Officials said rental assistance program was running out of funds. But they had stopped applying for more

This story was originally published by MLK50: Justice Through Journalism. Subscribe to their newsletter here.”

In August, local officials announced the end of a massive, COVID-19 housing relief program as if it were inevitable.

The federally funded Emergency Rental Assistance program, which covered back rent and overdue utility bills for low-income renters, would no longer accept applications because the local portion of funds was running out, said Ashley Cash, director for the Division of Housing and Community Development for the City of Memphis.

What Cash didn’t say was that there were millions more available to protect Shelby County residents from eviction, but her team had quietly decided not to apply for the additional funds released this fall.

The city-county decision came as tenants face rental rates 30% higher than pre-pandemic and inflation sends the cost of food and other living expenses soaring.

Since the start of COVID-19, there have actually been fewer filings for eviction, which increase renters’ blood pressure as well as their risk of sleeping in a homeless shelter or even dying by suicide. But because at least some of this decline can be credited to the ERA funds themselves, local officials’ choice to forego more of these funds is a puzzling one.Since August, the federal government has continued to reallocate hundreds of millions of dollars of ERA from cities and states with a surplus to those who could use more. The local version of the program — a city-county partnership — had received $72 million in previous reallocations. But when the federal government offered communities more rental assistance in recent months, the city-county leaders did not apply.

Shelby County Director of Community Services Dorcas Young Griffin, who leads the program from the county side, said the city and county didn’t apply so they could focus on spending their remaining funds by the Dec. 29 deadline that applies to most of them.

Cash gave similar reasoning, saying the local team — which has long been stretched thin — didn’t feel ready to apply for the extra funding, after discussions between “a collaboration of folks.”

“There’s a lot of decisions that go into it,” Cash said. “On the outside looking in, it’s like, ‘Just keep applying.’ … With where we are (we didn’t think) the timing was right.”

It’s unclear if Cash’s team consulted with any elected officials before making its decision. Memphis City Council member Martavius Jones said the council hadn’t been informed of these discussions and that he will want to hear from Cash directly.

“My first reaction is one of shock,” Jones said. “When we look at the number of people in our communities that have a need for this type of assistance, I’m shocked as well as disappointed that we would take our hands down and say we don’t need it.”

After MLK50 contacted him for this story, council member Chase Carlisle said that he asked the administration to update the council on the program at its Tuesday meeting.

Housing assistance:For COGIC, building low-income housing in Memphis is part of the mission

Affordable housing:Dozens of new affordable homes in Memphis? Habitat for Humanity working to make it happen

“The negative effects of COVID on the economy and people’s lives are very much in full swing,” Carlisle said. “It’s as important as ever to ensure we are taking full advantage of federal assistance for housing.”

According to federal data, the Memphis-Shelby County program assisted more than 24,000 households between March 2021 and June 2022, although some households may have been helped twice. It has been by far the largest assistance program for people behind on rent that the county has seen.

Both Young Griffin and Cash said the city and county may apply for future reallocations after they’ve spent their existing funds. However, Cash has previously said the local program is ending, and its website had said it would “no longer accept applications of any type after August 31.”

Including those submitted in August, Cash said the city and county now have enough backlogged applications — about 8,000 — to spend the roughly $37 million they have left.

Two different deadlines

The federal ERA funding comes in two types: ERA 1 and ERA 2. All ERA 1 funds have to be spent by Dec. 29, but ERA 2 funds don’t expire until September 2025. Almost all of the remaining local funds are ERA 1 dollars that originally belonged to the State of Tennessee but were reallocated to Memphis and Shelby County in January and March.

In September, the federal government reallocated another $460 million of ERA 1. If the city-county program had applied and been selected for some of these funds, it would have needed to spend them — plus its own remaining ERA 1 cash — in about three months.

“(One) challenge is making sure you don’t have this huge batch of funding with an expiration date and you can’t meet it and you’re turning the money back over anyway,” Cash said. (Based on U.S. Department of Treasury guidance, it appears cities do not face a penalty when they miss spending deadlines; they simply have to return unspent funds.)

However, the city-county program also didn’t apply for a recent ERA 2 reallocation. On Oct. 18, the federal government announced the recipients of $288 million of these funds. And, more will be made available in the months and years ahead, if Memphis and Shelby County decide to raise their hands again.

Deficits of funding, staff and support

While the local program has been faster at getting funds to families who need them than programs in most peer cities, it has not been without its flaws.

In August 2021, MLK50 found that the program’s outreach effort was underfunded, its office staff was stretched super thin, and there were far too few attorneys to guide tenants through the process.

Many of these issues came from the federal guidelines, which allowed only 10% of ERA 1 funds and 15% of ERA 2 funds to be spent on administrative costs — not enough to staff a large new government program. However, faced with these same challenges, some municipalities proved faster than Memphis and Shelby County at distributing funds.

The local program was also hampered by a lack of buy-in from the General Sessions Civil Court judges who handle evictions. In a July 2022 investigation, MLK50 journalists found that while all six of these judges knew about the ERA funds, only three told tenants about it in court.

As such, a tenant’s random courtroom assignment played a major role in their chance of receiving the funds.

Ryan Stittiams doesn’t understand why the city and county would end the program if they had the option to keep it going.

A year ago, he and his five kids were almost ejected from their Cordova home and forced to move in with his mother. This inconvenience and instability would have turned 2022 into a year he “(doesn’t) even want to think about,” he said.

“This isn’t one of the richest cities in the world as is … putting people out (when) you have the funds (available) to help is so detrimental,” Stittiams said.

Stittiams was able to connect with program officials immediately after his first eviction hearing — something that wouldn’t be possible for someone in his shoes now that new applications aren’t being accepted.

The program covered a year’s worth of rent, which allowed him to pay other bills. In 2022, he said he’s fallen behind on rent a few times, but he’s been able to keep his family rooted in their home.

Without the local program, Shelby County residents will still be able to apply for the State of Tennessee’s version of the program. However, the state has been far slower at granting funds and therefore isn’t as helpful to people such as Stittiams, who was just about to be evicted when he applied for relief.

The absence of the local program frightens Mary Hamlett, who leads the Metropolitan Inter-Faith Association’s work with families who have lost housing.

Without it as a ledge to grab onto, many more Memphians may fall into homelessness, she said.

“Without another safety net program like that, I don’t even want to attempt to say what we’re going to see,” she said.

Jacob Steimer is a corps member with Report for America, a national service program that places journalists in local newsrooms.

This article originally appeared on Memphis Commercial Appeal: Shelby County emergency rental assistance program running out of funds