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Millions of Rental Relief Dollars in Jeopardy, Some Agencies Acting Too Slow To Pay Out

Hundreds of millions of dollars in federal rental assistance funds, earmarked for tenants and landlords struggling after the pandemic, still remain in some agencies’ hands, and now, federal officials warn the money could be taken back if they don’t see improvement.  A deadline next week by the U.S. Treasury Department could be the difference between a home and homelessness for some renters. The stakes could not be higher for tenants and landlords alike after most eviction moratoriums have been lifted across the country, and they are now eyeing pandemic aid as a last resort to make whole a debt of months of back rent.  Renters like Ndemsah Ndemsah out of Chicago’s Dunning neighborhood, a taxi driver who found himself out of work for most of last year. “Winter is coming,” Ndemsah said. “I’m very worried that I might be homeless.” Renter Ndemsah Ndemsah says he was out of work as a taxi cab driver in Chicago, IL, and now owes months of back rent. Ndemsah has been waiting for a slice of the Emergency Rental Assistance relief funds pledged by Congress as a solution after the COVID Relief Bill was passed in December 2020. But now, there’s a risk that the much-needed aid could be yanked back by federal officials from some area agencies if they don’t meet their end of the bargain by paying it out fast enough. Last month, Treasury Department officials warned local officials that it would begin to take back excess funds from areas slow to distribute the payments, and redirect those funds to “high performing” states. And with that warning came an order for all recipients of the first round of Emergency Rental Assistance (ERA1) funds to submit a progress report on how things are going, including their distribution rates and how many households they have assisted.  These numbers are staggeringly low.Karla Chrobak, Attorney for Housing Legal Aid Center CARPLS Treasury Department officials then released those figures publicly. Certain areas have made considerable progress in doling out the money in the last few months, but others, not so much. NBC 5 Responds found as of Sept. 30, some agencies doled out less than half of the aid distributed to them at the beginning of this year. See our findings in the table below or by clicking here. In its official guidance, the Treasury Department said agencies that have obligated and distributed less than 65% of their rental assistance must submit a “program improvement plan” to D.C. by November 15.  Agencies that have obligated or distributed less than 30% “could be subject to potential recapture” or have their funds reallocated to other areas in the country, according to the official guidance.  Some areas just passed the Treasury Department's 65% bar. The city of Chicago reported distributing 66% of its nearly $80 million in ERA funds; meaning it does not need to submit an improvement plan. Officials in Cook County, Illinois, told the Treasury Department it has distributed 99% of its $72.8 million, and the state of Illinois reported obligating 83% of its $566 million in rental assistance; a considerable jump from where the state was back in August. While some numbers look bleak for certain areas, those tasked with housing aid distribution insist the reporting isn’t a complete picture of the progress they’ve made, or the work they are doing.  One example of that is in McHenry County, Illinois.  Officials in McHenry County reported that they had obligated 30% of more than nine million dollars as of Sept. 30, 2021. Today, the county says it is now past 70% of its funds paid out. The work is vital for those tasked with handling the money, like Hans Mach. “This is a personal mission for me,” said Mach, the Community Development Director for McHenry County who responded to NBC 5’s inquiries on the numbers.  Mach explained his county asked for and received a reporting extension with the Treasury Department in order to get a more complete picture of the needs in their community; needs Mach said he sees every day. He can’t imagine the alternate possibility of what would have happened if McHenry hadn’t received these funds. “When the [eviction] moratorium ended, we would have started to have a huge inundation of court cases coming through,” Mach told NBC 5 Responds. “We want to ensure that individuals who are at risk of homelessness do not become homeless,” Mach said. “We don’t want those individuals to enter the system. We simply do not have the infrastructure for the number of individuals [in need].”  But housing advocates who reviewed the numbers with NBC 5 Responds were left feeling disappointed given the vast number of applications they’ve helped file for tenants and landlords, and the amount of time some agencies have had to pay out relief. Legal aid group CARPLS is based in Cook County, Illinois, and sees the delays in distributing funds causing ripple effects statewide, all the way to eviction court. “Right now, the delay in disbursement of the rental assistance funds is causing a real crisis in the courtroom,” said Karla Chrobak, a Supervising Attorney for CARPLS. “We’re seeing a lot more cases go to trial, we’re seeing entry of eviction orders where before we might have seen more room for settlements.”  Chrobak said some landlords are no longer willing or able to wait for the emergency funds, and she fears the fallout of taking too long to distribute relief could lead to real-life consequences. “Some of these numbers are staggeringly low,” Chrobak told NBC 5 Responds. “It’s really a cause for concern where we’re dealing with someone’s housing stability, in the case of a tenant, or a person’s livelihood, in the case of a landlord.” The process of reviewing an individual agency’s relief distribution, and any progress made since the Treasury Department’s last report, will likely take months. In the meantime, tenants and landlords in need of aid are urged to contact their state or county’s relief programs to start the process. To learn more about resources, click here. More From NBC 5 Responds: NBC 5 Responds Nov 9 Could It Happen To You? Thieves Target Joliet Man's Cryptocurrency Savings Through SIM Swap NBC 5 Responds Oct 13 NBC 5 Responds: ‘Ghosted' By A Third-Party Concert Ticket Seller This story uses functionality that may not work in our app. Click here to open the story in your web browser.

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