With $200m more coming, is it enough or too much?

Can New Hampshire spend $200 million in federal money to keep people in their homes when it wasn’t able to spend $20 million last year for the same purpose?

That’s the question being asked by state officials, housing activists, tenants and landlords while they wait — after the state’s Housing Relief Program ended on Dec. 18 — for the new federal Emergency Rental Assistance program to begin.

And no one really knows the answer.

“It depends on the universe of need that’s out there,” said Taylor Caswell, commissioner of the Department of Business and Economic Affairs and executive director of the Governor’s Office for Emergency Relief and Recovery, or GOFERR.

“The need is there, and it could be an enormous benefit,” said attorney Elliot Berry, director of New Hampshire Legal Assistance’s Housing Project. “But at the end of the day, they are not likely to spend all of $200 million.”

The two programs are different. The state’s Housing Relief Fund, created with money the state received through the CARES Act, covered back rent and utility and mortgage payments for those who faced a loss of income or greater expenses due to Covid-19.

The new federal $25 billion Emergency Rental Assistance, or ERA, program covers rent and utilities, not mortgage payments, and it includes income requirements, though generous ones. Eligible are people who earn 80% or less of the median income, though priority goes to those under 50%.

But the ERA can pay up to a year of rent going forward. And it will allow a landlord to apply for assistance on behalf of a tenant.

“That will help dramatically,” said Nick Norman, legislative affairs director of the Apartment Association of New Hampshire, whose membership is landlords. “We pushed for that option.”

Berry agreed that landlords would take advantage of it. “I can’t imagine that landlords are not hungry for rent.”

The ERA would also allow tenants to get the money if they can show that landlords are not cooperating. Under the state’s Housing Relief Fund, only tenants could apply.

But there are more details to come, and by the first week of February, the state is still looking for guidance to implement the ERA, which became law on Dec. 27.

Meanwhile, there is no program in place right now to help tenants pay their rent to landlords, who cannot evict them for nonpayment of rent.

CAP involvement

Before we discuss what to expect in the future, let’s take a look at what happened in the past.

When Gov. Chris Sununu set aside $20 million for the Housing Relief fund — with $15 million extra in reserve — out of $1.25 billion of federal flexible CARES Act funds, housing activists were concerned that it wasn’t enough. In the end, however, the fund only expended $13.8 million to help more than 4,788 applicants, about half of the 9,836 who applied. About $11.3 million went to housing, the rest for utilities.

So was the need not as great as expected, or was the program for some reason not able to meet the need?

According to Alex Fries, a GOFERR spokesperson, in the end only 802 applicants — less than 10% — were actually denied assistance.

“The remaining applicants either did not complete their application or were unable to provide required documentation due to changing circumstances, arrangements with landlords, the eviction moratorium or otherwise,” he wrote in a written response to NH Business Review’s questions.

Sununu launched the program last July, just as he ended his emergency order to prevent an expected wave of evictions and foreclosures. But there was no wave, just a small ripple.

Perhaps it worked. Or perhaps other government aid, like enhanced unemployment benefits or the Paycheck Protection Program helped people hang on to their homes. For whatever reason, evictions, which did increase in July, did not even reach prepandemic levels before a federal Centers for Disease Moratorium went into effect in September.

Housing activists contend that there was a need for housing aid, and a combination of reasons explain why it wasn’t fulfilled — the program’s newness, its short time frame, its rules and its implementation by the state’s six Community Action Programs.

The CAPs are understaffed and, because of turnover, sometimes not that experienced, said Sarah Jane Knoy, executive director of the Granite State Organizing Project.

“We’ve been very frustrated since the money came,” she said. “We know the depth of the need. We are just not seeing the eagerness that you would expect people to feel in the midst of a worldwide pandemic. It feels very foot-draggy.”

Other barriers

Sununu selected the CAPs because they were already used to helping tenants, administering such programs as fuel assistance. But tenants and landlords complained about a long, complicated form, requests for documentation on how their income had dropped or their expenses have increased because of Covid.

“At first, it was very difficult,” said Berry. “They could not get the verification in time. People who weren’t very computer-savvy or didn’t have a computer had trouble uploading documents.”

Other tenants reported trouble getting through to the agencies.

One disabled Manchester tenant — who asked to be identified only as Ashley M. — had difficulty documenting that her expenses increased. For example, she could no longer take the bus when the transportation system shut down and had to have groceries delivered. She said she was initially denied because they tried to reach her three times, “and I know that wasn’t true.” She said she knew of other tenants who had a similar program.

There were other barriers. Not many people knew about the program, which could have been better advertised, said Dick Anagnost, a prominent Manchester developer and property owner. “Tenants didn’t hear about it until I told them,” he said.

And then some tenants were reluctant to apply. Derryfield Property Management in Manchester sent a letter to all of its tenants as a proactive measure, four of whom were behind in rent. Two tenants applied, another didn’t qualify and the fourth “simply did not the sense the urgency to address the back rent. I had to sit her down, and said, ‘You have to apply,’” said Paul DiIulio, a manager at the firm.

The state did simplify the form, shrinking it down to three pages, though it also requested documentation. Advocates and landlords thought that the process would go a lot faster if tenants could selfcertify.

Some states don’t seem to be as stringent as New Hampshire, said John Manning, CEO of Southwest Community Action, a CAP that paid out $1.7 million in housing assistance. He heard from landlords with properties on both sides of the Connecticut River “that the way the program was designed made it a little more challenging than Vermont.”

Sometimes it was hard getting required information from the landlord, since a tenant needed a tax ID number or Social Security number to cut a check, he said. “It was nothing insurmountable, though it did make things difficult. It felt like it wasn’t happening fast enough.”

‘We did amazingly well’

Elissa Margolin, director of Housing Action NH, which works to advocate for affordable housing in the state, also advocated for self-certification, but refrained from criticizing the CAPs or the state. “You can’t blame anyone for trying to be a good steward of taxpayers funds,” she said.

“While it may have appeared cumbersome, the documentation and attestation were necessary to fulfill the CARES Act requirement of Covid-related impact,” said Donnalee Lozeau, executive director of Southern New Hampshire Services, the largest CAP, which paid out more than $6 million on behalf of 1,900 tenants — a little more than half the number that applied.

Lozeau said she put “everything we had into the program,” advertising heavily, sending out letters to some 3,000 landlords and dedicating 30 staff members to do the follow-up calls for each applicant, spending at least an hour with each client.

Some of those who didn’t get aid were not qualified, she said. Others were not responsive to follow-up questions. “We reached out four times over six weeks, and if they didn’t respond, then their applications were withdrawn,” she said, adding: “While it’s hard to start up any program, I really think we did amazingly well, all things considered, in those six months.”

It was actually in place less than six months. Although the program started in July, it took several weeks to get started and applications ended on Dec. 18 because the state had to spend all of its flexible CARES Act funds by Dec. 30 or return the money to the federal government.

GOFERR was going to “waterfall” whatever wasn’t spent into the state’s unemployment fund, said Caswell. It had already put $50 million there to cover the unprecedented demand and to prevent any more increases in the unemployment tax on businesses.

But three days before Dec. 30 deadline, former President Trump — after a several-day delay — signed the Covid-19 Economic Relief Bill, which also let the state keep the CARES Act until Sept. 2021.

Nevertheless, the state decided to end all flexible CARES Act spending anyway, a decision that U.S. Sen. Jeanne Shaheen — a key figure in negotiation of the Covid aid package — said was “disappointing,” in a January housing forum.

“We really pushed hard to keep it, but they took it back,” said Melissa Hatfield, chief of the state’s Bureau of Homeless and Housing Services, which was running the program, said at the time.

Hatfield did not respond to NH Business Review inquiries, but Caswell defended the decision, arguing that more money was coming, it could be backdated to bills incurred during this gap, and there is a moratorium in place, “so one is being kicked out.”

Once the state closes out all the bills from last year and figures out how much CARES money is really left — it was at $104 million as of Jan. 22, including $6.7 million in the Housing Relief Fund — then it will reallocate funds depending on need, he said.

Unanswered questions

Meanwhile, the state is trying to set up another housing relief program without yet knowing what the rules are.

It does know that it is getting $200 million, since that’s the minimum it can get. (The amount increases when a state’s population exceeds 3 million.) That means the state is getting more per capita than most, $147 per person compared to $66 for Massachusetts, for instance.

It also knows that it can use 10% ($20 million) for administrative costs. And it also knows the legislative parameters of the new program. But there are still some unanswered questions. In fact, a note next to the Frequently Asked Questions link on the ERA website says, “FAQs are currently being revised and will be posted very shortly.” It’s the same message that has been up for weeks.

But the biggest question has nothing to do with regulations, but whether the state is getting enough or too much money to fulfill the need.

Income requirements won’t restrict the pool of applicants very much. The 80% of median income threshold varies by locality, but in New Hampshire as a whole, it’s about $60,000, whereas income of a median renter household is $45,000.

There are about 154,000 renter households in the state paying a median rent of $1,413 for a two-bedroom apartment. Do the math and you have roughly $2.6 billion in rent being paid every year. Suddenly that $200 million figure doesn’t seem that big.

Of course, not every tenant meets the income requirement, not every apartment is a two-bedroom and, more importantly, not every tenant is affected by Covid, and not all of them will necessarily apply for aid.

And if it is not enough, there might more housing money coming down the pike. President Biden is proposing in his $1.9 billion American Rescue Plan, a $30 billion housing aid package, also for rental assistance as well as energy and water assistance for hard-hit households. Bob Sanders can be reached at bsanders@nhbr.com.