Congressional committee questions Alabama’s ‘slow’ distribution of rental assistance

Congressional committee questions Alabama’s ‘slow’ distribution of rental assistance

By MARY SELL and CAROLINE BECK, Alabama Daily News

MONTGOMERY, Ala. – About $15.5 million in pandemic Emergency Rental Assistance had gotten to 2,308 Alabamians as of last week, according to the Alabama Housing Finance Authority, the entity charged with distributing up to $263 million in federal funding.

As of Sept. 1, 35,664 applications had been withdrawn because the applicants started but failed to complete the application process, the authority said.

Meanwhile:

  • 950 applications have been denied;
  • 5,389 applications have been deemed viable for final review;
  • 7,468: applications are in various stages of follow up with applicants for missing or incomplete information;
  • 12,135: applications remain started by applicants but have yet to be fully submitted.

The authority provided Alabama Daily News with this data in response to questions about a letter it and Gov. Kay Ivey received last week from U.S. Rep. James Clyburn, D-S.C., chair of the House’s Select Subcommittee on the Coronavirus Crisis. He wants to know why Alabama hasn’t been quicker in distributing the millions of dollars in rental assistance to those who need it.

“Alabama’s distribution of federal rental assistance funds has been far too slow,” Clyburn wrote. “… The state’s sluggish distribution of assistance comes in the face of significant need.”

As of early July, more than 90,000 Alabama renters were behind on rent, more than half of them saying eviction in the next two months, according to the document. Meanwhile, the U.S. Supreme Court last month ended the moratorium on evictions put in place earlier in the pandemic.

“We have been working diligently to get assistance to those in need,” AHFA spokeswoman Kristi Gates told Alabama Daily News. “We were one of the first in the nation to set up a statewide program from scratch, and we’ve accomplished much in a short amount of time. Each day/week/month the number of applications funded and dollar amount allocated to applications increases over the previous.

“Still, we know many are facing the very real possibility of eviction or utility disconnects due to financial hardships caused by the pandemic. We are committed to providing this vital assistance to eligible Alabamians as quickly as possible while also adhering to Treasury’s program guidelines and requirements.”

About $9.7 million was distributed in August, up from $2.5 million in July. Distribution began in March.

Dev Wakeley, a policy analyst for Alabama Arise, and told ADN that there are multiple reasons for the delays in funds reaching in-need Alabamians but is mostly due to the complicated application process.

“What we’ve been seeing is that a lot of jurisdictions have problems getting these applications finished, in part because they’re having difficulty shepherding folks through the application process and once they’re finished, there’s still a backlog in the processing side,” Wakeley said.

But Wakeley said Mobile County has seen great success in processing applicants due to their partnership with Legal Services Alabama who has provided personnel to specifically handle rental assistance applications.

Michael Forton is the director of advocacy for Legal Services Alabama, which provides civil legal aid to low-income Alabamians. He said LSA works with the housing authority to help people with their emergency assistance applications and has easily seen double the amount of people with eviction or rent concerns since the pandemic started.

“Partially I’m sure it’s the pandemic and people have financial stress and more people have problems, but it also just seemed like with the moratorium people also became far more aware that there were legal solutions to problems they weren’t really aware of before,” Forton said.

He also said the amount of people applying for assistance is not something the state was set up to handle and the lack of manpower to process the claims is leaving applicants who do qualify for assistance waiting months for the funds.

“There’s just a whole lot of people who went from kind of in a holding pattern waiting for rental assistance to be paid out, to being kicked out, and the real shame is there is a ton of money out there,” Forton said.

The authority contracted with Horne LLP, a Mississippi-based CPA and advisory firm, to help distribute the funds.  Information on how to apply for aid and needed documents can be found here.

Clyburn’s letter pointed to some best practices for distributing the money more rapidly. It also asked Ivey and AHFA to respond by today to several questions, including: Steps taken to improve the distribution process; the number of rental assistance applications received and approved; the amount of rental assistance funds dedicated to program administration.

Ivey’s office deferred questions about the letter to the AHFA. Gates said a response to Clyburn’s letter is being drafted. 

She told ADN the authority this year had to build from scratch the distribution infrastructure, including an online application portal, consistent with U.S. Department of Treasury requirements.

On March 1, the first day the program opened, AHFA received more than 10,000 entries on the online system, Gates said.

“By the end of the first month, we were up to 50,000 entries into the system,” she said. “All submitted entries had to be first prioritized according to Treasury mandated guidelines, especially for those entries with income at or below 50% of the area median income.”

Each application goes through a multi-step vetting process that requires contact with not just the applicant, but also the landlord and sometimes utility providers.

“Likewise, the funding process involves multiple transactions per application concerning payments to landlords, to property management groups, and to various utility companies,” Gates said.

Congress, through last year’s Consolidated Appropriations Act and this year’s American Rescue Plan Act, has authorized more than $46 billion in emergency rental assistance to help people avoid evictions. 

Gates said Alabama’s allocation is not based on need or the number of renter households in the state. Instead, it is based on census data for the entire population of the state – renters and non-renters. Treasury anticipated that funding would exceed need and included a claw back provision to reallocate excess funds as early as this fall.

Separate from the state’s allocation, $63 million was sent directly to local jurisdictions, including Jefferson County and Birmingham.

The Associated Press recently reported about 3.5 million people in the U.S. as of Aug. 16 said they face eviction in the next two months, according to the U.S. Census Bureau’s Household Pulse Survey.

The Treasury Department recently said that just over $5.1 billion of the estimated $46.5 billion in federal rental assistance — only 11% — has been distributed by states and localities through July.

Wakeley pointed to the recent comments made by Attorney General Merrick Garland calling on states’ judges and courts to direct more people to their state’s rental assistance programs rather than approving evictions.

Wakeley said the assistance funds are meant to help landlords as much as they are meant to help renters.

“This really is a win-win for everybody,” Wakeley said. “The landlords are going to get paid, people are going to be in their housing, safe, leading into winter as the delta variant rampages throughout the state as opposed to being out on the streets.”