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North Dakota set to return nearly $150M in federal rental assistance money, while applications pile up

The state government is set to return $149 million of the $352 million it received from the federal government’s Emergency Rental Assistance program. State administrators say the federal government may have overestimated the state’s ability to spend that money within program deadlines.

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Terry Hanson, executive director of the Grand Forks Housing Authority, says that the state's rent help program has barriers for awarding rental assistance. Eric Hylden/Grand Forks Herald
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GRAND FORKS — North Dakota is set to return to the federal government nearly half of the money it received to help tenants who’ve fallen behind on their rent during the COVID-19 pandemic.

The state government is set to return $149 million of the $352 million it received from the federal government’s Emergency Rental Assistance program. State administrators say the federal government may have overestimated the state’s ability to spend that money within program deadlines.

“I think that makes sense for us,” said Jessica Thomasson, executive policy director for family stability and community inclusion, at the North Dakota Department of Human Services. “We are a state with a population that if you're going to spend those dollars effectively, according to program guidelines in the timeframe that's given, that's not realistic.”

But housing advocates say more work needs to be done to use the money before giving it back, and that assistance payouts have been slow after the state switched to a private vendor for its online application portal. Some people, advocates say, have wound up getting evicted after waiting to hear back about their application.

“That's a lot of assistance that can be given to families that need it,” said Jade Eagle, who processes assistance applications at Grand Forks-based High Plains Fair Housing. “I feel like it'd be an absolute shame.”

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North Dakota received that rental help money from two iterations of the Emergency Rental Assistance program, which is administered by the Department of the Treasury, and aims to help states manage a national affordable housing crisis that it says has been exacerbated by the pandemic.

The first iteration of the program, called “ERA 1,” brought $200 million to the state, and the funds need to be spent by September 2022. “ERA 2” was created by the American Rescue Plan Act, and brought in $152 million for housing assistance, and needs to be expended by September 2024. The funds to be returned to the Treasury Department will come from ERA 1.

At present, about $15 million has been given to landlords of tenants who have fallen behind in rental payments through the North Dakota Rent Help program , which pays overdue rent and utilities for tenants who have fallen behind, and offers up to a year's worth of assistance for households that meet the program’s income thresholds.

The program prioritizes people earning less than 50% of the area median income, and covers people who earn up to 80% of the AMI, which is about $80,000 per year for a family of four, depending on the county in which a household lives. Other program criteria include households at imminent risk of eviction and who are experiencing homlessness. The program can’t be used by homeowners.

For Thomasson, getting those funds to landlords and utility providers is an issue of scale. She said there are about 120,000 rental units in the state, with thousands of people able to meet the eligibility criteria. Raising awareness of the program and spending those funds is a huge task, one Thomasson says the state may not be able to support, due to the ratio of federal dollars to rental units.

Nearly 4,000 renter households have received about $15 million from the Rent Help program, and the state used about $3 million of its CARES Act money for another rental assistance program, called Rent Bridge, in 2020.

Too strict and too slow?

People who meet the eligibility criteria for the state's Rent Help program need to file an application online, or they can call the program’s staff. In July, the state also contracted with 17 housing agencies and nonprofit groups to help people complete the applications.

At least for ERA 1, applicants need to verify they have been impacted by the pandemic, and otherwise document their need by providing copies of a lease, among other documents. ERA 2 has no such requirement to document an adverse impact of the pandemic. Landlords also need to provide an account of how much a tenant has fallen behind.

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Terry Hanson, executive director of the Grand Forks Housing Authority, said the funds could more quickly be distributed if applicants were able to self-attest their need for assistance. The Housing Authority is one of the entities that can provide guidance on completing the assistance application.

North Dakota, like other states, does allow for self-attestation but only if efforts to document a tenant’s need fails. Hanson said he is fine with seeing pay stubs or a rental agreement — the funds don’t go to individuals, but to their landlords and the state needs to know who to pay — but documenting when a person’s hours dropped off, for example, draws the application period out.

“I believe the program as it is being operated today, has unnecessary barriers for awarding of the funds,” Hanson said.

Hanson also said allowing the application counselors to approve assistance applications themselves would speed up the process. All applications are being approved at the state level by a staff of about 17 people. Thomasson said efforts are being made to add more people who can approve them.

Another issue that has some application counselors concerned is the slow rollout of payments once a person’s application has been accepted. The Department of Human Services switched to a private vendor in mid-October for its online application portal. Some applications were lost in the switch, and the state has approved between 5%-10% of the applications it has received since November. About 1,200 applications are sent to the department each month, and a backlog has piled up.

And the wait time has led to some evictions.

Michelle Rydz, executive director at Grand Forks-based High Plains Fair Housing, and Jade Eagle, the nonprofit’s application counselor, said they have seen a few people get evicted for non-payment once their applications have been submitted.

“A lot of the folks put in the good faith effort to get all their documentation in, their landlords did their part, and while they're waiting, it just took too long,” said Rydz. “The landlords who needed to get their money ended up evicting folks.”

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Michelle Rydz is executive director of the High Plains Fair Housing Center. Adam Kurtz / Grand Forks Herald

Thomasson said staff try to get approvals done in four weeks, but acknowledged it has been taking longer. She said she realizes that longer wait times can cause anxiety for both renters and their landlords, and staff are working to push through the backlog.

Eagle said she wants landlords to understand that once an application has been accepted the overdue rent will be paid, it’s just a matter of time. Eagle, who has assisted in preparing more than 50 applications, said some landlords have been good about the wait times, but others have not. For those that waited the payout has covered all rent in arrears, sometimes totaling thousands of dollars.

“It took a while but they got their money back,” Eagle said.

For Eagle, one thing is clear, she doesn’t want to see the money returned to the Treasury Department before the deadline. She said she would like to see the Rent Help program modified to use more of the money in the state. Additionally, she said giving it back would defeat the efforts of the people working to get the funds where they are needed, including state workers who have been “working themselves ragged.”

“I believe that they should up the qualifications or they should extend the amount of assistance that families are able to get, because I know that other states have surpassed that 12-month mark,” Eagle said.

Information about the state Rent Help program can be found online at ndhousingstability.servicenowservices.com/nd_rent_help, or by calling 701-328-1907. The list of application counselors can also be found on the program’s website.

Related Topics: NORTH DAKOTA
Adam Kurtz is the community editor for the Grand Forks Herald. He covers higher education and other topics in Grand Forks County and the city.

Kurtz joined the Herald in July 2019. He covered business and county government topics before covering higher education and some military topics.

Tips and story ideas are welcome. Get in touch with him at akurtz@gfherald.com, or DM at @ByAdamKurtz.

Desk: 701-780-1110
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