JANUARY 2021: HOUSING UPDATE

It is (finally) 2021. The start of a new year, with the hope and promise of positive change. The time when we envision successful outcomes to the resolutions we just made. A time for new beginnings, a chance to start over. Yet the first days of January feel eerily like the last days of December. Has anything changed? Will anything truly change? If there are changes, how can we be sure that they are for the better, or the best?

At the close of 2020, Congress passed another emergency COVID-19 relief package that provides some glimmers of hope. First, it extended the the federal eviction moratorium enacted by the U.S. Centers for Disease Control and Prevention (CDC) through January 31, 2021. Second, it included $25 billion in assistance for housing. Of that total, it is estimated that North Carolina will receive over $698 million. Third, it postponed the deadline for communities to spend the Coronavirus Relief funds provided in the initial CARES Act, from December 30, 2020 to December 31, 2021.

With $70 billion owed by U.S. renters in combined back rent, utilities, and late fees as of January 2021, this measure helps communities like Charlotte-Mecklenburg both stave off the incoming wave of evictions and support the local economy. This week’s blog post covers the key provisions in the COVID-19 relief package, and what it means for Charlotte-Mecklenburg.  

WHAT IS IN THE COVID-19 RELIEF BILL FOR HOUSING?

The $25 billion for housing assistance in the COVID-19 relief package will be funneled through the Coronavirus Relief Fund (CRF); and administered by the U.S. Department of the Treasury. Cities and counties with populations of 200,000 or more can receive a direct allocation (to be deducted from the total allocation from the state) from the Treasury Department. To learn more about estimates for housing assistance distributions, including the formula for calculating the local jurisdiction allocations, click here.)

Rental & Utility Assistance

As it stands currently, at least 90% of the housing CRF dollars must go for housing-related financial assistance to support households with income at or below 80% of Area Median Income (AMI). Priority is to be given to households at or below 50% AMI or experiencing unemployment. These dollars can be spent on both back-owed and forward-going rental and utility payments as well as other housing expenses. The term of assistance can last up to 12 months; in some cases, help may be extended up to 15 months. The goal of the assistance is to clear existing rental and utility arrears first before providing rental assistance to cover the months ahead (which can be done in 3-month chunks). Funding can also go to supportive services like case-management. Assistance can be administered to landlords or tenants through December 31, 2021. The rental and utility assistance package can be used to supplement existing efforts or to create new programs; and, if allocated accordingly, starts the process of closing the $70 billion national gap.

Moratorium Extension

The COVID-19 relief package extends the U.S. CDC-enacted federal eviction moratorium (for nonpayment of rent) through January 31, 2021. This action marks a Congressionally mandated, federal eviction moratorium. While the current extension is only for 30 days, it is anticipated that additional actions will occur after January 20, 2021. This has not paused actions in other jurisdictions, such as like New York State, which has extended its statewide ban on evictions until at least May 1 and halted proceedings for eviction cases already underway for 60 days. Other states enacting extensions include Connecticut (through February 9, 2021); and Washington (through March 31, 2021).

Low Income Housing Tax Credit (LIHTC)

To help secure financing for affordable housing projects and restart existing LIHTC projects, the COVID-19 relief bill sets a permanent floor for the 4% LIHTC credit. According to the National Low Income Housing Coalition, it is estimated that this measure could create as many as 126,000 rental homes over the next ten years.

SO, WHAT

Mecklenburg County was one of over 1,000 groups across the country that signed on to a national call to strengthen and extend the federal eviction moratorium. Even with additional time and resources, it is vital that communities maximize what has just been given through the new COVID-19 relief bill. To help communities do this, there is some guidance available.

The national Urban Institute recently released a brief with guiding principles for communities to consider when allocating the new federal housing assistance. These include targeting those renters who are most vulnerable to health and economic impacts from COVID-19; administering funding through existing channels wherever possible; setting money aside for smaller landlords; and ensuring long-term stability by coupling relief dollars with other supportive services.

In addition, the Aspen Institute just released a report that can help communities as they pivot from stopgap measures to supporting long-term recovery. The new document, “Strong Foundations: Housing Security Solutions Framework,” provides an analytical framework to achieve the goal of developing solutions that help people pay for safe, stable housing and reliably have enough remaining income to both build savings and cover necessary expenses. The framework is designed in such a way that any community can adapt it to a local context through the following key principles: addressing racial and ethnic inequality—and other forms of discrimination—in housing; promoting neighborhood integration; making it easier to build all types of housing; preserving the availability and physical quality of lower-cost, private market housing and subsidized affordable housing; supporting households directly to close the gap between their resources and the cost of securing and maintaining stable, adequate, and affordable housing; and supporting renter access to resources to resolve housing challenges. (Click here for Executive Summary.)

Resolve matters. But regardless of intentions, communities must figure out how to transform housing-related COVID-19 recovery efforts into permanent infrastructure for these efforts to be effective. Addressing the core problems that contribute to housing instability and homelessness, like the need for more housing of all types; closing the gaps between income and housing cost; fixing systems that drive inequities and discrimination; and enacting policies to support both renters and homeowners is comprehensive, but necessary if the promise of the new year is to be realized for every member of the community.