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Report: Utah disbursed 39% of federal rental assistance by fall deadline

State will continue paying landlords for application assistance and will stop paying advocacy groups to process applications.

(Trent Nelson | The Salt Lake Tribune) People protest the possible eviction of renters in August 2020. Just one fifth of the $150 million in federal emergency rental assistance Utah received was placed into the hands of needy renters

The following story was supported by funding from The Economic Hardship Reporting Project and was reported by The Utah Investigative Journalism Project in partnership with The Salt Lake Tribune.

Utah had some explaining to do about why it put just one fifth of the $150 million in federal emergency rental assistance it received into the hands of needy renters by a fall deadline set by the U.S. Department of the Treasury.

On Nov. 15 the state was forced to send a “Program Improvement Plan” to the Treasury to show how it intends to do a better job disbursing aid. If it’s not happy with Utah’s plan, the Treasury could potentially hand the tens of millions that the state didn’t spend to another agency.

The Utah Department of Workforce Services, or DWS, which administers the program for the state, declined to release a copy of its plan to The Utah Investigative Journalism Project.

DWS has already announced one change. Next year the state will stop contracting with renter advocates, such as Salt Lake Community Action to process rental assistance applications.

“We just want to streamline it, that’s really the only intent,” said Nate McDonald, DWS deputy director. While the state initially contracted with multiple groups to help renters collect and verify their documents for eligibility, the agency intends on bringing those tasks in-house in 2022.

Tim Funk, an affordable housing advocate with the Crossroads Urban Center, is skeptical of the state’s decision, even given shortcomings by some advocacy groups processing applications in a timely manner. He wonders what better ideas state bureaucrats will have compared to those working directly with low-income Utahns.

“What makes the state think that they have any more inspiration than the [advocates] who are on the street helping these people?” Funk asks.

‘Getting it right’

Like other recipients of the $46 billion in Emergency Rental Assistance authorized by Congress in late 2020, Utah was required to have spent or allocated at least 65% of those funds toward rent relief by Sept. 30. DWS had disbursed just 22% of the $150 million it received by the deadline, according to a Treasury report.

Salt Lake City and Salt Lake, Davis and Utah counties also received their own funds to help renters. Salt Lake City and Salt Lake County managed to get 100% of their assistance to renters, while Davis County provided 59%. Utah County hit just 22%. Counting the state and local governments, Utah overall has distributed just 39% of its $215 million total funds to renters.

When DWS received the funds it initially contracted out with a variety of groups across the state to process applications, like the Uintah Basin Association of Governments and Salt Lake Community Action.

In total these nine organizations were given $5.3 million from the state’s bucket of emergency rental assistance funds to process applications and McDonald said the results have been mixed.

“You have nine groups interpreting the rules and doing procedures differently,” McDonald said. “Some are doing it really well and some, there’s a lag time.”

DWS will have to hire additional staff to handle the extra work, but it already has a division ready to process renter applications.

“We have a team right now that does it already for all the landlord applications,” he said.

DWS has used some of its funds to provide $150 per rental assistance application that landlords submit on behalf of their tenants to compensate for the extra work. This work is different from the processing the community action groups have been doing, as the landlords are being compensated just for helping renters submit applications with the appropriate paperwork, but not vetting and verifying the information.

As of Nov. 28, DWS reported paying for 7,140 landlord-submitted applications and 13,276 renter-submitted applications — largely with assistance from community groups.

Funk, whose nonprofit does not compete for state grants for emergency rental assistance, is critical of some advocacy groups’ inability to quickly process applications and believes a change may be warranted. But he’s astounded that the state wants to take over the disbursement role entirely.

“I do know with the nonprofits, their people will stay late after work until they get that help for a person who needs their rental assistance,” Funk said.

(Francisco Kjolseth | The Salt Lake Tribune) Tim Funk in 2016.

Funk worries the state favors landlords, citing how DWS has used nearly $200,000 in special federal rent assistance funds to pay the lawyers of landlords to cover eviction fees.

McDonald defends that spending, arguing that focusing on landlords is a necessity when it comes to doling out the assistance funds.

“It’s as much about keeping people in their homes as it is keeping this industry thriving, so we have homes for people,” McDonald said.

‘An Ugly Path’

Even before the federal assistance money landed in the state’s coffers there was an immediate challenge by the rental industry over funds going to nonprofits that help renters.

On Jan. 25, 2021, the head of the state’s powerful landlord lobby group The Utah Apartment Association, sent a defiant email to Jonathan Hardy, then DWS’s director for housing and community development.

“In my opinion we are going down an ugly path,” Paul Smith, head of the Utah Apartment Association, wrote in the email, which was also sent to a number of stakeholders in the public and private sector, including powerful Republican state Sen. Kirk Cullimore Jr., and his father, both principals in the state’s leading eviction law firm.

“The last thing we want to see is the state disproportionately funding renter advocacy programs,” Smith warned, complaining that too much money was going to nonprofits that assist renters in applying for funds instead of to landlords.

“If landlords can’t charge any administrative fee, we object to [Utah Community Action] getting one,” Smith said, referring to funds to help renters access rental assistance. He added that he had reached out to the governor’s office about using a “Silicon Slopes third party like Test Utah” to take over the release of funds away from the state.

Test Utah’s no-bid COVID-19 testing contract with a politically connected group that had no experience in the public health field has cost millions and drawn intense criticism.

“I would encourage you to refrain from entering into any new contracts with [Community Action] until the governor has a chance to consider how much more efficient outsourcing this entire program to the private sector can be,” Smith wrote.

Hardy replied that his hands were tied by federal guidelines attached to the funds. Shortly after the exchange, Hardy stepped down as the housing director when Gov. Spencer Cox took office.

Since Smith’s email, DWS did approve the administrative fee for landlords. These payments, as previously reported, have sometimes gone to the Cullimore law firm even in cases where the lawyers applied for assistance and still subsequently evicted renters.

Under DWS’ new plan beginning next year, the state will stop funding renter advocacy groups but will continue paying landlords $150 for each application they assist with.

‘They don’t want to just go to a website’

McDonald stressed that renter advocacy groups will still have the ability to help renters by working with other local government agencies — like Salt Lake City and county — that received emergency rental assistance funds.

Still, Deneen Adams with the Davis County-based advocacy group Open Doors, worries that the change will impair her organization’s work. Processing rental assistance applications helped bring vulnerable Utahns through the nonprofit’s doors and provided the opportunity to offer them other vital services, such as access to its food bank and crisis nursery or tax preparation and financial literacy classes.

“They don’t want to just go to a website,” Adams said. “They want to go and talk to somebody about what’s happened to them.”

While DWS had previously devoted all its “Housing Stability Funds” — some $183,000 — to pay the legal fees of landlords filing evictions, according to McDonald, the agency now will pursue other Treasury-recommended uses, including housing counseling.

The improvement plan recently submitted by DWS to the Treasury, however, did not expand funding for the housing stability program beyond covering landlords’ legal bills, according to DWS spokesperson Christina Davis. DWS is still considering different uses for those funds, Davis said, “with various partners including agencies that we have been working with in 2021 on the processing of ERA applications.”

The Treasury’s “Program Improvement Plan” form identifies high-priority recommendations for housing stability service funds, including contracting with community organizations and nonprofits, serving “populations with limited English proficiency” and “legal assistance to tenants at risk of eviction.”

Those areas were included in Salt Lake County’s spending of housing stability funds, in contrast to the state. These efforts also were among the factors in the county’s success in distributing 100% of its emergency rental assistance funding by the Sept. 30 deadline.

The county is looking into the possibility that it might be able to access some of the state’s unspent rental assistance funding, according to Lauren Littlefield, the housing stability and recovery manager for the county. While she acknowledged the county’s approach has been different from the state’s — such as spending its housing stability money on paying the legal fees of renters fighting evictions rather than landlords’ attorneys — Littlefield offers no criticism of DWS. Instead, she praised the state for spending more than $500,000 to advertise the rental assistance program.

The county also put much of its $1.2 million in housing stability funding into contracting with 23 renter advocacy groups to help get its diverse residents signed up for assistance.

“We really wanted to make sure that assistance was getting to vulnerable communities so it made the most sense to work with organizations that had existing relationships with those communities,” Littlefield said.

If you are experiencing eviction please consider visiting evictedinutah.com, this site can explain your rights and refer you to local legal and advocacy groups that can help your situation and help you find further resources.

The Utah Investigative Journalism Project is a nonprofit that partners with newspapers and broadcast media on in-depth stories to help bolster these institutions’ historic role as watchdogs of government and defenders of the poor and oppressed. Consider a donation.

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