Writer and editor of Rogers Park Builders Group’s Quarterly Newsletter, The Builder
Stacie Young, Preservation Compact Director at Community Investment Corporation, has at least some good news for long-suffering housing providers. There is money out there for rent relief. It is a very big number. And even more is on its way.
The bad news is that there are categories of tenants who are not covered by these programs, and for whom approvals will not be granted if applications are made. More on that below.
Just days before the end of 2020, and with just a few weeks left in the Trump presidency, Congress passed a massive $900 billion stimulus package. This bill was the follow up to the earlier, and much more limited, Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) that passed in March 2020.
The December stimulus bill included $25 billion for rental relief, of which $800 million has been allocated to the state of Illinois. Stacie says approximately $80 million has been allocated to the City of Chicago, and another $73 million to suburban Cook County. The rest of the relief money has been directed to the Illinois Housing Development Authority (IHDA) – over $500 million in total. The IHDA money can be used anywhere in the state, Chicago and Cook County included.
But that’s not all. Once President Trump left office, President Biden made a third COVID relief bill his top priority and, through Budget Reconciliation, was able to pass a $1.9 trillion relief bill through Congress despite solid Republican opposition. This new relief bill will contain yet more funds for additional rent relief to housing providers and tenants, easily doubling the amount of such relief available under the current (December) relief bill. This new round of money has not yet even started to be delivered as the previous round is only now working its way through the system.
There is little debate that this money is much needed. A recently completed survey by the Neighborhood Building Owners Alliance and Essex Realty Group finds that housing providers in Chicago alone lost more than $1 billion between March 2020 and March 2021. With the eviction moratorium still in place, this number is increasing every month.
Once President Trump left office, President Biden made a third COVID relief bill his top priority…
The good news is that more money will be forthcoming with the Biden relief bill. Between current and future funding sources, there could be enough money to cover all of the rent losses incurred during the pandemic for housing providers and tenants. (Again, this is only true for certain categories of tenants. For program restrictions, keep reading.)
Of course, getting the money where it is needed will be a challenge, and requires the creation of a workable application, approval and distribution systems. This is clearly a tall order and an unprecedented challenge for state and local governments. At the same time, IHDA is widely credited with having creating a workable (if not perfect) distribution system for the previous round of CARES Act money, and has made great efforts to improve on this performance the second time around.
Suburban Cook County was the first of the three government entities to set up a system for distributing rent relief funds. The bad news for readers of this article is that the deadline for applying for rent relief through Cook County expired in April – too late for anyone reading this article now. The good news is the City of Chicago and IHDA funds are available now. IHDA money can be used anywhere in the state of Illinois, including both Chicago and suburban Cook County.
The City of Chicago’s Emergency Rental Assistance Program (ERAP) launched on May 24th. This program is being administered by the City’s Department of Housing (DOH). For more information, check the DOH website for details on how to apply.
City and County programs notwithstanding, it is IHDA that has received the bulk of the federal rent relief money, and IHDA that will be the primary source of relief funds in the state of Illinois. IHDA launched their program on May 17. Stacie notes that owners of properties in Chicago or Cook County can (and, if possible, should) apply for relief with both state and local entities. There is no prohibition to applying to more than one governmental agency. Also, IHDA and DOH have their own de-duplication process to avoid any potential double-payments. In a worst-case scenario, if two applications are simultaneously approved, it would just be up to the property owner to return one of the two relief checks.
it is IHDA that has received the bulk of the federal rent relief money, and IHDA that will be the primary source of relief funds in the state of Illinois
Stacie recommends keeping three additional webpages handy as rent relief programs in Illinois are finalized and outreach to the public ramps up: in addition to the IHDA and DOH sites, the Rent-Help website is also a great source of information on all of the Illinois programs. The websites note that the IHDA program will only allow reimbursement of missed rents and will not allow reimbursement for missed utility payments. This is in contrast to both the City and County programs which will allow (or, in the case of Cook County, already allowed) utility relief as part of the rent relief application.
Housing providers can expect the following program features with the IHDA program:
- Housing providers and tenants can apply for as much as 12-months of previously unpaid rent, and three months of future rent – a total of 15 months of total rent relief.
- Initially, the IHDA program, known as the Illinois Rental Payment Program (ILRPP), is open to providers of housing who are expected to make the application and receive the rent relief money. Tenant cooperation is needed as they must affirm the need for rent relief.
- The DOH (city) program is open to both owners and tenants as direct applicants, although both parties need to cooperate in order for an application to be approved. If the tenant initiates the application with DOH, and the owner does not respond and complete their portion of the tenant’s application, the rent relief will be paid directly to the tenant.
- There will be no citizenship requirements under the rent relief program. If tenants are undocumented, they can still qualify for the same rental assistance as tenants who are US citizens.
- Tenants with household incomes below 80% of AMI will be given preference for rent relief. In the Chicago metro, 80% of AMI for a one-person household is $52,200 and for a four-person household is $75,550. Income restrictions can be found at this link for every county in Illinois.
- The DOH program requires that housing providers forgo their rights to pursue evictions for a period of 90 days after the rental assistance benefit expires. In other words, if an award for three months of future unpaid rent is made, no eviction procedure could begin until 90 days following the end of the three-month period of prepaid rent. This restriction does not apply under the IHDA program.
But there are some pretty big loopholes regarding who can apply and what applications will and will not be approved. Two big ones are:
- Tenants must cooperate in the application process. If a housing provider has a tenant who is just gaming the system and using COVID as an excuse for not paying rent, do not expect DOH or IHDA to approve rent relief if that tenant remains uncooperative, or refuses to claim a COVID impact. Under the rules of the current rent relief program, these applications will be denied.
- Housing providers who had hoped to recover unpaid rent from tenants who had unpaid rent balances, but who have since moved out of their units, will be disappointed. Tenants must still be in their units in order to qualify for rental assistance. If they have moved out – no matter how much back rent they owned – no assistance will be approved.
Many of the worst non-payment offenders are those who are using the eviction moratorium to simply not pay rent, regardless of their financial circumstances. Other tenants who had real COVID impacts, but who gave up their struggle to pay rent and have moved out of their units, are also not eligible for rent relief.
It’s hard to say how much of the back rent housing providers are owed comes from these two categories of tenants. The fact that neither group is eligible for assistance essentially means that housing providers will be left holding the bag for a large amount of past-due rent, even with all the money that the current program provides, and that the Biden stimulus money will be bringing to the table.
There will be no citizenship requirements under the rent relief program. If tenants are undocumented, they can still qualify for the same rental assistance as tenants who are US citizens.
As RPBG and NBOA President, Mike Glasser, wisely said, these rent relief program are intended to provide rent support to struggling tenants, not struggling housing providers. Like it or not, this is the world we live in.
More optimistically, remember that all of the rent relief discussed in this article pertains to the $900 billion stimulus bill approved in December 2020. At least as much money has been allocated to rent relief under the Biden stimulus bill passed in February. This money has not even started to be distributed, and will be made available at some future date once the December money has been spent. Perhaps the rules for who does and does not qualify will change between now and then, widening the range of circumstances for which rent relief will be considered.
The main take-aways from this article are (1) there is an awful lot of relief money out there with more on its way; (2) the City and IHDA programs have launched but will only be open until June 7th (IHDA-ILRPP) and June 8th (DOH-ERAP); (3) program requirements are intended to get money directly to housing providers; however, (4) program restrictions will limit the benefit of this program to housing providers and will NOT cover all lost rent under all circumstances.
Despite these program restrictions, some help is better than none. The best advice as of the writing of this article is to log onto the DOH, IHDA and Rent-Help websites for further information, and get your applications in before the window closes. You can and should apply to both IHDA and the City if you have tenants inside city limits who are seeking rent relief.
Help is on the way. Make the most of it.