zenger — did not respond to emails from the N&O seeking a response to Hogshead’s criticism.
Rep. Mark Pless, another co-sponsor, declined to comment until the bill returns from the conference committee.
All sponsors of HB110 are Republicans.
Landlord group advocates for bill
Republican senators who introduced the amendment said during hearings in September that the intention was to involve landlords more in the application process, The N&O reported.
But landlords can be involved by referring their tenants to the program, Hogshead said.
“There is a way for landlords to be very proactively and productively engaged in this process and that’s to come to our website, give us the names of their tenants and then we reach out and make them applicants,” she said.
Hogshead said over 5,500 landlords had referred tenants through this process, as of Tuesday.
Janae Moore, director of government affairs at the Apartment Association of North Carolina, said they support HB110, though she did say the landlord referral program was a step in the right direction.
“I don’t think it’s sufficient,” Moore said in an interview. “It still relies on the tenant to actively participate.… For our association, we appreciate all of the hard work that NCORR has done to modify and update the program to where it is today, but there are still gaps, and those gaps are extremely costly.”
Moore cited an AANC survey, taken in September, in which half of the 17 landlord respondents said they were unsatisfied with the program, though four of the respondents were in Mecklenburg County, where the HOPE program does not operate.
One of those four in Mecklenburg did work with the HOPE program last fall, when it covered all of North Carolina and was funded by the Coronavirus Aid, Relief and Economic Security Act, or CARES.
Hogshead criticized the survey for being too small of a sample size.
“We have written checks to 30,727 landlords in HOPE 2.0 just since May. That’s not including last fall’s program,” she said. “Landlords have cashed our checks. If they found — what’s half of 17? Nine? If they found nine unhappy landlords, OK, but we have 30,727 that have been happy enough to cash a check.”
Moore acknowledged that the sample size was small, but said those few landlords represent thousands of tenants.
She said one landlord had nearly 950 units. Another said they had over 2,000 tenants behind on rent.
“When you consider this, our survey findings should be given more consideration. I think it is misguided to ignore the findings based on the number of participants. The concerns are valid and indicative of real experiences that shouldn’t be minimized,” Moore said.
She said allowing landlords to apply would be a welcome change to the HOPE program even if it resulted in processing delays.
But Hogshead said the change would have negative consequences and eligibility would not be widened as a result.
“I want them to consider the bigger impact here. We are seeing people being evicted every day,” she said. “If you slow it down, fewer people get that check in time to avoid an eviction.”
Why income eligibility can’t be widened
Moore said one of the gaps that leaves some landlords out of the program is the income eligibility requirement.
Under U.S. Treasury guidelines, tenants must make 80% or less of the area median income, and they must have suffered financial loss due to the pandemic.
Moore said that income eligibility should be widened to include tenants who were eligible under the Centers for Disease Control and Prevention’s federal eviction moratorium. That order, which lasted for nearly a year, was struck down in late August by the U.S. Supreme Court.
The order applied to tenants behind on rent who had lost income due to the pandemic. Individuals also had to earn $99,000 or less a year. For joint filers, it was $198,000. Both figures are far above most median income figures; the median income for individuals in Wake County, for example, is just under $40,000, according to the Census Bureau.
“The process is not serving everyone that the CDC protected, and that should be the goal, the goal should be to help every tenant who was protected under the CDC moratorium,” Moore said.
Hogshead said Treasury guidelines do not allow states to expand income eligibility.
AANC’s parent organization, the National Apartment Association, is advocating that the federal government expand income eligibility requirements, Moore said.
What about abandoned units?
Moore said allowing landlords to apply would also cover instances where units have been abandoned during the pandemic. She said the current program doesn’t remedy this.
“Once that tenant leaves the unit, and they don’t share where they’re going, provide additional contact information, you now have a sitting unit, and you can’t turn over that unit,” Moore said.
In order for rental assistance to be awarded the tenant must still be living in the unit. HB110 allows aid to go to landlords even if the tenant has moved.
“What you have is months and months and months of back rent that is building up as a result of the pandemic,” Moore said.
According to AANC, the average unpaid balance for an abandoned unit is between $5,000 and $10,000. One landlord said in the survey that they had lost $1.1 million from abandoned units.
Hogshead said that’s not what the program is for.
“I recognize that what the Apartment Association is looking for here is just a check. Just give us a check for the rent we’ve lost. That’s not the goal of the federal program. The goal of the federal program is to keep tenants housed,” she said. “This is not a rent-replacement program.”
Hogshead said HB110 allowing aid to go to landlords when the tenant no longer resides there is not in line with the program’s goals.
“It’s not protecting the tenant. It’s not keeping the spread of COVID low,“ she said. “We are following what the federal government asked us to do, which is keep people safe in their homes.”
Eviction often drives people to shelters or crowded living spaces, at-risk settings that can cause COVID-19 to spread easily.
Moore said the goal of the program should be to help everyone impacted by the pandemic, including landlords with abandoned units and those whose tenants don’t meet the current income requirements.
“Those tenants are still in need of assistance. Those housing providers are still operating at a deficit. It does these individuals a disservice to pretend that demographic does not exist,” she said in an email response.
This story was originally published October 22, 2021 at 12:51 PM.