Demand for Pennsylvania’s Whole-Home Repairs Program has been overwhelming, but more funding is on hold

The Whole-Home Repairs Program is a victim of its own success. Additional funding is held up by the state’s budget impasse.

People holding signs for Whole-Home Repairs

A rally in support of permanent funding for the Whole-Home Repairs Program in the Lehigh Valley on April 18, 2023. (Courtesy JP Kurish / Pennsylvania Senate Democratic Caucus)

This story originally appeared on Spotlight PA.

Stephanie Fritsch is terrified to take a shower.

She worries water will start seeping through the floor and into the room below, but she can’t afford to repair the leaky plumbing in her house in Dauphin County.

Determined not to miss her shot at getting help from Pennsylvania’s new home repair program, Fritsch started asking how to apply months before it had opened.

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She was crushed to learn in October that she was on the waitlist. With its current funding, the county expects to repair around 40 homes. Fritsch is #78.

“I’m completely frustrated,” she said. “I was counting on it.”

Last year, state lawmakers agreed to use $125 million in federal pandemic aid to create the Whole-Home Repairs Program, the largest state investment of its kind in years.

As counties have begun taking applications, overwhelming demand has left hundreds of people unable to get help, interviews with more than a dozen program administrators show. Another $50 million for the program was included in the state budget approved in August, but the money remains in limbo until state lawmakers can agree on additional legislation.

The program offers income-eligible homeowners grants to address problems like leaking roofs, unsafe electrical wiring, and broken furnaces. The funding can also be used to make properties more energy-efficient, or accessible for people with disabilities, as well as for construction-related workforce training.

“We’re not looking at cosmetics or wishlists — we’re looking at do you, tonight, when you lay down in your home have a roof that’s working and keeping your bedroom dry?” said Kristin Hamilton, executive director of Develop Tioga, which is running that county’s program.

Some of the program’s more ambitious goals, however, have proven harder to realize.

Under state law, counties can award grants as high as $50,000, more than is available through many existing home repair programs. But many counties have chosen to cap the grants at around half that amount to avoid prevailing wage requirements that administrators say would create major obstacles for small contractors.

The program was also intended to help preserve the supply of affordable rental housing by offering loans to landlords who own no more than five properties. Most counties, however, have chosen not to do so, wary of a requirement that they monitor the rents charged for 15 years after awarding the funding.

David Thomas, president and CEO of the Philadelphia Housing Development Corp., said he was “totally enthusiastic” about the state funding, but “totally blindsided” by some of the accompanying regulations.

“I was hoping those dollars would be more flexible,” he said.

With ongoing labor shortages in the construction industry, some counties are having difficulty finding contractors to do the work.

“They’re literally so busy they just don’t need us,” said Mikayla Kitchen, who works at the Cumberland County Housing and Redevelopment Authorities.

The county has been sending out fliers and cold-calling contractors, she said, but the shortage could cause successful applicants to wait as long as 18 months before work on their homes can start.

Some homeowners on the waitlist, meanwhile, are living in grim conditions. One family, Kitchen said, is confined to a few rooms on the first floor of their house, after the roof caved in and left the entire top floor open to the elements.

A rush of demand

​​The Whole-Home Repairs Program is a rare bipartisan success story.

Introduced by state Sen. Nikil Saval, a progressive Democrat from Philadelphia, the proposal won support from conservative Republicans representing rural areas that have suffered from years of disinvestment and blight.

“If we can breathe new life into some of our old towns by repairing homes, that’s good for everyone,” said state Sen. David Argall of Schuylkill County, a key Republican supporter of the program.

“I’d much prefer to work on home repairs than demolition.”

Pennsylvania has some of the oldest housing stock in the U.S. Almost 60% of homes in the commonwealth were built before 1970, according to a recent state report that found the number of uninhabitable vacant units was rising. The state’s aging housing stock “poses special risks to seniors and the disabled,” the report found.

The new program aims to address unsafe living conditions, allow older people to stay in their homes longer, and lower utility bills — often a major burden for low-income families — by making houses more energy-efficient. The program also targets long-standing labor shortages in the construction industry by providing funding for job training and workforce development.

“There simply wasn’t anything like this before that attacked all these components of the problem,” Saval said.

While some local governments already offered home repair grants through a patchwork of existing, smaller programs, county officials said the new state funding was especially welcome after the pandemic strained residents’ finances and inflation drove up the cost of repairs.

Many counties have been flooded with applications.

In Lehigh County, half of the $2.7 million allocation was reserved for people already waiting for help from existing programs, said Michael Handzo, a director at Community Action Lehigh Valley.

The other half was spoken for within 24 hours of the new program launching.

“As we expected, the demand for this program is just staggering,” he said.

In Potter County, the initial allocation will cover repairs for about five homeowners, but roughly 40 are on the waitlist.

Indiana County has enough funding for around 25 projects, but received more than three times as many applications.

Maryann Velez, who runs a nonprofit in Luzerne County, helped around 35 homeowners apply, but none received funding. “You could just hear the defeat in their voices,” she said. “It’s very disheartening.”

Administrative challenges

Unlike many other home repair initiatives, the new state program aims to benefit renters as well as homeowners.

Under the program’s rules, counties can offer loans to landlords who charge affordable rents and own no more than five properties. The loans can be forgiven if landlords limit rent increases and extend leases for current tenants.

Of the 64 counties that applied for funding, however, only 10 offer loans to landlords, according to the Department of Community and Economic Development. Another six are still considering it.

The requirements are intended to ensure landlords don’t accept the funding, then raise rents on the newly rehabbed units and potentially displace tenants. But administrators told Spotlight PA they were deterred by the complexity of the rules and a requirement to monitor rents for 15 years after awarding the funding, with no clear way to pay for the ongoing costs.

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“Leaving out landlords is a problem,” said Phyllis Chamberlain, executive director of the Housing Alliance of Pennsylvania, which has been working with administrators on suggested improvements to the program, including reducing the 15-year time frame and giving counties more flexibility in deciding which landlords are eligible.

Even when counties have opened their programs to landlords, some say they haven’t

received much interest. Landlords are often reluctant to agree to limit rent increases, which can restrict their ability to offset future property tax increases or higher mortgage costs.

Another element that sets the new program apart is the generous size of the grants available, up to $50,000. But around 22 counties offer lower maximum grant amounts. Of those, most have capped the grants at just under $25,000 to avoid requiring contractors to comply with the state’s prevailing wage law, which sets minimum pay rates for workers on publicly-funded construction projects.

“It’s a shame, because it’s limiting the amount of work that we can do in some of these homes,” said Caitlin Steel, who is helping to run the program in York County, which typically caps the grants at just under $25,000.

Large contractors are more likely to have experience with prevailing wage projects, but most aren’t interested in the smaller repair jobs available through the new program, administrators and construction industry sources said. Small contractors, on the other hand, often don’t have the inclination or resources to complete the necessary paperwork.

Some administrators said limiting grant amounts would stretch the funding further and allow them to help more homeowners. Others noted that high inflation over the past few years has increased the cost of labor and some building supplies, so lower grant amounts don’t go as far as they once would have.

“What you’re able to do with $25,000 has diminished,” said David Thomas, of the Philadelphia Housing Development Corp. “I am asking that we reconsider the threshold for prevailing wage and how it applies so you’re not throwing the baby out with the bathwater.”

The Housing Alliance recommends exempting the program from state prevailing wage requirements altogether. State Sen. Saval told Spotlight PA he would have concerns about that, saying that one of the program’s goals was to create “family-sustaining jobs.”

Contractors in short supply

For some counties, the biggest challenge is finding contractors to do the repair work.

In March, Dave Young, executive director of Schuylkill Community Action, sent a request for proposals to 40 local contractors.

He received no responses.

The lack of interest left him “disappointed but not surprised,” Young said. The pool of contractors available to work on the agency’s other rehab programs has dwindled over the past decade, he said.

Between the Whole-Home Repairs Program and other initiatives, the agency had more than 20 projects waiting for bids, Young said in late September. Some had been put out to bid three or four times with no responses.

The contractor shortage leaves even applicants who have been approved for grants with long waits for their homes to get fixed. Some homeowners could be waiting until 2026, Young said.

These challenges are widespread in local home repair and construction programs, according to a recent Housing Alliance survey. Of the 69 administrators who responded, almost all said they had experienced contractor shortages. “The scale of many smaller home repair projects is not enough for local contractors balanced with their view of “excessive” paperwork, compliance reporting, and strict program requirements,” the survey found.

Those challenges are compounded by a serious labor shortage in the construction industry, as older workers retire and fewer young people enter the business.

“There just aren’t enough people in the industry right now to meet the demand,” said Daniel Durden, CEO of the Pennsylvania Builders Association, which represents the residential construction industry.

The new program aims to address the contractor shortage by requiring counties to fund local training initiatives, but those efforts could take several years to yield results.

With so much work available, contractors have fewer incentives to take part in publicly funded programs, Durden said, especially if they haven’t worked with a county government or nonprofit provider before.

“If you have to triage what you’re going to do, you’d rather finish a kitchen for a homeowner than be inclined to open an email and respond to a total stranger,” he said.

More funding on hold

Angelo Ortega lives with his mother and brother in Allentown. After the remnants of Hurricane Ida battered parts of Pennsylvania in late 2021, their basement flooded, leaving large puddles that took days to mop up. Next came mildew, then crusty black mold that edged along the walls, sprouting where the water had been.

Ortega said his mother, who is 78 and has asthma, couldn’t go down to the basement without feeling weak, like there was pressure in her chest. They kept two dehumidifiers running day and night.

A member of Make the Road Pennsylvania, a progressive advocacy group, Ortega helped campaign for the creation of the home repair program. He remembers applying in a rush during the summer, knowing there was only a small window of time to get the paperwork done.

Several months later, he was elated to hear that his application was successful. The inspector who came to look at the storm damage flagged other issues that had contributed to the flooding, and that his family hadn’t known about.

Their experience, Ortega said, shows why the program urgently needs more money.

Additional funding, however, has been held up in Harrisburg for months. The state budget included another $50 million for the program, but lawmakers have yet to reach an agreement on additional legislation that must be passed before the money can be spent.

The code bill required to release the second round of funding has ping-ponged between the two chambers of the state legislature. Senate Republicans approved a version of the bill that did not include more funding for the home repair program, which Democrats later restored when the House, where they have a one-vote majority, passed the legislation. The bill is once again under consideration in the state Senate.

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