Title
Emergency Rental Assistance Program/American Rescue Plan Act Rent and Utility Assistance Recommendations
Description
This report provides information regarding the City's past, current, and upcoming emergency rental and utility assistance efforts in response to the COVID-19 pandemic.
THIS ITEM IS FOR DISCUSSION AND POSSIBLE ACTION.
Report
Summary
In response to the COVID-19 pandemic, many jurisdictions, including the City of Phoenix, created or expanded emergency rental/mortgage and utility assistance programs to support individuals and families impacted by COVID-19, as many were unexpectedly facing eviction and homelessness. The following provides a summary of programs implemented by the City and the future expansion of the current Emergency Rental Assistance (ERA) Program.
Past and Current Programs
In 2020, the City Council approved more than $29 million to provide emergency utility, rent and mortgage assistance services to Phoenix residents impacted by the COVID-19 pandemic. Approximately 6,200 households were assisted by the Human Services Department and Wildfire.
This amount came from the City's $293 million Coronavirus Relief Fund (CRF) allocation from the 2020 CARES Act, enacted on March 27, 2020, and provided financial services to residents needing rent, mortgage, and utility assistance. The Neighborhood Services Department contracted with Wildfire, an experienced nonprofit corporation focused on ending poverty, to administer the program and disburse funds to residents. Wildfire partners with a large number of service providers locally, more than 20 nonprofit and community action agencies throughout Maricopa County.
In February 2021, the City Council approved $51.1 million for the City's ERA 1.0 Program to provide financial services to residents needing rent and utility assistance. As of Aug. 30, the City's ERA Program has assisted 4,231 households and has disbursed approximately $32.4 million, expending 70 percent of program funds.
Funding for this program came from the Consolidated Appropriations Act of 2021, enacted on Dec. 27, 2020. To best serve the community, the City agreed to administer $26.1 million through the Human Services Department and the remaining $25 million through Wildfire. The City's ERA Program launched on March 8, 2021, with the Human Services Department scheduling and completing appointments through its Central Intake Line (602) 534-AIDE (2433). On March 22, 2021, Wildfire opened its online application portal and has since been receiving and completing ERA applications through 11 subcontracted agencies. Deliverables to date are shown in Attachment A.
Eligible households for ERA funds must be at or below 80 percent Area Median Income (AMI), have one or more individuals who qualify for unemployment benefits or experienced a reduction in household income, incurred significant costs, or experienced other financial hardship due to COVID-19, and can demonstrate a risk of experiencing homelessness or housing instability. The Human Services Department prioritizes applications if the household is experiencing one of the following emergency scenarios: facing eviction or pending a 24-hour lockout; disconnected or pending 24-hour shut-off notice of utility services; no cooling/heating or water in the household; current domestic violence or crime victim; or facing homelessness.
Challenges and Improvements
While the relief programs have provided millions of dollars of rent and utility assistance to households, program challenges have been identified: completeness of applications by residents and staff resources. These challenges are not unique to the City and programs nationwide are reporting the same issues. To address these challenges, the City has made a number of program improvements:
- In July, the City hired a contract ERA Administrator to oversee the ERA Program who mapped the application process from start to finish to identify program efficiencies. Staff noted nearly 80 percent of caseworker time was expended in the document collection phase. As a result, a Document Center has been created and several new staff were hired in August. Total new staff will be 58. This improvement will result in increased complete applications reaching caseworkers, leading to a more efficient process of disbursing funds to residents.
- Beginning in September, the Family Services Centers will extend hours of operation from 8 a.m. to 5 p.m. to 7 a.m. to 6 p.m. during the week and the same hours on Saturday. This will increase accessibility through more flexible appointment times for residents.
- Since July, Human Services staff has assisted Wildfire with completing online applications. As of Aug. 23, staff has assisted 91 households that applied through the online portal.
- The City partnered with Maricopa Association of Governments (MAG) and created an income proxy tool to assist caseworkers and residents in streamlining the ERA Program income eligibility requirement (Attachment B).
- Since the end of July, the City partnered with a landlord/tenant law firm to identify persons scheduled for a lockout from their home or eviction proceeding and offered expedited ERA Program assistance; 53 households were served, totaling $414,792 in financial services.
Upcoming Programs - ERA 2.0 and ARPA Program
ERA 2.0 Program
Under the American Rescue Plan Act (ARPA) of 2021, the federal government allocated $21.5 billion to continue the national emergency rental assistance program; this program is known as ERA 2.0. The City has been allocated a total of $55.3 million in ERA 2.0 funding. Eligibility requirements are similar to ERA 1.0 and the U.S. Treasury has directed jurisdictions to implement this program consistently with ERA 1.0 to reduce administrative burdens for grantees.
Wildfire continues to process applications under ERA 1.0. Current discussions are underway with Wildfire regarding ERA 2.0 funding. Several options are being discussed for ERA 2.0 implementation. One option is for Wildfire to accept a certain allocation, similar to ERA 1.0, and continue processing online applications. The City would continue, as it does today, to assist and process online applications. The second option is for the City to pay Wildfire an administration fee to keep the online portal open for residents, and City staff will continue to process online applications. In this option, all applications, whether over the phone or online, would be completed by Human Services staff. One thing is certain - residents will experience no negative impact to applying no matter which path is taken. The City will continue to process applications without interruption to critical services to the community. Staff will provide City Council the final program contract later this fall.
ARPA Program
On June 8, 2021, the City Council approved the City's ARPA Strategic Plan which outlined program summaries for the City's Coronavirus State and Local Fiscal Recovery Funds ARPA allocation. Included was $10 million to provide additional rent and utility assistance to Phoenix residents that do not qualify for ERA assistance. The current ERA Program funding does not assist residents with rent and utility payments if the household income is above 80 percent of Area Median Income (AMI) resulting in an unmet need that ARPA funding can cover. It is recommended to use $4 million to provide funding to applicants with a household income between 80 percent and 120 percent AMI to receive services under the same guidelines as the ERA Program.
Deferred Payment Arrangement Recovery Program
Included under this ARPA program is the allocation of $5 million to the City's Deferred Payment Arrangement (DPA) Recovery Program. This program will assist City Services customers with a DPA by providing bill relief equal to two-thirds of their outstanding DPA balance as of Oct. 1, 2021.
DPAs were launched in March 2020 to assist customers facing financial hardship due to COVID-19. DPAs allowed residential customers to set aside any outstanding balance without being assessed late fees or the danger of service interruption. As of Aug. 30, the total outstanding residential delinquency was greater than $10 million across more than 21,000 accounts.
DPAs will end on Sept. 30, 2021. At that point in time, any single-family residential customer who is enrolled in a DPA that meets the eligibility criteria will be enrolled into the DPA Recovery Program. Customers will be asked to pay one-third of their outstanding DPA balance as of Oct. 1, 2021, which can be paid in up to four consecutive monthly installments. Once one-third of the outstanding balance has been paid, ARPA funding will be directly applied to the remaining two-thirds.
Landlord Incentive Program
Additionally, $1 million of funding will be used for the Housing Department’s Landlord Incentive Program. The Landlord Incentive Program incentivizes Phoenix landlords to participate in the Section 8 program and make their properties available to Housing Choice Voucher (HCV) holders. The program offers a $500 signing bonus for Phoenix landlords that execute a Section 8 Housing Assistance Payment (HAP) contract. This incentive is paid to landlords who manage regular HCV, Veterans Affairs Supportive Housing (VASH) vouchers, and mainstream vouchers, including landlords housing the homeless population. The incentive is per unit and an owner can be eligible for more than one incentive if the owner leases multiple units. The HAP contracts are valid for one year, which means that residents with housing vouchers will be assured a place to live for at least 12 months.
The Landlord Incentive Program was first launched on Sept. 1, 2020, using $500,000 of Federal CARES Act funding as an innovative approach to combat the shrinking number of units and fewer affordable housing opportunities for Phoenix voucher holders. From September 2020 through August 2021, incentives were paid to 982 landlords, of which 127 were first-time Section 8 landlords. The original CARES Act funding allocation will soon be exhausted. The additional $1 million ARPA Funding will double the original allocation of funds to allow the Landlord Incentive Program to continue and help sustain/increase the affordable housing stock options in the community.
Recommendations
Staff seeks approval to implement the Utility and Rent Assistance ARPA Program as follows: $4 million will provide households between 80 percent and 120 percent AMI financial services, $5 million will fund the Deferred Payment Arrangement Recovery Plan, and $1 million will fund the Landlord Incentive Program.
The City will implement ERA 2.0 and ARPA program funding seamlessly to the community and will bring back the Wildfire contract for City Council approval later this fall. Residents will continue to apply for assistance by scheduling an appointment or completing an online application. The addition of the Document Center will provide additional capacity to enhance efforts to proactively serve residents under imminent threat of eviction once the current moratorium is lifted. The additional staffing will provide expanded outreach and intervention strategies with landlords and other community stakeholders. As additional efficiencies are identified, staff will implement new procedures, ensuring residents are receiving as much assistance as possible, in the most efficient and timely manner.
Concurrence/Previous Council Action
The City Council approved:
- The Emergency Rental Assistance 1.0 (Ordinance S-47291) on Feb. 9, 2021, by a vote of 7-1; and
- The City's ARPA Strategic Plan on June 8, 2021, by a vote of 7-2.
Department
Responsible Department
This item is submitted by Deputy City Managers Gina Montes and Karen Peters, and the Human Services, Housing, and Water Services departments.