Officials Say Rental Relief Programs on Track to Leave Millions Unspent

Government

Officials Say Rental Relief Programs on Track to Leave Millions Unspent

Officials at the San Diego Housing Commission and San Diego County say their rental assistance programs are on track to leave a significant amount of money on the table.

Volunteers prepare to distribute information about the COVID-19 Housing Stability Assistance Program. / Photo by Adriana Heldiz

The San Diego Housing Commission now estimates that millions of dollars allocated for rental assistance for San Diegans struggling amid the pandemic – perhaps even more than half the total funds – might go unspent. The county, meanwhile, said it’s possible it also will leave a significant amount of rental assistance money on the table.

Housing Commission staffers are basing their prediction on the applications that have come in for the rental and utility assistance program so far.

The agency has grappled with the possibility that money allocated to the program would be left on the table since it began, and has significantly increased its outreach efforts from the first round of rental assistance it gave out last year, particularly in low-income communities in City Council Districts 4, 8 and 9.

“We are estimating based on the current applicants, we will provide approximately $37.5 million in rent and utility for those qualifying households,” said Jeff Davis, the deputy CEO of the Housing Commission during a public meeting Thursday.

The Housing Commission started dispersing payments roughly two weeks ago, and has provided approximately $1.5 million so far to about 230 qualifying households.

So far, the commission has received more than 10,600 applications. More than 95 percent of those applicants report income at or below 50 percent of San Diego’s area median income. A family of four at that income would be making $57,750 or less. A family of two would be earning $46,200 or less. To qualify for the program a household needs to make 80 percent of the area median income, which would be $92,400 for a family of four.

The city’s program isn’t the only one struggling to dole out the money, said Davis.

“The programs that the County of San Diego and Chula Vista operate have experienced similar challenges to what we are seeing in terms of obligating and expending funds by the current state deadlines,” Davis said in the meeting.

San Diego County, meanwhile, could disperse as little as $27 million out of the more than $100 million it has to dole out, county spokeswoman Sarah Sweeney confirmed. Applications to the county so far request more than $55 million in assistance, but not all of those requests will likely be honored since some may not meet the qualifications.

“The amount of award for these applications will likely be substantially more than $27 million” plus funds for additional applications received in the future, she said.

“The initial application intake was high, but has tapered off recently,” Sweeney said. “We have heard from other jurisdictions administering similar programs that they are facing the same challenge.”

Anne Steinberger, a spokeswoman for Chula Vista, said the city had received approximately 3,000 applications for rent and utility assistance totaling approximately $10 million as of April of the $17 million it has allocated for the program.

Steinberger said that the paperwork and documentation required for the application may be a challenge for some people applying.

Davis said that Housing Commission staff would be continuing outreach, particularly in low-income communities. Lack of access to and comfort with the Internet and computers, language barriers and mistrust of government have been some reasons why people in high-need communities may not be applying, several community-based organizations working on the rental assistance program told Voice of San Diego last month.

The state dispersed federal relief funds for the program to the Housing Commission, Chula Vista and the county to administer, but the jurisdictions need to comply with several state guidelines for the funds.

For the city of San Diego and county programs, most of the funding from the state must be “obligated” by June 1, meaning that the Housing Commission must have preliminarily determined people are eligible for the funds and the jurisdictions must have a plan to expend all the state-allocated funds by Aug. 1.

Steinberger said the deadline for the Chula Vista program has been extended and the city will keep taking applications and allocating funds until they are all spent.

Housing Commission CEO Rick Gentry expressed concern last week in a letter to Gov. Gavin Newsom that the city wouldn’t be able to give out all the funds.

Gentry asked for changes to state guidelines for the assistance program “to maximize the expenditure and impact of federal funds allocated through SB 91 to help San Diego families with low income who experience financial hardship due to the ongoing COVID-19 pandemic.”

“Applications to date for emergency rental and utility assistance demonstrate the significant need for changes to the program requirements,” Gentry wrote. “Pending applications indicate that [the Housing Commission] likely will not be able to expend all of the available funding within the limited time allowed.”

Gentry requested that local jurisdictions be allowed the flexibility to pay all rental payments owed, including prospective rent.

It also requested that the program be allowed to pay 100 percent of back rent, instead of the current 80 percent, 100 percent of upcoming rent owed instead of 25 percent and to allow all hotel and motel expenses to be 100 percent paid.

The current rules require landlords to waive 20 percent of past-due rent owed and requires localities to prioritize paying back rent before prospective rent.

While back rent is “a significant challenge for many households with low income, the applications submitted to date from city of San Diego households demonstrate that the San Diego community’s need differs from the current State requirements,” Gentry wrote.

Indeed, program data from the Housing Commission shows that nearly 10,000 of the applications so far included upcoming rent assistance requests.

Gentry said sufficient funds exist to pay the landlords the full amount they are owed instead of requiring them to waive a portion. In the letter, he also referred to a survey of landlords within the city that found more than 80 percent are “small or ‘mom and pop’ property owners who own 20 or fewer units, and more than 50 percent own five or fewer units.”

Gentry made several other requests in the letter, including allowing up to 15 months of rental assistance per household, regardless of whether they are back payments or upcoming ones and changing the expenditure deadlines.

“Implementing the changes the San Diego Housing Commission requested will allow qualifying households with low income to obtain more assistance per household and will maximize the impact of the funds available through the city of San Diego COVID-19 Housing Stability Assistance Program,” said Housing Commission spokesman Scott Marshall in an e-mail. “The San Diego community’s needs differ from the current state requirements. The proposed changes would provide the flexibility to best support San Diegans in need and help them achieve and maintain stable housing.”

Restrictions on the funds imposed by the state “limit the levels of assistance local jurisdictions can provide,” Sweeney said.

“This may affect landlord participation and ability to meet applicants’ full needs,” she said.

The County Board of Supervisors recently directed staff to advocate for legislative changes to provide more flexibility, too.

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