Idaho is likely to lose tens of millions in federal emergency rental assistance because it has spent so little of the money it’s received from the federal government for that so far – just $14.3 million of the nearly $175.7 million allocated to the state this year.
“Programs that spend less than 30% of their allocation will have funds recaptured,” Brady Ellis, vice president of the Idaho Housing & Finance Association, which is overseeing the assistance program for the state, told lawmakers Tuesday. With only about 8% of the state allocation spent through Sept. 30, “We will have some of the allocated funds recaptured,” he said.
Members of the Legislature’s Joint Finance-Appropriations Committee were taken aback by the news.
“I’m watching some painful things happen in my area,” said Rep. Wendy Horman, R-Idaho Falls, “with widows being evicted from rentals because the rent goes up so dramatically and they aren’t able to afford it, then end up living in a car or a homeless shelter.”
Idaho is suffering from a major shortage of affordable housing statewide, at a time when both rents and home prices are soaring; there are issues in the state’s biggest cities and its smaller towns and rural areas, in every region of the state.
Meanwhile, separate allocations from the same federal emergency rental assistance program that went directly to the city of Boise and Ada County have been much more heavily used. Deanna Watson, executive director of the Boise City-Ada County Housing Authority, which is coordinating both of those programs, said 95% of the city’s $11.5 million allocation has been spent and it’s all expected to be spent by the end of this month, and 44% of Ada County’s $12.7 million allocation has been paid out.
As a result, while the state loses much of its existing allocation to be recaptured and redistributed elsewhere, Boise likely will qualify to get additional funds that are being redistributed – maybe even part of the state’s unused pot.
“The lack of spending is not reflective of a lack of need,” Watson said.
Rep. Colin Nash, D-Boise, asked how emergency rental assistance could be going unallocated when so many people are being evicted.
Said Rep. Brooke Green, D-Boise, “It’s concerning. … We know it’s out there, we know people are in deep need of help.”
Horman asked Ellis how IHFA has been getting the word out about the assistance. He responded that the agency has done more marketing on this program than any it’s ever handled, with everything from TV and radio ads to mailers, social media posts, Spanish-language materials, online outreach and contacts with specific interest and advocacy groups. “We’ve done everything and anything we can think of to try and perform that outreach,” he said.
Horman suggested adding contacts with churches to the list. “Churches are often some of the first to be aware that their members are having housing problems,” she said.
Ellis told JFAC, “We’ve experienced a good amount of successes throughout our time administering the program. We have much shorter wait times than a lot of the other states that we keep in touch with.” IHFA has set up online applications and increased its staffing to focus on the program.
Ellis noted that between the $14.3 million it’s handed out, the Boise city and Ada County programs, and an earlier emergency rental assistance program IHFA administered for the state with CARES Act funds, a total of $42 million in emergency rental assistance has gone out to aid Idaho renters since last year.
The U.S. Treasury will recapture funds in four pieces, depending on spending rates, at two-month intervals between now and the end of March, Ellis reported. At the end of March, “Treasury guidance indicates they may recapture the remainder of all funds.”
However, there’s a new program that will kick in under the American Rescue Plan Act, through which Idaho already has been allocated $133.6 million. That program, which is being called ERAP2, or Emergency Rental Assistance Program 2, will have some significantly eased eligibility standards, which may make it easier for Idaho to get the aid out the door to needy recipients.
The Legislature hasn’t yet taken any action on the ERAP2 funds, but Gov. Brad Little has requested the full amount be allocated when they convene in January. If lawmakers approve it then, the money could be spent immediately, said Alex Adams, Little’s budget director.
Ellis said he’s hoping the ERAP2 funds could be approved and made available before the end of March, so the state program wouldn’t see any interruption and could continue providing rental assistance to Idahoans across the state. The money can be for rent or utilities; thus far, 95% has gone for rent.
Among the changes between the current program and ERAP2: Renters could get assistance for up to 18 months, up from 15 under the current program; and it would be authorized for “those that need it during COVID, as opposed to those that need it due to COVID,” Ellis said. “This is, I think, particularly important, just given the housing challenges that we see on a daily basis. Rent increases very regularly, and the market for rent is going up and up and up. And at the same time, we have an extremely low vacancy rate, and it’s very difficult to find affordable housing.”
The second round of funding may also allow some of the money to be used for “other affordable housing activities outside of the emergency rental assistance,” Ellis said. “We don’t have any additional detail to that … at this point in time, but that’s something they indicate as a possibility.”
He estimated that Idaho’s need for assistance under ERAP 2 across the state excluding Ada County, which will again get its own direct allocation, is roughly $96 million.
Sen. Steve Bair, R-Blackfoot, co-chair of JFAC, said, “I think we’re taking the federal guidelines and we’re getting as much out the door as we can with these federal guidelines. If they lower the bar, maybe we can do more.”
Rep. Rick Youngblood, R-Nampa, the other co-chair of the key joint committee that’s responsible for writing the state budget, agreed. “Certainly affordable housing is a huge challenge,” Youngblood said, “and that’s one we need to stay on top of. And I know we will. There’s lots of discussion.”
Another pending budget request that the governor has included in budget proposals for next year, as the Idaho Pressreported on Tuesday, calls for tapping funds from the American Rescue Plan Act to fund Idaho’s Housing Trust Fund, which was created by lawmakers in 1992 to address affordable housing in the state, but never was funded.
Seth Grigg, executive director of the Idaho Association of Counties, said local officials across the state, from both parties and both urban and rural areas, want to see the Housing Trust get up and operating.
“We’re happy to hear that the governor’s office is interested in trying to find a path forward,” he said Tuesday. “It’s not just local officials – the governor gets it.”
Under U.S. Treasury guidance, any jurisdiction participating in the current emergency rental assistance program that has spent at least 50% of its allocation will be eligible to get some of the reallocated funds that are shifted from other jurisdictions that haven’t spent as much of their shares.
Outgoing Legislative Budget Director Paul Headlee, who has been promoted to deputy director of the Legislative Services Office but still staffed the JFAC meeting on Tuesday to help out new legislative budget Director Keith Bybee, who’s been swamped with his work with the state’s redistricting commission, said the eligibility rule changes could really help Idaho get the aid out to those who need it.
Adams agreed, saying the state will have “more flexibility” with the second round of emergency rental assistance funding. Getting it approved quickly, he said, “would be a goal of ours next session.”
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