Unique approach to rent relief leaves tenants and landlords unassisted

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Homeowners who did not participate in the Philadelphia Pandemic Rental Assistance Program have been deterred by bureaucracy and uncertainty, concerns about how much money they could raise and strained relationships with tenants, according to a report published Monday by the Housing Initiative at Penn and the Philadelphia-based nonprofit Redevelopment Reinvestment Fund.

Almost a third of Philadelphia landlords whose tenants requested emergency rental assistance did not complete their portion of the request, which was required for the distribution of funds. But the report’s authors found that many landlords were trying to work with their tenants to avoid eviction, whether or not they accepted government help and were bound by a program’s tenant protections.

The report was based on a survey of more than 600 landlords whose tenants have applied for the first round of financing through the city’s Pandemic Rental Assistance Program and interviews with landlords, managers and owners’ lawyers. This is part of a larger Housing Initiative effort to understand the needs of landlords and understand why many landlords haven’t participated in emergency rental assistance programs in cities like Philadelphia, Baltimore, Atlanta. and Los Angeles. The goal is to create better emergency relief programs and longer-term programs and policies to help residents find housing.

Cities focused on the circumstances and needs of low-income households, but understanding the needs of landowners was “an obvious knowledge gap”, especially because many rent relief initiatives require landlords agree to participate, said Vincent Reina, assistant professor. at the University of Pennsylvania and one of the report researchers.

“We have always subscribed to property-based models for rental assistance programs without fully understanding how landlords engage in these programs and what the opportunities and challenges are,” he said.

Given the differences in the varying sizes of owners, Depending on location and circumstance, the report’s authors wrote, rent relief programs with a one-size-fits-all approach won’t help all tenants and landlords who need help.

And because some landlords, regardless of their size or situation, will not participate in government programs, rent assistance initiatives should also include an option for tenants to obtain funds directly. Last month, Philadelphia officials announced a direct payment phase of the city’s program. About 4,000 tenant households that applied for rental relief and were eligible, but whose landlords did not participate in the program, are eligible for $ 20 million in assistance.

The pandemic has widened the gap between what tenants can afford to pay and what they owe, said Sydney Goldstein, Housing Initiative data director at Penn. And since this gap will persist after the pandemic is over, “help will still be needed in the future,” she said.

The researchers stressed that rent relief programs are temporary solutions to entrenched problems and that in addition to emergency initiatives, cities should also provide longer-term support to tenants and landlords, who also face ongoing challenges.

“LEARN MORE: Pennsylvania misses deadline to spend $ 108 million on rent, CARES law mortgage relief

“It is important to develop a wide range of programs that both stabilize the housing supply and raise awareness among homeowners of all kinds,” the report’s authors wrote. “Such programs and efforts are essential for the long-term availability, sustainability and affordability of housing in Philadelphia. “

Landlords said low renters’ incomes and the inability to save money during a weather emergency is usually the most common reason for non-payment of rent, according to the report. Homeowners who were polled by the Reinvestment Fund said federal stimulus checks of $ 1,200 and increased unemployment benefits have helped people catch up on rent and tenants need more help. Congress has agreed on a pandemic contingency plan distribute more stimulus payments and extend unemployment benefits.

Landowners, especially those with a handful of rental units or fewer, face the same challenges during the pandemic as before – paying for repairs on rental properties, paying mortgages and property taxes, filling vacant positions – but worse. More than 28% of survey respondents said they were struggling to pay off their mortgages, up from around 9% before the pandemic. Almost a quarter are struggling with property taxes, up from around 14%. More than a third have difficulty paying for repairs, renovations, or both, compared to 23%.

“LEARN MORE: Small Philly Homeowners Can Apply For Loans To Make Up For Missed Rent During Pandemic

Their expenses continue while they receive less rent. Some homeowners surveyed said they asked their lenders if they could delay mortgage payments, but some banks no longer allow deferred payments.

Unsurprisingly, according to the survey, the pandemic is hurting small owners more than larger ones. Small landlords were also more likely than large ones to participate in rent relief programs, view eviction restrictions as a reasonable condition of the programs, write off some of the rent in arrears, and enter into repayment agreements. with tenants. More than two in five landlords who responded to the survey have five or fewer rental units, the definition of a small landlord report. Homeowners of this size are also less likely to be aware of assistance programs. The city relies on small landlords to provide housing that residents can afford.

Smaller landlords are also less likely than larger ones to feel pressured by formal eviction policies.

From survey responses and interviews, researchers found that landlords who understand or have similar experiences to their tenants are more willing to work with those tenants.

“This familiarity seems to translate into a more empathetic response as everyone tries to navigate their way through this really complicated time,” said Ira Goldstein, president of policy solutions for the Reinvestment Fund.

Despite varying participation in government rental assistance programs, landlords say what they need most is rental assistance that can help them pay their mortgages and expenses. The most recent federal economic assistance bill includes billions of dollars in rent assistance.

More than 10,000 Philadelphians receive rental assistance through a municipal program distributing $ 40 million in mostly federal funds.

“LEARN MORE: Philadelphia sees great need for rental assistance during pandemic

David Brogan, executive director of the New Jersey Apartment Association, said rent assistance must be a priority and that “the federal government has failed miserably” to help landlords and tenants.

Moratoriums on evictions add to homeowners’ problems, said Marlynn Orlando, executive director of the Pennsylvania Apartment Association.

“It only creates long-term problems that the industry and residents will have a hard time getting out of,” she said. “Although we understand the underlying intention, if you have residents who cannot pay their rent and continue to live in an apartment where they cannot pay their rent and there is no rent aid for them, all they do is accumulate debt that they can never get rid of.

“LEARN MORE: Pa’s vital rental assistance program riddled with problems

Homeowners interviewed said that before the moratoriums on evictions, they generally tried to make repayment agreements to avoid spending money and time on the eviction process in court. But a few landlords said the threat of eviction motivated tenants to pay what they could. The study found that the city’s moratoriums on evictions have soured relations between some landlords and their tenants.

“One of the questions that has been raised is what is the impact on homeowners if they can’t evict? said Emily Dowdall, policy director at the Reinvestment Fund. “There is an obvious public health and social safety net reason for wanting people to stay in their homes. But at the same time, there is the question of whether homeowners should act as a social safety net. “

The Philadelphia Inquirer is one of more than 20 news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city’s push for economic justice. Find all our reports on breakinphilly.org.

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