Monday, June 17, 2024

Emergency rental assistance in Louisiana has paid $26.4M out of $161M

by BIZ Magazine

By William Patrick | The Center Square

Louisiana has paid $26.4 million out of $161 million in federally allocated Emergency Rental Assistance Program funds for 57 parishes since the program was launched in March.

The ERA program was created to help residents “who are at risk of experiencing homelessness or housing instability due to the COVID-19 pandemic,” and works in conjunction with the Centers for Disease Control and Prevention’s eviction moratorium for parishes and counties with “heightened levels of community transmission.”

The CDC considers the entire state of Louisiana, as well as every other state except Maine, at high risk of COVID-19 transmission.

When asked about the funding disparity – about 16% of available funds paid over five months – a spokesperson for the Louisiana Office of Community Development cited issues stemming from the U.S. Department of Treasury.

“The processing of payments to applicants has been slowed by eligibility requirements and constantly changing program documentation guidelines issued by the U.S. Treasury,” the spokesperson said. “The state has utilized its on-line processing, and collaboration with other agencies to share data, in order to streamline and speed up its process.

“The state has steadily sped up its rental assistance disbursement since the program launched on March 5, 2021, more than doubling payments disbursed in the past month, and the speed of funding continues to pick up pace. The number of applications submitted also continues to climb, with more than 1,300 applications newly filed this week.”

The ERA program applies to renters and landlords. State data through Aug. 25 indicated Louisiana residents have started 32,198 applications for assistance, while 12,178 applications were submitted and 4,905 applications were approved. Another 10,122 requests for utility bill assistance also have been made.

A program status report for the month of July showed $7.86 million was paid to 1,370 households across the 57 parishes. In June, $5.89 million was paid to 976 households, $3 million was paid to 498 households in May and $1 million was paid to 154 households in April.

The remaining seven of Louisiana’s 64 parishes – Caddo, Calcasieu, East Baton Rouge, Jefferson, Lafayette, Orleans and St. Tammany – are operating their own ERA programs. According to the state, the seven local government units have received $59 million in emergency rental relief funds directly from the U.S. Treasury Department since March.

As of June 7, the most-recent data published by the New Orleans Office of Housing Policy and Community Development, $5.4 million in rental assistance out of $11.6 million in allotted funds had been distributed to qualifying residents in need.

An additional $15.8 million in Orleans Parish local ERA funds are expected, in addition to a $15.1 million commitment in state ERA funds from Gov. John Bel Edwards, the New Orleans OCD said.

The gap in disbursed funds versus allocated funds is not unique to Louisiana. The U.S. Treasury Department announced Wednesday only $5.1 billion has been disbursed by state and local governments nationwide from the first round of ERA funding occurring in December, totaling $25 billion.

Another $21 billion was approved through the American Rescue Plan Act in March, marking 11% of total ERA1 and ERA2 funds distributed to renters and landlords facing financial hardships in COVID-19 stricken communities across the country.

“One of the biggest challenges many state and local government programs continue to face in getting assistance to renters and landlords is application processing delays,” a Treasury Department statement said Wednesday. “According to public dashboards, hundreds of thousands of applications are in the pipeline beyond those that have already been paid.”

Treasury officials issued seven new recommendations as a result to “accelerate assistance to those in the pipeline in addition to those who have yet to apply.” Similar attempts to streamline ERA funding occurred in February, May and June.

An email response from Gov. John Bel Edwards’ office earlier this month said the Louisiana Emergency Rental Assistance Program “must work within the rules that the U.S. Treasury established.”

“However, once a tenant and a landlord submit all of the required information and have an approved application, they should expect to receive rental assistance payouts in approximately two weeks,” a spokesperson said.

Landlords are among those who are hardest hit, as tenants cannot be evicted for failing to pay rent and rental assistance has been slow to compensate them.

Eloise Gauthier, a real estate agent and rental-income investor of more than 33 years said she’s had to sell 10 units to make up for losses since the federal eviction moratorium began.

“I’ve never seen anything like this,” Gauthier said earlier this month.

“They stood in line for three hours, and, to this day, they have not gotten any assistance,” she said about several tenants who applied in April.

Louisiana’s $161 million allocation follows an earlier round of ERA1 funding totaling $24 million.

“After September, programs that are unwilling or unable to deliver assistance quickly will be at risk of having their rental assistance funding reallocated to effective programs in other high-need areas,” the Treasury Department said.

“We constantly are re-examining the process in order to find a way to accelerate payments to landlords and renters,” the Louisiana Office of Community Development spokesperson said.

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