Federal money for emergency rental assistance on hold until Legislature approves funding
Michigan is set to receive $622,794,676 from the federal government for emergency rent and utility payments during the COVID-19 pandemic. The House Appropriations Committee doesn't want to give the Michigan State Housing and Development Authority that money all at once: it wants to distribute it in installments.
The proposed plan would allocate $165,226,700 to MSHDA immediately, and the rest would be distributed over the course of the year. House Appropriations Chair Thomas Albert (R-Lowell) says this is "simply to ensure accountability and transparency in the process."
Kelly Rose is the chief housing solutions officer at MSHDA. She says that if they received the full sum right from the get-go, they would be able to focus more on program delivery.
"If they wanted to continue to do it in installments, basically each time they appropriated more funds we would have to do grant amendments which is, you know, just administratively burdensome."
She says hiring considerations are a part of that.
"We feel that by getting the full six hundred plus million dollars at the outset, it will allow our nonprofit agencies greater flexibility in their hiring. We do project that probably between four to five hundred new staff all around the state will need to be hired," she says.
Eric Hufnagel is the president of the Michigan Coalition Against Homelessness.
"I don’t understand the logic here. We know that there are families that are suffering, there are families that are in need, that we do have capacity to get those dollars out where they need to be, why is this being held up?"
He says lawmakers need to listen to people who actually work within their communities, saying, "I haven't talked to anybody working in this field who says 'hey, our community really doesn't need this money, these funds aren't necessary.' We're hearing overwhelmingly that the Eviction Diversion Program was really effective, and communities really valued it and would like to see it continue because they know there is that need there."
MSHDA used federal money from the CARES Act to fund the Eviction Diversion Program last year, and used all of the $60 million allocated for the program.
Rose says she and others at MSHDA have been in contact with legislators, but have not received a timeline or indication as to when they will get the money.
"We would obviously like it to go as quick as possible. We plan that within a week of the funding bill being passed, we will have grant agreements sent out to all the nonprofit agencies that will be adminstering the program and all of the necessary program guidance they'll need to start working with tenants and landlords. We'll have everything published in terms of the application documents and all of the processes that a tenant and landlord will need to go through to be successful in their application. We have all that ready to go, we just need the funds to be appropriated."
Both Rose and Hufnagel pointed out that if they don't spend the money, MSHDA risks losing money. If 65% of the money does not get spent or obligated by September 30, 2021, the federal government will take back any excess funds. Though September might seem like a ways away, time is running out: a report from the Department of Labor and Economic Opportunity says that if the program began on February 1, Michigan would need to obligate over $50 million a month to meet the spending threshold. If the program launches on March 1, the state will need to spend over $60 million a month to meet the goal. If this doesn't happen, the federal government could recapture over $200 million worth of rental and utility assistance—money that would otherwise go into the Michigan economy.
"We do think the installments would complicate the process of hitting the 75% threshhold so that is a concern," Rose says.
A spokesperson for Representative Albert said the bills allocating the money are on the agenda for February 3.
The same spokesperson issued the following statement from Rep. Albert:
“The Michigan House is already taking steps to approve this rent payment assistance as part of our COVID-19 recovery plan. Measures that include a portion of this funding will be discussed and possibly voted on in the House Appropriations Committee this week. “Federal guidelines call for 65 percent of the available federal rent assistance funding to be expended by Sept. 30. Our plan, likely to be up for a vote soon, would allocate 25 percent of the funding immediately. More funding would be released at a later point. We are calling for releasing this funding in installments simply to ensure accountability and transparency in the process.”