What would you call an unprecedented number of Minnesotans owing back rent (many on the verge of homelessness) combined with an unprecedented $9.25 billion state budget? It might be called the “perfect peace” as opposed to the “perfect storm.”
As the negative economic impact of COVID-19 over the past two years has doubled the number of families and individuals behind on their rent, the state’s budget surplus has provided the opportunity to give significant aid.
According to the latest statistics, more than 50,000 families and individuals in Minnesota are one or more months behind on rent payments. Although the current rental crisis is partially attributed to the pandemic’s impact, the lack of adequate rental assistance has been plaguing the lowest income Minnesotans for a very long time. However, the current state’s budget surplus gives hope that relief, in the form of increased rental assistance funding, is possible to keep individuals and families housed and prevent a surge in homelessness.
This is an opportunity that state leaders should not let pass by. Supporting one or more of the initiatives currently before the Minnesota Legislature is important to bringing relief to over-burdened households, to landlords facing revenue shortfalls, and to banks and other lending institutions with investments in rental properties. Overwhelming evidence of the need for additional rental assistance is springing up everywhere. RentHelpMN, funded through Minnesota’s American Rescue Plan, recently closed its doors to further applications due to the burgeoning response since the program got up and running last October. Three months into the program (January 1, 2022) over 44,000 applications from folks behind on rent due to COVID-related hardship has been received and are being processed. The resulting pay-out to landlords and rental property owners was $333 million of the approximately $450 million available through the program. The remainder is expected to be paid out by the time the last application is processed.
Emerging statistics are reinforcing what low-income, cost-burdened Minnesota renters are living with every day — interruption in earned income due to lay-offs and sickness causing them to make the hard decision to stay current on rent or forego medical care, delay payment of other bills and cut the cost of providing food for their families.
According to the Rent Debt Dashboard, a new tool created by a California-based nonprofit, PolicyLink, and the USC Equity Research Institute, the national accumulated rent debt is $19.8 billion, representing 5.74 million households with average debt per household at $3,400. In Minnesota, the total estimated debt is $155.6 million for 53,000 households owing an average of $2,900.
One proposal before legislators is to utilize available funds from the American Rescue Plan Act to provide $300 million in emergency rental and landlord assistance through June 1, 2022. There are growing calls for swift passage of these resources so that RentHelpMN can re-open, providing desperately needed resources to Minnesota renters and landlords.
Provision for a permanent rental assistance program is included in a bill (H.F. 40), which has been introduced in the Minnesota House and is currently being heard in committee. The bill creates and funds a new rent assistance program that would be administered by the Minnesota Housing Finance Agency. Under the program, MHFA would issue grants to local housing authorities which would then issue assistance to individuals or families with an annual income less than 50% of the area median income and who are paying more than 30% of that income on rent.
Another form of rental assistance gaining traction among state leaders is providing state money to fully fund the federal housing voucher program for everyone eligible. The housing choice voucher program is the federal government’s major program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. Since housing assistance is provided on behalf of the family or individual, participants may find their own housing, including single-family homes, townhouses and apartments.
We caution, however, that additional expenditures need to be made judiciously, despite the surplus. We continue to advocate for careful spending, securing the state’s backup coffers and returning some to taxpayers.
The number of rental assistance proposals that have surfaced to meet the growing crisis in Minnesota should give everyone, regardless of their political persuasion, something to support. The benefit of rental assistance is widespread, from individuals and families to landlords and property owners to bankers and mortgage lenders.
There is something in it for everyone and, as such, we would encourage bipartisan support.
— An editorial from the APG of East Central Minnesota Editorial Board. Reactions are welcome. Send to: email@example.com.