When Memphis and Shelby County stopped accepting applications for their Emergency Rental Assistance program at August’s end, there was a silver lining for local renters. The State of Tennessee was administering a rent and utility assistance program backed by the same federal funds, and it still had hundreds of millions of dollars that didn’t expire until 2025.
It wasn’t a perfect substitute since the state program has been slower at distributing funds, but it was an option for renters who could afford to wait.
Last week, though, the Tennessee Housing Development Agency, which administers the state effort, surprised city officials. Despite recent promises and plenty of cash, it announced on its website it was closing the program, which has helped more than 35,000 low-income Tennesseans at risk of losing their home, heat or air conditioning.
THDA spokeswoman Rebecca Anderson declined to provide the agency’s reasoning but sent a statement to MLK50: Justice Through Journalism:
“COVID Emergency Rental Assistance has about run its course. Thus, THDA will close the COVID-19 Rent Relief portalto new applications on January 6. … All applications (complete and submitted) in the system will be processed andthose receiving payments will continue to receive them for the period they remain eligible and are approved.”
That decision is “very frustrating,” said Mary Hamlett, who leads the Metropolitan Inter-Faith Association’s work with families who have lost housing. The timing is particularly poor, she said, since the end will come when utility bills are high and after Christmas gifts have affected savings accounts.
“January is one of the worst months you can consider not having enough safety net programs,” Hamlett said. “It’s a perfect storm to have more people experience homelessness.”
Hamlett said her team began referring families to THDA in October and said MLK50 was the first to inform her of the state agency’s decision.
Ashley Cash, director of the City of Memphis’ Division of Housing and Community Development, said she didn’t hear the news from THDA until a day after MLK50 emailed her questions for this article and that the agency hasn’t explained its decision to her.
“We anticipated they would be able to serve Memphis (and) Shelby County through their available funding,” she said.
THDA promised Memphis focus
In October, MLK50 revealed that Cash and other local officials had quietly decided not to apply for millions of dollars of additional rental assistance the federal government released this fall. Unlike the THDA, the city and county had already spent most of the money they had been sent, but the decision not to ask for more appeared to place local residents at a higher risk of eviction.
“My first reaction is one of shock. I didn’t think that would really be a possibility, that the state would look to end it.”
Memphis City Council member Martavius Jones
In response to MLK50’s reporting, Memphis City Council member Chase Carlisle asked Cash to explain her decision to a council committee. Cash told the committee Nov. 1 that the city and county would apply for the next round of federal funds and hoped to bring back the local program in spring 2023. She downplayed the program’s pause, in part because city residents could still apply for the THDA funds.
After the meeting, Memphis Mayor Jim Strickland said that because of THDA, he didn’t think the interruption of the city-county program would lead to a drop in service to Memphians.
Speaking to a different Council committee that same day, THDA director Ralph Perrey provided similar assurances. Council member Martavius Jones told Perrey he was worried that Memphians’ needs would be lost in the mix of the state program. In response, Perrey promised that his agency would pay special attention to Memphians in need “for the time remaining in that program.”
Jones told MLK50 on Nov. 18 that he assumed Perrey meant this attention would last until the THDA’s funds expire in 2025.
“My first reaction is one of shock,” Jones said when MLK50 informed him of the state’s decision. “I didn’t think that would really be a possibility, that the state would look to end it.”
When asked if the state decision will change when the city and county restart their program, Cash’s emailed response was noncommittal.
“The COVID-19 rent and utility assistance program has always been known to be a temporary program to assist households … (facing) hardships created or exacerbated by the pandemic,” she said. “The City has requested additional funding from (the federal government) to address rent and utility instability and aim to do so in the future if we receive additional funding.”
Hundreds of millions
The federal funding behind both the THDA program and the city-county program comes in two types: ERA 1 and ERA 2. All ERA 1 funds have to be spent by Dec. 29, but ERA 2 funds don’t expire until September 2025.
The THDA received about $313 million of ERA 2 and had only spent $23 million by the end of June, according to the most recent data from the U.S. Department of Treasury, which administers the funding.
When state governments don’t use funds, they can give them to local governments in their state. Otherwise, the Treasury Department will reallocate them elsewhere in the country.
Anderson said the state plans to use some of its remaining ERA cash to “support eviction prevention efforts across the state.” Memphis and Shelby County could receive much of it, seeing as the THDA sent them more than $72 million of its $383 million of ERA 1 cash.
She also said it would “repurpose” some to support the development of affordable housing. The federal statute governing the funds only allows state governments to use 15% of them in that way unless they have already allocated 75% of the money. And, that is the same 15% the state has to pull from for administrative expenses.
Anderson did not answer questions about how much of the $313 million THDA has remaining, how much it hoped to repurpose and how much it would return to Treasury.
Jones said it’s “ridiculous” that the state may return tens of millions of dollars to the federal government, given the rising rental rates and acute housing needs across the state.
“That’s why we always want to focus on local control,” he said. “When we leave things in the state’s hands, we have no control over … when things are concluded.”
