Carol and Norm Linnell are among hundreds of landlords who are growing increasingly upset by the slow pace of rental aid payments made by Minnesota’s state housing agency.
Retirees living in Hudson, Wis., the Linnells own 10 rental housing units in St. Paul’s Midway neighborhood.
“We rely on our rental income to supplement our Social Security. We were self-employed, so no pension,” Carol wrote in an email. “With four of our 10 tenants unable to pay their rent (due to income lost during the pandemic), we are short about $22,000 in our checkbook.”
The state and local governments have received $672 million in federal emergency pandemic aid to pay back rent for thousands of tenants, but the RentHelpMN assistance payments are trickling out sluggishly.
The Linnells’ tenants applied for aid when the program opened in April. Nearly four months later, the Linnells still haven’t received a single payment, and the agency’s representatives can’t or won’t answer Carol’s questions about the program.
“They can give no specifics,” she said. “We are told to just wait … I’m totally frustrated.”
The program’s administrator, Minnesota Housing Finance Commissioner Jennifer Ho, acknowledges the stress and anxiety experienced by renters and landlords who are waiting for checks or bank deposits.
Slow rollout criticized
During a two-hour Senate committee hearing this past week, Ho told lawmakers that as of July 1, her agency had received more than 28,000 applications for aid. By Thursday, it had paid $15.3 million in more than 3,100 payments to housing providers and utilities. That is $4.3 million more than the agency had paid out on July 1, but it’s just over 10 percent of the $151 million in rental assistance that has been requested.
To those seeking help, she said: “Just know that help is on the way if you have submitted and qualified for the program. …
“With the amount of resources we have available, we will be able to pay every eligible application that has been submitted to date.”
But it will take time to make sure the money goes only to those who really need it while avoiding fraudulent or duplicate payments, she said.
The meeting was expected to be a confirmation hearing for Ho, one of Gov. Tim Walz’s first appointments in December 2018. Some Republican lawmakers have harshly criticized her for the agency’s slow rollout of the rental aid program. But Housing Committee Chair Rich Draheim, R-Madison Lake, said at the start of the hearing that the panel lacked the legal authority to make a confirmation recommendation and instead would focus on gathering information on the program.
Ho was one of about six Walz appointees who were rumored to be targets for removal by the Senate Republican majority. But the Senate adjourned for the year Thursday without acting on Ho’s appointment, and GOP Majority Leader Paul Gazelka said her job is secure — at least for now.
A Fridley native, Ho has been working on housing and homelessness issues for more than two decades. She had been a senior policy adviser at the U.S. Department of Housing and Urban Development under former President Barack Obama, previously worked on the nation’s first comprehensive federal homelessness plan and helped launch the Mayors Challenge to End Veterans Homelessness with first lady Michelle Obama. Before going to Washington, she worked on housing and homelessness programs in Minnesota.
COVID's costly impact
An estimated 69,000 Minnesota households owed a combined total of $231 million in rent, or $3,300 per household, in early June, according to the National Equity Atlas, a data tool maintained by the University of Southern California Equity Research Institute and the research firm PolicyLink.
In Minnesota, more than two-thirds of the applicants for rental assistance identify as Black, Indigenous or people of color, more than half the households have minor children and 41 percent of applicants have recently been unemployed, the Minnesota Housing Finance Agency reported this month.
At the legislative hearing, Republican senators grilled Ho on the reasons for the long delays between receiving applications and making payments to landlords who are owed back rent and are at risk of being unable to pay mortgages, employees and other expenses.
The commissioner said her agency, which normally distributes about $30 million in federal funds each year, will dole out more than $500 million in the next two years. That changes the “nature, scope and scale at which the agency must operate,” she said.
Last year, the MHFA set up a federally funding housing assistance program that provided $85 million in aid to more than 27,000 households.
“We built the new program (this year) from the ground up based on complex and changing (U.S.) Treasury guidance. … We are achieving our goal of streamlining the program for simplicity and conducting aggressive public outreach to reach those with the most barriers to applying,” including people with limited English language proficiency, no internet access, seniors, people of color, those with disabilities and many who are not accustomed to accessing government services, Ho said.
“Our rate of payments continues to rise steeply as the process gains steam.”
Clearing the backlog
During the program’s first 10 days of operation in April, the agency received 13,835 applications for aid, she said. Nearly half of them required more information from renters and landlords.
That volume of requests created a “pig in the pipeline,” a backlog of applications that staff are just now clearing, she said.
Then in steps “more complicated than anticipated,” a firm that MHFA hired to process rental assistance applications had to confirm bank accounts, tax records, property ownership and other details, she said. That firm, Witt O’Brien, has expanded its staff from 115 processors in April to 215 now.
“We’re on the verge of things working very differently,” Ho said. “We’re seeing more applications going from ‘submitted but incomplete’ to ‘complete and approved for payment.’ ”
The commissioner acknowledged that Minnesota’s rollout was slower than some other states — and that was intentional.
“We were not out first, and I’m glad we didn’t try to be first because we watched some states that raced to get out first that tripped a little coming out of the gate,” she said. “We’ve been up and running continuously since April 20.”
Ho said she intends to be meticulous about spending the money properly because “I’m going to have to account for every penny to you and to the Treasury and to taxpayers.”
Evictions about to take off
Ho expects applications for aid to increase after the Legislature passed a bill that phases out Walz’s ban on rental evictions. Starting this week, landlords can take legal action to remove tenants who have violated the non-economic terms of their leases. Those who owe back rent and aren’t eligible for rental assistance can be evicted starting Sept. 12. But renters who are eligible and have applied for state payments are protected against evictions until June 1, 2022.
Renters who have been financially hurt by the COVID-19 pandemic can get help to pay overdue rent and utilities back to March 13, 2020. They also may qualify for up to three months of future rent payments. Also eligible are tenants who are at risk of falling behind on paying rent because of the pandemic.
To be eligible for assistance, renters must have incomes at or below 80 percent of the “area median income” in their county. In the east metro, that income level is $55,950 for a single person, $63,950 for a couple and $79,900 for a family of four.
For help, go online to RentHelpMN.org or call the Greater Twin Cities United Way’s 211 helpline (651-291-0211).