After a slow start last fall, the state office tasked with helping tenants who are experiencing financial hardship due to the COVID-19 pandemic has awarded $678 million in rental assistance, but experts question whether the funds will be sufficient to stem the rising tide of eviction cases following the end of a national eviction moratorium in late August.
In October, Gov. Roy Cooper launched HOPE, the Housing Opportunities and Prevention of Evictions program, tapping the N.C. Office of Recovery and Resiliency to distribute rental and utility assistance funds to 88 counties through local governments and nonprofits. Applications for the program close at 6 p.m. today.
“When we stood up HOPE 1.0, it was a brand-new effort,” said Laura Hogshead, Office of Recovery and Resiliency chief operating officer. “None of us (at the state level) had ever done it. We were asked to stand up something new very quickly. And so we made some program design decisions that we then undecided for HOPE 2.0.”
The initial phase of the program was hampered by complicated, decentralized logistics and limited staff unable to process a “huge wave of applications” efficiently, according to Hogshead. The program shut down after three weeks.
Hogshead estimated an average turnaround period, from application to disbursement, of “weeks to months” during the first phase. She said her agency didn’t “have the transparency that we would need to make a good estimate on the number of days” because it was reimbursing community partners who were making the payments.
“Some awards got hung up for a very long time,” Hogshead said.
The office made changes that included centralizing payments and compliance procedures and adding 300 temporary employees to a full-time staff of about 70 at an agency primarily responsible for federal hurricane relief funds.
As a result of these changes, the average turnaround has been reduced to 14-21 days, according to Hogshead, who said it might have taken weeks or months in earlier days.
Office of Recovery and Resiliency officials were unable to provide a clear timeline for the $133 million in HOPE 1.0 payments, saying reimbursements to 20 nonprofit community partners continued through the summer, and an exhaustive accounting process, dependent on reports from those partners, is still taking place.
The data is also skewed because some of those partnering organizations didn’t ask for reimbursements for several weeks or months following payments, officials said.
Since June, HOPE payments have rolled out at a much quicker pace. According to the U.S. Treasury Department, HOPE 2.0 disbursements to North Carolina households have averaged $82 million per month from July through October. Spending peaked in August, totaling $133 million for the month.
As of Dec. 13, the Office of Recovery and Resiliency has awarded $744 million and paid $585 million of those awards to landlords and utility companies, according to Hogshead.
In late November, Hogshead said she expected to complete payments by early spring or summer 2022.
Funding for the second phase of HOPE initially came from a coronavirus relief act that Congress passed at the end of 2020. But the Treasury Department didn’t issue guidelines on how states and local governments could allocate that money until the end of February. Furthermore, those guidelines came in the form of a nonbinding “frequently asked questions” document.
At the state level, Republicans in the General Assembly pushed to loosen restrictions on the flow of federal dollars to landlords and tenants.
A bill signed into law by Gov. Cooper late last week allows landlords to file HOPE applications on behalf of their tenants. It also opens applications to tenants applying solely for utility relief and to cover the cost of hotels for eligible tenants and late fees owed to landlords and hotel costs.
When asked about the bill hours before it passed, Hogshead said she favors “anything that will help get people assistance and keep them in their homes” but also worries that too many program changes could slow the process down.
“We don’t want those slowdowns to mean that someone gets evicted while we are making the back-end policy and system changes that are needed,” Hogshead said.
She said her agency would look to incorporate most measures of the bill but do so carefully to avoid “screwing up how fast the money can get out the door.”
Confusion abounds
From Sept. 4 2020, to July 31, 2021, the Centers for Disease Control and Prevention issued an eviction moratorium, preventing landlords from evicting tenants whom the pandemic had affected.
Confusion and controversy surrounded the moratorium since it took effect, according to Jesse McCoy, a Raleigh civil rights attorney and Duke University School of Law professor.
“When it came out, there was a lot of confusion amongst people working in this industry about what, exactly, are we halting,” McCoy said.
“Are we halting the ability to have our cases heard? Are we halting the ability to have eviction cases filed? Or are we simply halting the ability of the sheriff to execute the writ? There wasn’t a lot of guidance at that time about what was happening.”
Kathryn Sabbeth, housing law professor at the UNC School of Law, said varying interpretations of the CDC order also added to the whirlwind of information.
“I think confusion is a gracious way of putting it,” Sabbeth said. “For some actors, there’s genuine confusion. And for others, there’s an agenda. And sometimes that agenda causes people to create confusion.”
To be eligible for protection, the CDC order required applicants to give signed declarations to their landlords that they met five specific criteria.
Sabbeth described lots of fights about whether the order allows landlords “to contest the veracity of the underlying statements about the five criteria.”
Gov. Cooper ordered a statewide eviction moratorium in October 2020, in part to strengthen and clarify the national moratorium.
On June 29, 2021, the U.S. Supreme Court ruled against a group of landlords and real estate agents in Georgia and Alabama who argued that the CDC exceeded its authority by ordering the moratorium.
On the same day, however, the N.C. Council of State voted along party lines to reject a one-month extension of the governor’s moratorium. Six Republicans on the council voted against it and three Democrats voted to extend it one more month to match the CDC moratorium’s expiration date.
At the time, Cooper said many residents may, as a result, be “unaware of the protections available to them” under the CDC moratorium and be evicted unnecessarily.
Janae Moore, director of governmental affairs for the Apartment Association of North Carolina, said the CDC moratorium “created uncertainty and exacerbated hardships for property owners and the renters it was intended to protect.” She said landlords rely on rental payments to cover mortgages, staff salaries, property taxes, maintenance and utility costs.
“During the moratorium, providers struggled to meet these obligations while being required to maintain and provide a continuous service at optimal levels,” Moore said.
“Small housing providers make up a significant proportion of rental property owners overall, and many housing providers, in general, could not sustain substantial losses of rental income.”
The situation has a disproportionate effect on particular communities. Black women with children are more likely to be evicted than anyone else, according to Sabbeth.
“This is an issue of racial justice and gender justice,” she said. “Empirical evidence indicates that children in the home is the single factor most highly correlated with eviction.”
When the eviction order expired, HOPE applications spiked. They flooded in again after the U.S. Supreme Court struck down a second CDC moratorium on Aug. 26, according to Hogshead.
After the U.S. Supreme Court’s decision, the N.C. Judicial Branch website urged tenants and landlords to look toward HOPE to solve disputes without litigation and cautioned that courts across the state would “likely see an increase” in such disputes in coming weeks and months.
Cathy Robertson, chair of the N.C. Realtors Association’s property management division and vice president of T.E. Johnson & Sons, a large Winston-Salem property management firm, said in a statement to Carolina Public Press that she has not seen an evictions crisis in recent weeks.
“We are very happy that the crisis in evictions that was predicted after the moratoria were lifted did not come to pass,” Robertson said.
Furthermore, T.E. Johnson & Sons, which manages 850 condominiums, single-family homes and multifamily units throughout the Triad region, has seen “more rental assistance funds become available and a better process for obtaining those funds,” according to Robertson.
“Otherwise, business seems to have largely returned to normal,” Robertson said.
While some business owners like Robertson sense a return to normalcy, housing advocates and members of affected communities say they continue to feel the effects of the pandemic.
The Apartment Association of North Carolina has seen a shortage of rental housing availability and increasing operational costs due to a shortage of rental housing availability, according to Moore. The lack of supply has caused a widespread increase in rental rates.
Indeed, statewide rental rates have steadily increased since December 2012, according to data compiled by Apartment List, an online marketplace for apartment listings. From January to December 2020, the median rental estimate in North Carolina hovered around $1,000 — never going above or below $6 from that benchmark.
Beginning in January 2021, median rental estimates climbed steadily, reaching $1,214 in October before tapering off to $1,213 in November.
In Charlotte, many landlords and property managers are refusing federal rental assistance and simply not renewing leases of low-income families, according to Kenny Robinson of Freedom Fighting Missionaries, a nonprofit that helps formerly incarcerated, homeless and elderly populations find affordable housing.
The technique of not renewing leases allows landlords to avoid the eviction process while renting instead to individuals moving to Charlotte for high-paying jobs.
Although eviction cases are active in Mecklenburg County, only cases of “extraordinary circumstances” have reached a point where an actual eviction has occurred, he said.
“No apartment complex or property manager wants to be splattered on the news for being the person who kicked out a family of five.”
Sabbeth said she expects eviction numbers to continue climbing steadily, and contrary to popular belief, evictions did not cease during the moratorium.
“Combined with extraordinary advocacy, the moratoriums did stem the tide, but nonetheless disturbing numbers of families were evicted throughout the pandemic,” Sabbeth said.
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