West Michigan housing experts say a program recently rolled out by the Michigan State Housing Development Authority will help stabilize renters and landlords who have been struggling financially throughout the COVID-19 pandemic.
The $282 million COVID Emergency Rental Assistance (CERA) program is replacing the Eviction Diversion Program that MSHDA launched in July 2020, which helped about 16,000 Michigan households avoid eviction and catch up on rent payments. In addition to the CERA program, another $340 million in federal funds is waiting to be appropriated by the state Legislature, bringing the program to $622 million.
While housing experts say many people who lost jobs during the pandemic have started returning to work, many still need help with living expenses.
MSHDA estimates that 50,000 to 55,000 families will be able to receive financial assistance through CERA, with an anticipated average rental assistance payout that could be as much as $10,000. The previous program had an average payout of $3,300 per household.
“We’re seeing more people getting their income back to where it used to be before COVID-19, but they’re still behind because once you’re behind, it’s hard to get back,” said Jacob Beach, program director at Kalamazoo-based Housing Resources Inc. “We’re not seeing the need slow down.”
Housing Resources helped connect 700 households in Kalamazoo County with $2 million in rental assistance funding since the start of the pandemic through the state Eviction Diversion Program, Beach said. In Ottawa County, 485 tenants were able to access the eviction diversion funding. As of March 23, 260 people in Ottawa County were on the wait list or in the process of being connected to relief funding, said Jessi Christensen, eviction diversion lead at Good Samaritan Ministries.
Under CERA, 65 percent of the funds ($405 million) must be spent or obligated by Sept. 30. CERA funding comes from the federal COVID-19 aid package passed in December 2020. Of the $622 million allocated to Michigan as part of the package, $560 million will be used directly on rental and utility assistance, with the remaining $62 million set aside for case management, administrative and legal services.
According to Moody’s Analytics, $57 billion remains in unpaid rent across the U.S. Federal and state relief packages fall short of renters’ and landlords’ needs, said Duy Vu, president of the Property Management Association of Michigan.
‘We try to work with people’
The increasing number of tenants who were unable to pay rent this past year meant a tighter budget for Urban Pharm LLC, even though the Grand Rapids property management company is doing the same amount of work, said Urban Pharm co-owner and broker Bethany Reed.
“Our numbers have suffered pretty significantly and we tightened our belts a little and didn’t hire like we were planning,” Reed said. “I have been doing a lot of hand-holding with my tenants. If someone says they can’t pay their rent on time but they can pay it on this day, then that’s great. We try to work with people.”
The beginning of the pandemic was “scary for everyone,” with a large number of tenants falling behind on rent and not being able to access available funds. However, the number of people able to pay their rent has improved since then, Reed said.
“By August-September of 2020, we noticed a big uptick in people in the restaurant industry finding other jobs or most people were receiving assistance from the state or finding income in some way,” Reed said.
Though uncommon, some tenants have fallen behind on rent by nearly $10,000 with no recourse for landlords under the federal eviction moratorium, Reed said. The U.S. Centers for Disease Control and Prevention’s eviction moratorium went into effect on Sept. 4, 2020 and is set to end March 31, 2021. The Biden administration is reportedly considering extending the eviction ban through July as stimulus payments are delayed and amid lawsuits nationally from landlord groups challenging the ban as unconstitutional.
Urban Pharm has only pursued legal action against tenants in order to qualify them for state rental assistance, Reed said.
“It’s not our favorite, but that is the only way for us to do that currently, is through the court system,” Reed said.
Court documents and past-due rent notices are among documentation renters can use to apply to the CERA program.
PURE Real Estate Management had 10 to 15 tenants in its residential portfolio throughout West Michigan express concern about being able to pay rent when the pandemic first hit, said Jason Wheeler, communications director at PURE Real Estate Management.
“We were customizing plans with these people. For some of them, we were also providing resources and links to different financial opportunities or sitting down with them and making custom tailored approaches to each situation,” Wheeler said. “We were dealing with it on an individual, case-by-case basis.”