A bill in the state legislature that would impose administrative restraints of federal rental assistance would make disbursement of the aid slower, a state official said.
The bill would cap rental aid in each county, based on population and median income.
It would also cap administrative costs, which includes salaries for case managers, at 5%. The federal government set the maximum for each state at 10%.
Laura Hogshead, chief operating officer at the state Office of Recovery or Resiliency, or NCORR, told The N&O in a phone interview that these county caps would unnecessarily slow down the process of getting funds to tenants who have fallen behind on rent due to the COVID-19 pandemic.
“Inevitably, we’re going to have to slow down applicants from one county in order to make sure that another county is getting up to their number,” Hogshead said. “It’s going to kill the program.”
The state Housing Opportunities and Prevention of Evictions program, or HOPE, has operated statewide under NCORR to provide rent assistance to tenants and landlords since it was created back in October.
Hogshead said that H196, which passed the state House and Senate on Thursday, would essentially require the HOPE program to maintain 100 smaller rental programs — one in each county.
“It will be chaos, which is the last thing we need in a program that folks are really counting on,” Hogshead said.
She said state legislators had not consulted NCORR when writing the bill.
In an email statement to The N&O from Gov. Roy Cooper’s office, press secretary Dory MacMillan said legislative leaders should have consulted state programs before writing budget changes.
“County caps will slow down aid while preventing some people from getting it in harder hit areas. The governor wants low income renters to get help quickly and he will ask the legislature to revisit this issue,” MacMillan said.
Cooper’s office did not respond when asked if the governor would consider a veto.
The bill, which also allocates funding to other emergency assistance programs, did not receive any “no” votes in the state legislature.
Why restraints were put on the rental assistance
The federal COVID stimulus from December allocated $546.5 million to North Carolina to be used on the statewide level.
In late February, the U.S. Treasury issued guidance that dictated that the rent assistance must go to households at or below 80% of the area median income.
Republican Sen. Ralph Hise wrote the county cap provision in the bill.
“It’s about delivering these funds where the need is across the state, and yes, that’s going to require work,” Hise said in an interview with The N&O.
Hise cited a provision in the bill that allows NCORR to show that a certain area needs more funding, but he said that has to be done through the General Assembly.
“We would then be able to redistribute those funds back to other counties where they have need, but they need to show us that it’s happening right now,” Hise said. “Not that they just took the funds and said, ‘Where’s the easiest place to put them?’”
Hogshead said the HOPE program already screens based on median income, and only accepts applicants who earn 50% or less of the median income in each county.
Of the 42,000 applicants to the HOPE program, over 90% were at 50% or below the median income, Hogshead said.
As for the 5% limit on administrative costs, Hise said the federal guidelines are a maximum and the limit was put there to have more funding for tenants.
“Is it more important that these funds go to help people in need?” Hise said. “Or is it more important we’ve made sure that the administrative process in Raleigh is as funded as it would like to be?”
Without the extra funding, Hogshead said she’s concerned there won’t be enough money to hire case workers to meet the demand in the state.
“As a central unit, we’re going to have to lean more on counties, and I fear that that would mean they would have to go into their own budgets,” Hogshead said.
The demand for rent assistance
When the HOPE program started in October with $167 million allocated from federal stimulus, it took about a month and 42,000 applicants for NCORR to halt the program due to lack of funding.
Since the program stopped accepting applications, $70.3 million of the $139.3 million awarded to 36,346 households has been given out as of Thursday morning.
Hogshead said NCORR is waiting for necessary information from tenants, landlords and utility providers before it can distribute most of the rest of the money. About $6 million needs to be processed on NCORR’s end, she said.
Hogshead encouraged those waiting for money to check for emails from NCORR.
Samuel Gunter, executive director of the N.C. Housing Coalition, a nonprofit affordable housing advocacy organization, opposes the provisions in H196.
He told The N&O in a phone interview that the most important thing right now is speed.
“When we come down with resources, we want to attach all of these strings and make it very difficult for individuals to access it,” Gunter said. “It becomes incredibly difficult for folks to access the help they need in a timely manner.”
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