Bill meant to help landlords would slow pandemic rent aid disbursement, official says
A bill in the North Carolina state legislature that would allow landlords to apply for rent aid on behalf of tenants would inadvertently slow disbursement, a state official told The News & Observer Tuesday.
HB110, if passed by the legislature and signed into law, would let landlords apply for rental assistance if they have lost income from tenants due to the pandemic. The aid would come through North Carolina’s Housing Opportunities and Prevention of Eviction program, or HOPE.
Currently, landlords can only refer tenants to the HOPE program. The N.C. Office of Recovery and Resiliency, which operates HOPE, then contacts the tenants to work with them on applying for assistance.
Laura Hogshead, head of NCORR and the HOPE program, told the N&O that the bill would cause administrative delays as the application process would bounce between landlord and tenant instead of the process going through one party.
“This will slow the process down,” Hogshead said.
This is because federal guidelines require that tenants assisted be at 80% or below the area median income and have lost income due to the pandemic. Only the tenant could honestly attest to this, Hogshead said.
If the bill becomes law, it may require HOPE to change its entire system, she said.
“Typically, major developments like this take four to six weeks,” Hogshead said.
The changes to the HOPE program would be through an amendment to HB110 approved by the Senate Commerce and Insurance Committee Tuesday.
The bill now heads to the Senate Rules Committee, which is the final step before it goes to the full Senate for a vote. If it passes the Senate, it must pass the House again before going to the governor.
Sen. Chuck Edwards, a Republican whose district covers Buncombe, Henderson and Transylvania counties, said at the hearing that the amendment was meant to streamline the process for landlords.
“I certainly believe there’s a better way that we can help administer these funds, and make landlords more whole than we are today. First of all, by simply allowing landlords to apply for these rents on behalf of the tenants,” Edwards said.
“The landlord would have the security or the peace of mind knowing that those actions are taken because right now, they’re not involved in the process until they get a check from the US Treasury,” he said.
Hogshead, who attended the hearing, said Edwards and other legislators are misinterpreting how the landlord referral program works.
“It is not a process whereby the landlord tells the tenant about the program. It is a process by which the landlord tells the state that they have a tenant that they believe is eligible,” she said at the committee hearing. “And then we, the state, reaches out to that tenant who may no longer be talking to their landlord, and we encourage them to apply, and we walk them through the application.”
She said NCORR, as of Monday, has reached out to over 2,500 tenants referred by landlords since the program started accepting referrals in late July.
“I don’t know of anyone who hasn’t paid rent for several months who wants to take a call from their landlord, but they might pick up the phone for us because we are offering help,” Hogshead said in an interview. “It’s a very effective way for landlords to be involved and for us to get that tenant to make an application.”
Hogshead said she was frustrated by the lack of communication on the part of legislators prior to introducing the amendment.
Hogshead said she had not read the amendment before it was approved, as NCORR was not given a copy.
“It would be more productive to be having conversations based in fact about what the program is and what the program isn’t. They are not communicating with us and not allowing us to brief them,” she said in an interview with The N&O. “They’re working under some misconceptions that we could easily clear up if they would open those lines of communication.”
Supreme Court strikes down moratorium
A delay in disbursement would come at a time when an estimated 400,000 households have no confidence they can pay the next month’s rent, according to a household pulse survey from the U.S. Census Bureau ending Aug. 16. The survey was based on a small sample size, so the actual number may be much different.
And eviction protections have ceased after the U.S. Supreme Court, in an unsigned opinion late Thursday night, struck down a federal eviction moratorium issued by the Centers for Disease Control and Prevention that wasn’t set to expire until Oct. 3.
The CDC order, an altered form of the nationwide moratorium that lasted from last September until the end of July, barred evictions for nonpayment against people who have attested they have lost income due to the pandemic and are unable to pay rent.
The tenant must also have lived in a county with high or substantial spread of COVID-19. At the time the order was struck down, that included all of North Carolina, according to the CDC.
NC compared to other states
Millions of dollars in rental assistance that was allocated to state and local governments through federal pandemic stimulus programs is sitting unspent in both the HOPE program and county-level rental programs, the N&O previously reported.
But even with the millions unspent, North Carolina has spent the sixth most in federal rental aid, as of the end of July, among all states.
Of the $546.6 million allocated to North Carolina from the December stimulus, the HOPE program had administered 24% at the end of July, data from the U.S. Treasury show. That’s the seventh highest portion among statewide programs in the country.
As of July 31, the HOPE program has assisted the second most households among statewide programs, behind only Texas.
A state Senate bill from May only allows $396 million of the state allocation to be spent by HOPE in 88 of North Carolina’s 100 counties. The rest of the $546.6 million goes to 12 counties and five tribal governments that have their own federal allocations due to meeting a population threshold.
Of the $396 million, the HOPE program has spent $220 million as of Tuesday, or 56%. It has obligated another $70 million to landlords and tenants.
Currently, the average time from application to payment is 14 to 19 days, Hogshead said at the hearing.
“This program is fast, and it is working,” she said.
Other provisions in the bill
HB110 would also require that the HOPE program cover the costs of a hotel or motel room for households that have been displaced from their primary residence if the household would qualify for assistance under other requirements.
Previously, the state legislature passed a bill that would allow hotels to bypass the courts to evict residents, The Charlotte Observer reported in July.
Cooper vetoed that bill.
As amended, HB110 would also require HOPE to cover accrued late fees on the landlord’s behalf and allow renters to apply for only utility assistance. Currently, tenants have to eligible for rental aid to receive utility assistance.
It also requires that assistance be limited to 12 months. NCORR may provide an additional three months to ensure housing stability, the bill states, if funds are available.
Hogshead said NCORR would have to ensure these changes follow Treasury guidelines, but she said she anticipates they can be made.
“We’re going to see potentially eviction courts fill up and we’re going to see folks lose their home that might not otherwise. And these elements of these amendments and this bill allows more funds to be distributed so that more folks can stay in their homes and not be displaced,” Edwards said.
This story was originally published September 1, 2021 at 5:45 AM.