Emergency Rental Assistance – How Public Housing Authorities Should Prepare

Published by Rich Larsen, CPA on Wednesday, March 17, 2021 - 12:00am

Congress recently passed the $1.9 trillion American Rescue Plan Act, which provides an additional $21.55 billion for the Emergency Rental Assistance (ERA) Program. This funding is in addition to the $25 billion authorized in year-end COVID-19 relief legislation enacted in December 2020.  In total, the more than $65 Billion in ERA funds will be distributed by the U.S. Department of the Treasury (Treasury) to states and eligible local governments, to include cities, county municipalities, townships, villages, parishes or other units of general government.

PHAs’ Role

Public housing authorities (PHAs) are already administering rental assistance programs using funds from the Coronavirus Relief Fund (CRF) authorized in the CARES Act in local jurisdictions across the country, and can apply for ERA funds from an eligible local jurisdiction for non-subsidized units that they own. Residents of properties with U.S. Department of Housing and Urban Development (HUD) rental assistance can also receive assistance for the tenant-owed portion of rent or utilities that is not subsidized. To be eligible, local governments are required to have a minimum of 200,000 residents, and tenants and landlords within these local jurisdictions may apply through the grantee. Eligible uses for ERA include the following three uses:

  1. direct financial assistance – rent for three months going forward and rental arrears; utilities and home energy costs and utilities and home energy arrears; other expenses related to housing not to exceed 12 months; and, an additional three months of payments to stabilize housing, based on the availability of funds;
  2. housing stability services – case management; other services for housing stability; administrative costs; and
  3. direct payments – funds can be sent directly to landlord or utility provider, if refused, then directly to household.

Reporting and Compliance Requirements for ERA Funds

Reporting and compliance requirements to aid grantees in preparing for ERA funding include a quarterly public report from Treasury, in cooperation with HUD, on the use of funds, including the number of eligible households that receive assistance from such payments, the acceptance rate of applicants for assistance, the type and types of assistance provided to each eligible household, the average amount of funding provided per household, and household income data broken down by race and ethnicity. All data collected for reporting may be provided for statistical research under the current law (including personally identifiable information and at the census tract level), and the grantee must establish data privacy and security requirements (i.e. appropriate measures to ensure privacy).

PHAs are uniquely positioned to respond to the complexity of reporting requirements and responsiveness required to prepare for ERA funding. Lori Rosendahl, chief executive officer of the Foothills Regional Housing Authority (FRH) serving Jefferson County, Colorado, recently shared with Novogradac three takeaways and guidance to help PHAs across the country adequately build the infrastructure to prepare to be responsive for ERA funds below.

Key Takeaway 1: PHAs Must be Ready to Move Fast

“Be ready to move fast,” Rosendahl said. “You cannot always say ‘we cut checks every other week’. Landlords have been patiently waiting on rent, let’s show them we understand by moving fast.”  FRH was prepared for ERA funds because they quickly created the infrastructure to accept the funds ahead of their release. Rosendahl hired three housing navigators with set aside funds prior to ERA fund deployment, and these navigators all had backgrounds in services and compliance. Having the infrastructure in place, with a talented staff of navigators, allowed FRH to move quickly to get the funds distributed to families in need. Furthermore, FRH already had a mobile app in place for deposit assistance; thus, the staff was able to swiftly distribute ERA funds to eligible families while also understanding the implications of not documenting what, how, and why funds were being distributed. Investing in the infrastructure to move quickly could help many PHAs get prepared for ERA funds.

Key Takeaway 2: PHAs Can Be Aligned with Compliance Requirements

“Be thorough and read every guideline and follow all regulatory requirements,” said Rosendahl. “There will be multiple layers of rules and it is important to ensure you are compliant with all of them. We, as PHAs do this compliance work daily, we should be extra ready.”  The compliance guidelines for ERA funds are vast and detailed. Rosendahl noted that PHAs are uniquely positioned to handle the complexity and compliance requirements, and she recommends a thorough review and understanding of those guidelines before applying for ERA funds. Improper reporting or inaccurate compliance reports could have future negative effects on emergency funding assistance.

Key Takeaway 3: PHAs Can Avoid Overpromising and Underdelivering

“Don’t over promise and underdeliver,” said Rosendahl. “Only promise what you have the capacity to handle.  The last thing we as PHAs want is for landlords to lose confidence in our ability to perform.  We also must remember this has been a scary and trying time for families who struggle with poverty and staying housed, we must be patient and willing to go the extra mile to help them get the necessary paperwork done to benefit from the ERA.” A review of capacity before applying for ERA funds can help PHAs understand where they are and what they need to adequately prepare for the distribute of ERA funds to those families and communities in need. 

Conclusion

Rosendahl provides a great blueprint and insight for PHAs as they get ready for ERA funds. PHAs collaboratively work with landlords, tenants, families and local governments to avoid evictions whenever possible while also efficiently and compliantly distributing ERA funds. More information can be found in Novogradac’s past and future webinars.  

Novogradac is eager to assist PHAs and eligible authorities with any aspect of ERA, from program administration to applying for funding.