August 17, 2021
The Honorable Marcia L. Fudge
Secretary of Housing and Urban Development
457 Seventh Street, SW
Washington, DC, 2041
The Honorable Dr. Janet Louise Yellen
Secretary of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
RE: Critical Reforms Needed to the Emergency Rental Assistance Program (ERA) and Related Relief for Public Housing and Section 8 Programs
Dear Secretary Fudge and Secretary Yellen,
The Council of Large Public Housing Authorities (CLPHA), the MTW Collaborative, the National Association of Housing and Redevelopment Officials (NAHRO), the National Leased Housing Association (NLHA) and the Public Housing Authorities Directors Association (PHADA) represent the interests of over 3,000 local public housing authorities (PHAs). We are very concerned about the challenges assisted households continue to experience when attempting to access critical emergency funding to pay delinquent rent or utilities through the Emergency Rental Assistance Program (ERA). We believe that the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Treasury (Treasury) should take immediate action to remedy the programmatic and administrative challenges detailed below to drastically accelerate the spending of ERA funds and quickly deliver relief for our most vulnerable populations. It is important to note that none of the recommendations made undermine program integrity based on published Treasury guidance (most recent FAQs) for reasonable program integrity steps.
HUD and Treasury should direct ERA grantees to streamline applications to remove barriers to households.
PHAs report that despite their best efforts to facilitate access to HUD-assisted households and owners of available ERA funding and provide application support, the application process is fraught with difficulties and barriers. As a result, PHAs have found that many applicants abandon their requests for rental/utility relief, or their applications are denied when residents or owners are unable to meet unrealistic documentation deadlines and requirements.
PHAs report that ERA portals require an applicant to complete the application and upload all supporting documentation at one time, without allowing the applicant to resume the application later. Some housing providers estimate that the application process, in the unlikely occurrence the applicant has all required documents, can take in excess of three hours to complete.
Likewise, due to persistent governmental office closures, applicants are unable to obtain certain required documents like birth certificates, photo identification and income verification documentation to demonstrate ERA eligibility.
Even after residents have collected and uploaded all their required documentation, PHAs are unable to complete the application because some ERA portals require documentation from PHAs such as rental licenses that are not applicable for public agencies. These cumulative challenges often deter residents and owners from completing the ERA application, leaving families without the needed financial support to address mounting rental and utility arrears.
The timely distribution of ERA funds has also been largely hindered by an ever-increasing backlog of applications, in some instances causing months-long delays to verify applicant information and respond to PHAs. While reasons vary from one region to another, there are trending areas of concern. In many communities, inadequate software systems have led grantees to seek outside technical support from third-party vendors, sometimes forcing cities and states to stop accepting applications altogether until these issues are fixed. There is also not enough staff capacity across programs to review and verify the number of submitted applications. Administrators of ERA have been overwhelmed by an unprecedented demand for assistance, often far greater than a program had been funded, culminating once again in grantees halting their application process to focus on a backlog of submissions and hiring contractors to help review applications. The longer these grantees take to resume their programs and review a mounting backlog of ERA applications, the longer it will take some of the nation’s most vulnerable households to receive the help they desperately require.
CLPHA, the MTW Collaborative, NAHRO, NLHA, and PHADA believe that HUD and Treasury should direct grantees to streamline the application process and remove barriers to applicants by granting PHAs a special designation exempting them from the following ERA application requirements.
Grant PHAs a special designation exempting them from requiring a HUD-assisted resident to sign a consent form to share data with ERA grantees.
HUD stipulates in its latest FAQs on ERA that “absent consent, PHAs are not authorized to share data regarding families in the public housing or HCV programs with third parties”. However, Treasury advised in its ERA FAQs that ERA administrators “may rely on an attestation from the applicant regarding nonduplication with other government assistance in providing assistance to a household.” These two directives are working in opposition of each other, because requiring PHAs to obtain a signed consent form from residents prior to applying on their behalf drastically slows the application process and often ends it altogether.
For instance, a PHA reports that while it has an agreement with the local ERA administrator to submit ERA applications on behalf of public housing residents, it must first obtain physical signatures from qualifying families before finalizing the application. In many instances, these families have been uncommunicative and fail to complete the signed consent form.
As a result, the PHA is organizing a community action day to obtain over 2,500 consent signatures for public housing families with rental arrears. Likewise, the largest PHAs report being required to obtain tens of thousands of individual consent signatures to apply on behalf of residents. The requirement to obtain individual consent signatures is both administratively burdensome and inefficient. By encouraging data sharing agreements and not requiring individual family consent signatures, HUD and Treasury may align these two provisions to more efficiently allow PHAs to apply on behalf of residents that desperately need the assistance, while upholding PHAs’ obligations to protect Personally Identifiable Information (PII).
Grant PHAs a special designation exempting them from completing the income verification process and allow residents to demonstrate eligibility for rental assistance through an affidavit or self-attestation.
For those who participate in the public housing and Housing Choice Voucher (HCV) program, a certification or affidavit of need should be sufficient. Public housing authorities regularly collect and verify participant income information, thereby making the ERA income verification process redundant and time consuming for both the renter and PHA staff tasked with deploying rental assistance. Currently, there is no consistency among state and local governments to allow for “self-attestations” or declarations of income. Some agencies allow for self-attestations while other agencies only allow for income self-attestation as a last resort. This inconsistent guidance significantly slows the application process. Treasury should direct grantees to accept an affidavit or self-attestation from PHAs verifying a HUD-assisted household’s eligibility for rental assistance. Likewise, HUD should update its Eviction Prevention and Stability Toolkit to include a sample affidavit or self-attestation for HUD-assisted households.
Establish a safe harbor for those attempting to obtain documentation from uncommunicative residents to support those applications.
As mentioned above, many PHAs report that families have been uncommunicative in discussing their rental arrears and applying for ERA. In addition to allowing PHAs to apply on behalf of the resident without an individual consent form, HUD should implement a safe harbor for PHAs that have notified residents of their intent to apply for assistance even if they cannot obtain consent. Documentation of unpaid back rent or submission of the Centers for Disease Control and Prevention (CDC) eviction order declaration of COVID-impact should suffice to move these applications forward.
Require state and local grantees to facilitate bulk processing of applications and payments.
While Treasury’s most recent guidance does encourage grantees to obtain information in bulk from housing providers regarding eligible residents and to engage in bundling assistance payments, many program administrators have documentation and process requirements that create barriers to bulking and batching applications on behalf of assisted households.
Even though some PHAs report receiving timelier ERA payments, some continue to experience payment delays in excess of three to six months after submitting a complete ERA application. Bulk processing will help streamline the process. It is imperative that bulk processing be implemented across ERA administrators.
Treasury should allow housing providers to receive ERA funding for rental arrears, even if the renter has moved, and prohibit program requirements that force housing providers to return payments when residents move out.
HUD reports that PHAs are now carrying in excess of $290 million in Tenant Accounts Receivables (TARs). While PHAs are doing everything they can to prevent evictions through flexible repayment agreements and locally funded rental forgiveness programs, some renters may still face eviction due to nonpayment of rent following the expiration of the temporary CDC Eviction Moratorium. In these instances, PHAs and HCV landlords should be allowed to apply for ERA to cover rent arrears even after a renter has moved or if the renter has a judgment entered against them. Additionally, housing providers should not be required by ERA administrators to return rental assistance payments that pay for outstanding balances if the resident moves out. PHAs and HCV landlords must be made whole from debts that renters leave behind. These funds are critical for housing providers to continue managing property operations and maintaining the housing for their residents overall.
HUD and Treasury should direct ERA grantees to pay all of an applicant’s rental arrears within applicable statutory limits
Certain ERA grantees are limiting the amount of rental arrears that they are paying to applicants beyond the limits imposed by the statute. While the statute limits the arrears to 12 months with an additional 3 months--if necessary--to ensure housing stability, some ERA grantees are limiting the amount of rental assistance they provide to applicants to an amount based on fewer months. This limits how quickly the money is used, while also disincentivizing landlords from participating in the program. This action will ensure that ERA grantees pay all of an applicant’s rental arrears and lowers the likelihood that the applicant will not potentially be evicted in the future.
Treasury should extend the deadline to reallocate all unobligated emergency rental housing assistance funds until September 30, 2025.
As of August 11, 2021, the Treasury ERA Spending Tracker reports that only 16.9% ($4.24 billion) of $25 billion in ERA1 funding has been expended to assist struggling families to avoid eviction while the world grapples with the newest strain of coronavirus. Even though the extension of the CDC’s latest temporary order to halt evictions in counties with heightened levels of community transmission has given local ERA administrators more time to disburse these critical resources, we believe Treasury should take immediate action to postpone the deadline to reallocate all unobligated emergency rental housing assistance funds until September 30, 2025.
The Consolidated Appropriations Act of 2021 authorizes Treasury “beginning on September 30, 2021,” to “recapture excess funds, as determined by the Secretary, not obligated by a grantee” and reallocate any such funds to grantees who, at the time of such reallocation, have obligated at least 65 percent of the amount originally allocated and paid to such grantee. The law also provides that the amount of any such reallocation shall be determined based on demonstrated need within a grantee's jurisdiction, as determined by the Secretary. We believe that the statute language that states “beginning on” gives Treasury the flexibility to delay the actual reallocation of all emergency rental housing assistance funds to allow grantees more time to implement the suggested programmatic and administrative changes detailed above.
In addition to the above recommendations, below are two additional actions we believe HUD should undertake to address both ERA programmatic and administrative challenges that have arisen due to the pandemic., These will allow PHAs to provide ongoing relief to vulnerable families through the flexibilities provided under the CARES Act.
HUD should indefinitely suspend scoring under PHAS and SEMAP.
In consideration of the financial impact associated with the eviction moratorium and other existing HUD rules, we believe that HUD should indefinitely defer official scoring under the Public Housing Assessment System (PHAS) and the Section Eight Management Assessment Program (SEMAP). PHAs and owners should not be held accountable for factors largely outside their control during the continuing public health emergency.
Many PHAs have found that even when subsidized rents are reduced based on lower household income, many families still have difficulty meeting their rent and utility obligations due to increased expenses related to COVID-19. These expenses, such as food and utilities, have increased because household members are working or schooling from home. Children who participate in school lunch programs are now eating at home and these costs are absorbed by households. Longer periods at home leads to greater utility costs, not accounted for by PHAs’ utility allowance schedules.
Beyond these expenses may be medical costs not covered by insurance, or even helping other family members with their medical and other needs.
In public housing, HUD’s assessment program covers a variety of management and financial indicators as well as physical inspections. Some of the factors scored include occupancy, tenant accounts receivable (TARs) and agency reserves.
In a July 30 meeting between our organizations and HUD-PIH, HUD staff stated that “HUD recognizes that the various Federal, State and Local eviction moratoriums have had an impact on PHAs’ ability to collect rents from families…” Indeed, HUD documented those rents have declined by roughly $100 million with an average agency increase of roughly 39 percent (excluding the New York City Housing Authority).
HUD further noted that, prior to the pandemic, the percent of wage earners out of the total number of households was about 30 percent with an upward trajectory in Total Tenant Payment (TTP). When the pandemic hit in March 2020, there was a downturn in TTP that was largely driven by decreases in income of wage earners. In the last eight to ten months, TTP has returned closer to pre-pandemic levels, but there is still a considerable amount of economic uncertainty ahead with the aggressive spread of the delta variant.
While HUD has not yet provided similar data for the HCV program, the effects are expected to be similar. SEMAP measures many of the same kinds of outcomes as PHAS (i.e., leasing, income and household composition, recertification, inspections, calculation of rents).
Many HCV residents have requested recertification of their incomes, which will have a significant financial impact on agencies and owners, but the full costs associated with those recertifications are unknown at this time and in 2022 as a result of voucher HAP renewal funding formulas. Similarly, Covid-19 restrictions and complications have prevented many PHAs from fully leasing-up and inspecting units, factors which can have a major impact on an agency’s SEMAP score.
Public housing authorities should not be scored on indicators that have been largely outside their control over the last 18 months. Because of still cascading effects of the eviction moratorium, the possibility of courts ruling against the CDC’s extension through October 3 or shifting infection rates that no longer shield tenants from the order, and ongoing spread of virus variants, HUD should indefinitely suspend scoring under both PHAS and SEMAP. If HUD has concerns about the physical quality of units, it can continue to employ the ongoing health and safety focused inspections, which are not officially scored.
HUD should extend the CARES Act waivers beyond the current expiration date of December 31, 2021.
The Centers for Disease Control and Prevention (CDC) issued an order for a targeted moratorium on evictions for non-payment of rent through October 3, 2021, for counties experiencing “heightened levels of community transmission.” That category currently covers about 94 percent of counties nationwide, but that could change based on COVID-19 conditions. In recognition of this order and the ongoing COVID-19 pandemic, including the emergence of new variants which have further heightened our national public health crisis, we believe HUD should extend the CARES Act waivers at least six months beyond the current expiration date of December 31, 2021. Under the CARES Act, the HUD Secretary is given broad authority to “waive, or specify alternative requirements” to “expedite or facilitate [funding] to prevent, prepare for, and respond to coronavirus.” Waivers such as self-certification of income for annual and interim examinations, alternative requirements for oral briefings, increases in the payment standard during the HAP contract term, and self-certification for initial and interim inspections for HCV and PBV units, have enabled PHAs to continue to quickly and efficiently house, serve and safeguard vulnerable low-income families during the COVID-19 pandemic, when the ability to maintain a stable home is paramount.
Public housing authorities are a critical component of the nation’s social safety net serving the most vulnerable low-income families, seniors and persons with disabilities during our country’s greatest public health crisis. Taking action on these recommendations will allow PHAs to expedite aid to those in greatest need and mitigate a looming eviction disaster. Thank you for your consideration.
Council of Large Public Housing Authorities
Moving to Work Collaborative
National Association of Housing and Redevelopment Officials
National Leased Housing Association
Public Housing Authorities Directors Association
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