Budget Committee, House approve $320 million in rental assistance

By Mark Ossolinski, Missouri News Network
Posted 2/3/21

JEFFERSON CITY — As the economic fallout from COVID-19 continues to impact Missouri residents, state legislators are moving to quickly distribute hundreds of millions of dollars in federal aid …

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Budget Committee, House approve $320 million in rental assistance

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JEFFERSON CITY — As the economic fallout from COVID-19 continues to impact Missouri residents, state legislators are moving to quickly distribute hundreds of millions of dollars in federal aid to struggling renters and landlords.

The House Budget Committee voted unanimously Jan.26 to advance House Bill 16, which sets the parameters for the state’s distribution of about $320 million in aid that the federal government allocated to Missouri as part of its $25 billion Emergency Rental Assistance Program launched Jan. 5.

The measure was passed by the full House on Thursday.

“Most importantly, we want to be able to give relief out to both the renters and the landlords out there that are seeing difficulties because of the pandemic,” said State Budget Director Dan Haug during a hearing with committee members Tuesday morning.

Under guidance from the U.S. Department of the Treasury, renter households eligible for the relief are those with a household income “at or below 80 percent of the area median.”

Also eligible are households with one or more individuals who qualify for unemployment benefits or have experienced a reduction in income, incurred “significant costs” or experienced financial hardship because of COVID-19, or can demonstrate “a risk of experiencing homelessness or housing instability.”

The federal government allocated emergency rental assistance funds to states based on population, with Missouri originally earmarked for $410 million to be distributed to both the state and to cities and counties with populations over 200,000. Those eligible localities had to apply for funding, after which it was determined that the state’s total need for rental assistance would be closer to $320 million, Haug said.

Treasury Department guidelines require that 90 percent of that allocation go to rent and utility assistance, while 10 percent be devoted to “housing stability services” such as case management, eviction prevention services and administrative costs.

According to Kip Stetzler, director of the Missouri Housing Development Commission — the agency tasked with administering the housing aid — tenants will be able to apply for assistance through MHDC’s online portal as early as Feb. 1.

The state will also continue to administer the Missouri Emergency Rental Arrears Program, which provides relief to landlords affected by the pandemic using CARES Act funds. There is currently a federal moratorium on evictions, which President Joe Biden extended for tenants who have fallen behind on rent because of the pandemic.

The $320 million figure — $311 million of which was distributed to the state Jan. 23 — marks a significant jump from the $28 million in CARES funding for housing assistance that has been available in the state since December.

Committee members pressed Stetzler on how his agency plans to distribute the federal aid quickly to those in need, especially in light of the fact that it has thus far spent less than half of the CARES funds.

Stetzler said the estimated number of households at risk of eviction in the state is between 150,000 and 230,000, and the estimated rent shortfall is between $294 and $417 million. “So, certainly, I think the need is there,” Stetzler said.

Rep. Peter Merideth, D-St. Louis, expressed concern over the pace at which housing aid has been disbursed to tenants in the state thus far.

“There’ve been a lot of pots of money like this,” Merideth said. “Of roughly $30 million, only half of that ends up getting spent, but we tell people we’re out of funding and they can’t apply anymore. And I want to make sure that’s not the case with this money.”

Merideth also said he has heard from eviction mediators that the application for the Emergency Rental Assistance Program can take between five and 10 hours to complete, and asked Stetzler if the process can be made more efficient.

“No, that’s always the challenge,” Stetzler said. “We have to balance out trying to get this money out the door as quickly as possible to those that need it, but also making sure that we keep an eye on applications from folks that don’t qualify.”

“The degree of difficulty is somewhat higher with this bill (than with the CARES funding),” said Rep. Cody Smith, Budget Committee chairman. “So I want to be as intentional as we can be about how this is going to be allocated.”

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