News: CJ News Service

Legislators raise questions about speed, accuracy of HOPE Program

rental housing file image from rebuild.nc.gov
rental housing file image from rebuild.nc.gov

Lawmakers are asking big questions about the state program that puts federal dollars into the hands of renters facing eviction during the pandemic.  At the Government Operations hearing on Wednesday, Nov. 17, members dug into the practices and policies of the Housing Opportunities and Prevention of Evictions Program, or HOPE. They sought answers on how legislation could open the program to landlords’ applications, and expand what is covered, like late fees and utilities.

The HOPE Program is administered by the N.C. Office of Recovery and Resiliency, which was created by the General Assembly to provide rent and utility assistance to low-income renters who are experiencing financial hardship due to pandemic policies, protecting them against utility disconnections and evictions.

Federal law allows the funding to cover late fees, allows a landlord to apply on behalf of a tenant, provided they have a tenant’s signature, allows for a utility-only application, and allows paying for hotel costs due to a family being unable to pay rent during the pandemic. Corey Curry, governmental operations evaluator, said NCORR doesn’t allow HOPE program funds to cover any of those instances.

Legislators compared the program to other agencies running similar programs, such as Dream Key Partners of Charlotte-Mecklenburg, and the Lumbee Tribe, whom they say were doing a better job at helping North Carolinians needing rental and/or utility assistance, and covers those types of expenses.

Curry said the HOPE program received $546 million from Emergency Rental Assistance, or ERA 1, and $556 million from ERA 2, funded solely by the U.S. Department of Treasury’s Emergency Rental Assistance Program.

The HOPE program awarded 72% of ERA 1 funding by Sept. 30, which means the state’s funding was not up for reallocation by the U.S. Treasury.

Currently, HOPE ranks 6th in the nation for spending of federal ERA funding and 3rd in the nation for households assisted. Although the program is open until 2024, funding looks to be exhausted in North Carolina by April 2022.

She said they were able to determine that on average, HOPE paid out $2.9 million in awards to approximately 1,100 households daily. As of Nov. 10, HOPE had allocated $450 million in awards, assisted 173,000 households, and paid out $374 million in awards to 148,000 households

Laura Hogshead, director of NCORR, would later testify that $594 million has been awarded, $518 million went to landlords and utilities, or 85% of all awards.  She also said that HOPE 1.0 got $133 million, and $768 million went to HOPE 2.0.  Carolina Journal reached out to Hogshead’s office for further clarification of the amounts.

HOPE did increase accessibility for landlords by implementing the Landlord Referral Program, but data wasn’t provided to Gov Ops to see how many referrals were turned into applications.

As a result of a meeting earlier this month and lawmaker concerns, Curry said NCORR is developing a utility-only application.

Curry said that under federal law, households can receive up to 15 months of assistance and can include up to 12 months of arrears.  From May 17 to Oct. 1, the HOPE Program covered only 12 months of assistance and nine months of arrears.  The subcommittee is concerned that renters are being left in debt to their landlords and increasing their chances of eviction.

About 10% of 90,000 applicants requested more months of arrears than allowed by NCORR.  After hearing concerns from legislators, NCORR increased the amount of arrears to 15 months on Oct. 1.  Under the American Rescue Plan, once ERA 2 funds are used, assistance can be increased up to 18 months, and the Gov Ops staff recommended HOPE do the same.

Upon the opening of HOPE 2.0, the HOPE program imposed a cap on the amount of monthly rent that a tenant could receive.  The program also imposed a cap on payments an applicant could receive for back-owed utilities. About 19% of applicants were being paid for the full amount of rent that was owed.

During Wednesday’s hearing, NCORR only provided partial answers to some of the questions lawmakers asked about applications, with Curry explaining that Gov Ops staff hasn’t had sufficient time to determine the efficiency and effectiveness of the program or average application time.

Recommendations to help HOPE work

Curry outlined recommendations that the Gov Ops staff deemed crucial for the HOPE program to work under federal guidelines, including that NCORR pay full rent and utility bills rather than putting a cap on payments, plus;

  • allow landlords to apply for rental assistance on behalf of a tenant
  • cover hotel costs for temporarily displaced families
  • cover maximum months of assistance as allowed by federal statute
  • implement utility-only applications
  • cover late fees owed to a landlord via formal lease agreement
  • pay full rent and utilities owed by eligible households

Curry assured subcommittee Co-Chair Sen. Chuck Edwards, R-Henderson, who asked Curry whether House Bill 110 would address the recommendations of her staff, other than the extension of arrears from 15 to 18 months.

“It appears that [the 12 local agencies also running the program] are doing a much better job in serving the citizens of North Carolina than NCORR.  They are providing the applications for utility-only, full rent and fees, hotel costs. It appears that NCORR is being overly burdensome and adding additional barriers beyond federal guidance. Is there any indication as to why they are doing this?” Sen. Todd Johnson, R-Union asked Curry.

Curry answered that NCORR had concerns about how changing their software midstream may hold up applications and slow down the process.  Initial conversations also suggested that the agency worried about having enough funding for the program, so they added additional barriers, only to relax some of the requirements after discussions with Gov Ops and further information from Edwards.

Also testifying at the hearing was The United Way of North Carolina.   State director Heather Black said their agency took thousands of calls related to rent and utility assistance when they were contracted to work as part of HOPE 1.0.

Property owners hit hard

Amy Hedgecock of the N.C. Realtors Association spoke on behalf of rental members (56,000 across the state) or small “mom-and-pop” landlords that own three to five properties on average.  She said they faced a huge hit and had to dip into their own savings to make up for lost income. She also said about 10% of their clients have actually had to sell their properties as a result of the loss of income from renters not paying rent due to the pandemic.

According to Hogshead, about 3,389 rental assistance payments or about 50% have been processed from 6,846 landlord referrals. She told Edwards that while they would make efforts to incorporate some of the changes from H.B. 110, she worries that they will slow the process down. Currently, it takes between 14 and 21 days to receive a check after the application is processed.

Edwards said he still intends to pursue the elements in H.B. 110 now that they have working examples of other entities that are able to implement the program more efficiently.

Subcommittee meetings will continue on the topic at the beginning of December.