Program that paid $53 million to Lexington landlords for rent ends Dec. 1. Now what?

A pandemic-era program that has paid Fayette County landlords $53 million in past-due rental payments will be tapped out by Dec. 1, city leaders cautioned this week.

Lexington’s Housing Stabilization Program, which began in February 2021, helped keep people who lost income during the height of COVID from being evicted from their homes. Thanks to multiple rounds of federal funding, the city was able to use that money to pay 800 landlords for past-due rent for 7,000 renters.

“That’s one out of every 10 renter households in Fayette County,” said Jonathan Wright, a housing policy advisor with the city of Lexington.

At its height, the program was going through $1 million a week.

The program was one of the largest social service programs the city has ever overseen, said Charlie Lanter, the Commissioner of Housing Advocacy and Community Development.

But the money will run out for the program in the next several weeks.

The program was designed to be temporary — a stop gap to keep people housed during a public health crisis.

To stretch program dollars, the city tightened restrictions on the program in January, allowing only those who have eviction orders in court to get funding.

In addition, the city set aside a little more than $1 million for a two-pronged education and legal representation program.

Kentucky Equal Justice sends notices to people who have eviction filings in court. Those notices also include information about rental assistance and how to access free legal help. The group stresses how important it is for the tenant to show up for court.

Studies show the vast majority of tenants don’t show up for court and don’t have lawyers. Landlords have legal representation in court. Now, Legal Aid of the Bluegrass has an eviction help desk outside of eviction court.

If the tenant does not show up, a default eviction judgment can be entered on their record. A history of evictions makes it more difficult for that renter to find future housing, often sending them into increasingly dangerous living situations.

The legal help and the education efforts will continue until the fall of 2024, Wright said.

The city hopes those programs will help stem a possible surge in eviction filings come December.

Many states and cities ran out of federal pandemic eviction money in 2022. Many of those states, including Minnesota, saw the number of eviction filings jump after the money dried up.

In addition, the city has set aside an additional $300,000 for emergency assistance from a recent surplus for help those who need help with utility and other payments.

Prior to the pandemic, a patchwork of nonprofits and churches helped people with past-due rent or utilities. Lanter said those programs, which have not been used in two years, will need to ramp back up.

“We wanted to get the word out now so people will be prepared come Dec. 1,” Lanter said.

The program has had plenty of critics. Many landlords and tenants said it took too long to get past-due rent money during the height of the pandemic.

Still, landlords who applied got paid for past due rents. Now, landlords will not have city money to tap if a tenant leaves with rent in arrears, Wright said.

Lanter said the program has also shown the need for more affordable rental units in Lexington.

“We are now investing millions into affordable housing and other programs to address the problems long-term,” Lanter said.

Using coronavirus relief money and money from city surpluses, the city has pumped more than $15 million into affordable housing in recent years. That’s in addition to the $2 million the city typically sets aside for funding each year. The Lexington-Fayette Urban County Council also recently passed an ordinance that would require the city to put at least 1% of its annual revenues into the fund. That would translate to more than $4 million a year.

The city is expecting more than 650 affordable housing units to be added this year.

Those who need free legal assistance for an eviction can contact Legal Aid of the Bluegrass at apply.lablaw.org or call 859-280-8424 and select Option 3.