The City of Philadelphia is racing against the clock to disperse state and federal money for it’s fourth phase of rental assistance before the deadlines.
Philadelphia has to use 65% of nearly $57 million — equaling about $37 million — of federal funds coming from the state by the end of the month or else the money has to be returned.
As of Friday, the city had spent $34 million, three months into the program’s opening. Funds only began reaching applicants’ households a few weeks ago.
Greg Heller, senior vice president at Philadelphia Housing Development Corporation, said he’s confident the city will reach that benchmark since it is on track to disperse about six to seven million dollars per week.
“At the pace we’re going, we should be through 65% of the state money by the end of week,” he said.
Both landlords and housing advocates agree that the latest phase is running more smoothly than three previous iterations, yet room for improvement remains.
“The program is just now getting up and running in terms of issuing payments,” said Rachel Garland, managing attorney of the housing unit at Community Legal Services, a legal aid nonprofit. “It’s been a slow process, and Philadelphia has definitely moved faster than many other places around the country, but when you’re a tenant waiting for money, two months can feel like a very long time.”
In many cases, people can’t see how far along they are in the process, leaving some in limbo.
“A lot of applications are rolling in but the approvals are taking longer than expected which puts landlords in a tight predicament given that they aren’t receiving funds and they still haven’t received payment from the tenants,” Andre Del Valle, director of government affairs at the Pennsylvania Apartment Association, said.
Del Valle said he hopes Heller is right about the city’s capacity to spend down the aid money. He said he doesn’t want to see the city lose needed resources for housing like the state did when it didn’t meet a spending deadline and money earmarked for rental assistance went to the Department of Corrections.
“We don’t want to leave any dollars left at the table because it’s going to hurt both the landlords and tenants, leading to housing instability,” he said.
Philadelphia housing officials have reviewed about one-third of the over 35,000 total applications for the latest phase of relief and approved 16%.
The ideal timeline for the process is 45 days, according to a city spokesperson. It tends to take longer because only about 38% of submitted applications are complete and it takes time to gather all the needed information.
A risk of losing aid dollars
There’s about 2,000 evictions that can potentially move forward now that Philadelphia’s ban on lockouts has been lifted. Although the city did not extend the moratorium, it did extend the requirement for landlords to apply for rental assistance and go through the eviction diversion program in part to buy some extra time.
“Without ongoing rental assistance, we’re not going to be able to recover economically from this pandemic,” Garland said. “The balances that tenants owe because they’ve been out of work for the past 18 months is not something that can be resolved by a simple payment plan. Without rental assistance, we’re facing a spike in evictions.”
As of Friday, 12,196 landlords had registered for the aid program. Of the nearly 30,000 tenant-initiated applications, landlords have finalized only 56%. If landlords are unresponsive, the funds go straight to the tenant.
This fourth phase of assistance will allow up to 18 months of utility assistance. Nearly half of all applicants —16,834 — requested that help.
The city has another spending deadline in the fall. By Sept. 30, 65% of a different pot of federal grant dollars must be spent down. As of Friday, the city hasn’t tapped into any of it for rental assistance.
Heller said the plan is to finish using up the state money and then toggle to the first pool of the federal money. That means that the city will have to disperse $30.6 million in two-and-a-half months. But he said he’s not worried about that. He estimates the city will be able to disperse all of that in four weeks.
“We’re counting our chickens,” Heller said. “There’s all kinds of things that can happen and everyone’s definitely working around the clock, but I feel relatively good about hitting on our benchmarks.”
Instead of using that first pool, the city has used a small portion, about $1.2 million, of a second pool of federal money with a later deadline of March 31, 2022. The reason for this, according to Heller, is because the second pool of federal funds can give tenants relief for up to 18 months, rather than the 15 months permitted by the first pool of federal money.
The progress comes after the program got off to a slow start. Philadelphia officials expected the fourth phase of aid to go live at the end of March. Some hiccups meant that tenants couldn’t start applying until April 5. A silver lining was that landlords could pre-register, and 4,012 took that opportunity.
While the city continues to work on dispersing funds, Philadelphia’s eviction moratorium expired Wednesday and there is no moratorium on the state level. The only major protection still in place is the federal Centers of Disease Control ban, but that is set to expire at the end of this month.
As of Friday, the city has spent about $35.1 million of $127.5 million in total Emergency Rental Assistance Program funds for phase four, including both state and federal funds.
About $100.8 million in total rental aid has gone to 20,972 Philadelphia households since spring 2020.
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