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Minnesota lawmakers are close to putting up $50 million in emergency rental assistance funding to respond to an increase in evictions following the pandemic.
House File 1440 by Rep. Mike Howard was approved by the Ways and Means committee last week and is awaiting scheduling for the entire House. It would apply the money to the existing Family Homeless Prevention and Assistance Program under Minnesota Housing.
Howard said the state’s two rental assistance programs during the pandemic helped people stay in rental units and provided money to landlords. The last of those programs, RentHelpMN, stopped taking applications a year ago and stopped making payments last fall.
Howard, a Richfield DFLer, said many tenants still need help and a program like this could head off some evictions. He said United Way’s 211 helpline took 400,000 calls for help last year with 64% of those being concerns for housing assistance. That same year there were 20,000 evictions.
“We have a multi-layered, long-term challenge with our housing crisis that requires that we pursue both immediate and long-term solutions,” Howard told the Ways and Means Committee. “This bill represents the crisis folks are facing right now and will help us keep folks stable in their homes.”
It could well be the first of two, $50 million appropriations to the agency to help tenants pay back rent and some forward rent. The second allocation could come through the regular budgeting process at the end of the session, said Howard, who is chair of the House Housing committee. But he wants the Legislature to adopt his bill to get money flowing more quickly.
The Senate version, sponsored by Senate Housing committee chair Lindsey Port, DFL-Burnsville, was before the Senate Finance Committee Thursday.
“This is the biggest program that we have that helps to keep people in their homes with emergency rental assistance,” Port said of the existing homeless prevention program. “And it is out of money.”
Republicans on the Finance Committee tried to lift a provision that would remove a 24-month cap on rental assistance that is in current law.
“I think this bill is an overreach,” Sen. Rich Draheim, R-Madison Lake. “Removing the 24-month time period doesn’t get at the underlying cause of the problem. After two years, you can’t afford rent? We have to change the situation of the people in that rental unit. They need to find something more affordable, increase assistance or their pay.”
Port agreed with Draheim’s characterization of her bill as a Band-Aid.
“This is absolutely a Band-Aid,” she said. “This does not fix the problem.” But it does respond quickly to increasing homelessness and evictions. Other planks in the DFL housing agenda seek to increase the supply of affordable housing.
The new money in the bills would flow through existing programs. The homeless prevention program already contracts with 22 nonprofits and government agencies across the state to receive applications and distribute the money. But it has distributed only around $5 million from unspent federal funds this year.
That hasn’t been enough to cover the requests. Jenny Larson, executive director of Three Rivers Community Action in Zumbrota, told the House Housing Committee last month that it receives allotments from the state quarterly under the homeless prevention program. The money is gone within a week, leaving no help available for tenants unable to cover rent payments who were not helped in that first week.
“I can tell you right now the current level of funding is not enough,” Larson said. “In 2022, we tracked that we turned away 300 households asking for $450,000 in assistance.” But that data only includes those who didn’t hang up when told there was no help available.
The RentHelpMN program faced problems with delays and processing, blamed in part because it had to be created from scratch by an agency not familiar with such a large-scale program. The small agency ended up needing 1,000 contract workers to take calls and process online applications.
But another cache of money for rental assistance is related to RentHelpMN and could begin flowing from Minnesota Housing, which recently approved a plan to spend $85 million in money leftover from the federal COVID relief bills. The money is both unspent funds left when the RentHelpMN program was ended and from four additional redistributions from the federal government from states and cities across the U.S. that didn’t spend all of the rental assistance funds they received. The agency was criticized by housing advocates for how long it was taking to get money to tenants facing eviction.
The agency’s board approved a plan (pages 9-20 here) Feb. 23 that would divide the money between rental assistance and funding construction of additional affordable housing. Using some money for new housing was part of the American Rescue Plan amendments.
The rental assistance through the new program would not follow the RentHelpMN program but would still use the web portal for partner local agencies to make applications with struggling tenants. RentHelpMN distributed $428 million in 2021 and 2022 to landlords that benefited 60,000 households, Minnesota Housing reported. An earlier program in 2020 used $85 million in state money received from Congress.
