Title
Recommendation to Accept Proposed Changes to the Emergency Rent Relief Guidelines and Authorize the City Manager to Approve Future Changes to the Guidelines. (Community Development)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
In May and June 2020, City Council allocated funds for emergency rent relief to mitigate potential homelessness and displacement of Alameda tenants who experience a decrease in household income due to the COVID-19 pandemic. The Program had three priorities: 1) preserve housing stability; 2) prioritize those with most need; and 3) maximize the number of households assisted. Based on a review of the first 120 applications, staff has identified three recommended changes to the guidelines: 1) after all applications have been reviewed, authorize staff to evaluate increasing the maximum amount of assistance per household (on a pro rata basis) to address the unmet need of the existing applicants; 2) broaden the allowable COVID-19 impact to allow for a loss of income or a documented increase in expenses; and 3) delegate authority to the City Manager to make adjustments to the guidelines such that they will not be stricter than HUD’s guidelines and/or to ensure flexibility and timeliness in meeting the needs of the City of Alameda’s (City) low-income tenants who are at risk of becoming homeless due to inability to pay rent. The proposed changes to the guidelines are attached as Exhibit 1. Exhibit 2 is the proposed final guidelines.
BACKGROUND
In May and June 2020, City Council allocated funds for emergency rent relief to mitigate potential homelessness and displacement of Alameda tenants who experience a decrease in household income due to the COVID-19 pandemic. In May 2020, City Council approved establishing the Alameda Strong Community Relief Fund, a portion of whose proceeds are designated to assists tenants. On June 2, 2020, the City Council allocated $583,116 of Community Development Block Grant (CDBG) Coronavirus Aid, Relief, and Economic Security (CARES) Act funds to establish a COVID-19 Emergency Rent Relief Program. On June 16, 2020, the City Council allocated an additional $130,000 of CDBG Entitlement funds, for a total funding commitment of $713,116, plus any funds raised by Alameda Strong. The Alameda Strong community relief effort is currently soliciting funds for rent relief grants and will provide a secondary source of assistance.
DISCUSSION
On July 28, 2020, the City launched the Emergency Rent Relief Program with pre-applications due by August 10, 2020. On August 27, 2020, the pre-application process was opened again and closed on September 10, 2020. In total, 313 pre-applications have been submitted. The City has contracted with Building Futures with Women and Children (BFWC) to administer the Emergency Rent Relief program. BFWC reviews the pre-applications in lottery order and requests additional information as needed. BFWC evaluates the applications using the Program Guidelines approved by City Council in June 2020. Very low- and low-income households are funded with CDBG CARES funds. Households that do not qualify for CDBG funds will be funded by Alameda Strong. Based on the initial review of the applications, staff anticipates that most households will meet CDBG guidelines.
At the time of the initial pre-applications, there was significant uncertainty about the amount of unemployment benefits that would made available after the expiration of the $600 per week federal unemployment benefit as well as on-going concern about the economic recovery. As BFWC has begun processing the pre-applications and inviting households to submit a full application, BFWC found that only about 30% of households who entered the lottery are proceeding to the next step. In the process of reviewing the first 120 applications, staff has identified three recommended changes to the guidelines:
1. After all applications have been reviewed, authorize staff to evaluate increasing the maximum amount of assistance per household (on a pro rata basis) to address the unmet need of the existing applicants.
2. Broaden the allowable COVID-19 impact to allow for a loss of income or a documented increase in expenses.
3. Authorize the City Manager to make adjustments to the guidelines such that they will not be stricter than HUD’s guidelines and/or to provide flexibility and timely modifications.
Evaluate Increasing the Maximum Amount of Assistance per Household
The Rent Relief Program has three priorities:
• Preserve housing stability
• Prioritize those most at need
• Maximize the number of households helped
The second and third goals anticipated receiving more applications for assistance than available funding (approximately $650,000). Fortunately, expanded federal, and then state, unemployment benefits have enabled some households to stay afloat. At the same time, low-income households with limited reserves have demonstrated that their need is great, often exceeding the current program limit of $3,500 or one month’s rent, whichever is less. Under the current guidelines, if a household pays $1500 a month in rent and has an outstanding balance of $4500 (three months’ rent), the Program would only pay $1500 to the landlord. Based on current projections, including the needs of those applicants whose applications have not yet been processed, staff estimates the current total need to be approximately $400,000, which is less than the $650,000 that has been allocated for funding. Furthermore, due to the existing limit (the lesser of $3,500 or one month’s rent), the estimated expenditures will total approximately $250,000. Consequently, staff recommends that all applications be processed to provide the lesser of $3500 or the actual need as confirmed by the landlord/property manager.
In addition, staff recommends that if funds remain after all applications have been processed, up to $500,000 of Program funds may be issued on a pro rata basis to applicants whose need exceeded the newly proposed $3500 cap. The Program Administrator shall obtain a self-certification form from the tenant and confirmation from the landlord of an unmet need.
Additionally, recognizing that the first application period assisted tenants who fell behind on rent that was due from April through September 2020, and that the need for rent relief continues to grow, staff proposes a second application period to assist those who more recently experienced hardship, as well as those with continued hardship.
Lastly, in the event that an applicant is awarded funds in more than one round, under no circumstances shall an applicant receive more than six months’ rent per HUD regulations.
Broaden the allowable COVID-19 Impact
Recognizing the City’s priority for preserving housing stability, staff has accepted applications from households who experienced a loss of income that was less than 20%, but still significant enough to impact the household’s finances and ability to pay rent.
While unemployment has helped some households recapture as much as 90% of their income, there is still a need for rent relief, especially for those who were rent-burdened before the pandemic. Similarly, for single-income households where the wage earner was able to retain the wage earner’s job, even though the wage earner did not experience a loss of income, child care expenses due to school closures in March to May significantly increased and impacted households.
Staff has proposed changes to the guidelines to address these issues.
Authorize the City Manager to make future adjustments to the Guidelines
Following the review of the applications, staff understands more about the impact of the pandemic on Alameda renters. This is also happening nationwide. For example, at the time the Program Guidelines were developed, HUD had capped the maximum benefit at no more than three months. HUD has since revised its guidelines to allow up to six months’ of rental assistance. Consequently, staff is proposing that City Council authorize the City Manager to approve changes to the guidelines provided that they continue to meet the City’s priorities and are no more restrictive than HUD’s or those of any new funding sources.
Plan for a second application period
On September 15, 2020, HUD allocated $597,112 to the City from the third round of CDBG CARES Act funds. Staff will return to Council at a later date with a recommendation for the proposed use of these funds.
ALTERNATIVES
• Accept the proposed changes to the Program Guidelines as described above.
• Modify the recommended changes prior to acceptance.
• Reject the proposed changes to the Program Guidelines.
FINANCIAL IMPACT
The proposed changes to the City of Alameda COVID-19 Emergency Rent Relief Program guidelines do not impact the amount of spending authority previously approved by City Council for the program. Therefore, there is no financial impact to City funds from acceptance of the proposed changes to the program guidelines.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The Emergency Rent Relief Program and the proposed changes to the guidelines are consistent with the City’s CDBG Five-Year Strategic Plan.
ENVIRONMENTAL REVIEW
This item is exempt from review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378 (b) (not a project); and Section 15061(b)(3) (no significant environmental impact). The implementation of the CDBG-funded Emergency Rent Relief Program is subject to the requirements of the National Environmental Policy Act (NEPA) and satisfactory environmental clearance pursuant to 24 CFR Part 58.
CLIMATE IMPACTS
This action has no climate impacts.
RECOMMENDATION
Accept proposed changes to the Emergency Rent Relief Guidelines and authorize the City Manager to approve future changes to the Guidelines.
Adopt an Urgency Uncodified Ordinance (A) Imposing within the City of Alameda a Temporary Moratorium on (1) Residential and Commercial Evictions Due to or During the COVID-19 Pandemic, (2) Landlords’ Shutting off Utilities in Residential and Commercial Rental Units Except for Emergency Situations and Essential Activities, and (3) Rent Increases for Fully Regulated Residential Rental Units Until January 1, 2021, and (B) Repealing Ordinance No. 3273.
CITY MANAGER RECOMMENDATION
The City Manager concurs with staff recommendation.
Respectfully submitted,
Debbie Potter, Community Development Director
Lisa Fitts, Community Development Program Manager
Financial Impact section reviewed,
Nancy Bronstein, Acting Finance Director
Exhibits:
1. Proposed Guidelines (redlined)
2. Proposed Guidelines (clean)
cc: Eric Levitt, City Manager