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Biden move to withdraw rental aid threatens to squeeze rural tenants


A Biden administration plan to claw back billions of dollars in unused rental aid has sparked an outcry from Democratic lawmakers and from housing groups who warn that struggling rural tenants will lose a lifeline just as the virus surges again.

About half of the $46.5 billion in federal rental aid made available during the pandemic is expected to be spent by the end of this year, and the Treasury Department is planning to reallocate funding to areas that have seen the greatest demand, or at least have been the most efficient at delivering funds.

The shift means that rural parts of the U.S. — including Wyoming, Montana and the Dakotas — are poised to see some of their available funding pulled back. It’s triggered protests from Democrats on Capitol Hill and from housing advocates who say that tenants in those areas are still suffering from Covid-19’s economic fallout but may have missed out on the funds because local aid programs failed to reach them. Experts also say rural renters may be flying under the radar because of inadequate data on who is in most need of assistance.

“If you’re living in rural America, you’re getting hit pretty hard,” said Rep. Emanuel Cleaver (D-Mo.), who chairs a subcommittee on housing policy. “We’ve got millions of residents who are now, today, experiencing acute housing problems that frankly are oftentimes overlooked because the attention is on big-city housing issues.”

The pushback is the latest tension to emerge from the federal government’s renter rescue, which was intended to keep Americans housed and landlords whole during Covid-19. States and cities responsible for doling out the funds have strained to execute distribution programs over the past year. They had distributed less than 30 percent of the money as of the end of October, according to the latest figures made available by the Treasury Department. Congress required Treasury to reallocate “excess funds” from jurisdictions with low disbursement rates to those that need additional funding.

Rural America accounts for 5.1 million of the nation’s renter households, according to the Urban Institute, with nearly 20 percent paying more than half their incomes on rent. An analysis of government data by Harvard University’s Joint Center for Housing Studies found that 48 percent of renters living in rural areas and small towns had incomes below $25,000 in 2016.

During the coronavirus pandemic, nonmetropolitan regions that depend on farming and manufacturing have faced the highest Covid-19 case rates in the country.

The most densely populated cities — such as New York — were slow in distributing rental aid at the beginning of the year. Rural areas are still scrambling to get the money out the door.

Rural counties and states in many cases lack infrastructure — in terms of both government agency staff and broadband access — to find tenants in need and enroll them in hastily built new assistance programs.

“The need is there,” said Sarah Kackar, director of rural initiatives at affordable housing group NeighborWorks America, which has 118 rural member affiliates around the country. “The geographic isolation and information gap are two really large struggles.”

Corianne Payton Scally, a researcher at the Urban Institute who has studied rural housing, said a lack of reliable Internet and cell phone service has impeded aid applications, as have transportation barriers that have prevented people from filling out paper applications.

The difficulties connecting with rural residents who may benefit from the aid has made it harder to assess who needs help.

“Not having great data is definitely hampering,” said Elizabeth Glidden, deputy executive director of the Minnesota Housing Partnership. “We’re concerned that some rural renters are remote, hard to reach and then not getting connected to the benefits that they should be qualified for and need.”

It’s also unclear based on available data the extent to which rural tenants have been affected by the Supreme Court’s decision in August to block the federal eviction ban.

Carl Gershenson, who tracks evictions as project director of Princeton University’s Eviction Lab, said financial hardships in rural areas don’t always result in people losing their homes but tend to lead to overcrowding or individuals living in “extremely low-quality” housing. Eviction Lab, one of the most widely cited sources for such data, largely focuses on urban areas.

“These are places that are not going to show up in our eviction statistics, but they need money badly,” Gershenson said.

Cleaver — whose home state of Missouri is nearly 40 percent rural and had spent just 23 percent of its first round of rental funds as of Oct. 31 — said in an interview that big cities have organizations that exist solely to stir activism around high-quality rental housing.

“You won’t find that anywhere in rural America,” said Cleaver, who has been pressing Treasury on the issue.

The concerns of Cleaver and other lawmakers have become more urgent following a Nov. 30 deadline for states and cities that had spent most of their first round of rental aid to apply for additional funds that will be clawed back from other areas. Treasury is sorting through the applications and expects to announce reallocations this month, according to a senior Treasury official who declined to be named to discuss the process.

The senior official said the department is aware that states with rural areas have had a harder time connecting with vulnerable tenants and that it can be difficult to accurately assess need as a result.

Any state or local program that failed by mid-November to obligate at least 65 percent or spend 15 percent of their share from the first $25 billion approved by Congress stands to lose money. Treasury spokesperson Dayanara Ramirez emphasized they will still have access to a second $21.6 billion batch of funds that lawmakers authorized in March.

A few rural states are obvious candidates to see funds taken away. As of Oct. 31, South Dakota had spent 4 percent of its first round of funds; Wyoming, 5 percent; North Dakota, 6 percent; and Montana, 11 percent. None of those states have separate county or city programs within their borders to which they can redirect money.

Sen. Jon Tester (D-Mont.) says his state — led by Republican Gov. Greg Gianforte — has imposed “severe red tape” on the aid distribution process. Aid applicants must provide income documentation, a copy of their lease and documents demonstrating their need, such as a past-due rent notice or utility shutoff bill, according to the state program’s website. Treasury has encouraged program operators to rely on applicants’ self-attestations of need and income.

“It’s going to cost many Montana renters the roofs over their heads if these resources disappear due to the negligence of state government,” Tester said.

Gianforte’s office did not respond to a request for comment.

State programs in Nebraska, Idaho and Tennessee also appear to be at risk, but their unused funds could go to city programs within their borders that have high expenditure rates.

Gershenson said he was most concerned about rural Southeast counties with large Black populations that tend to have higher eviction rates.

The state rental aid programs in South Carolina and Georgia had spent less than 15 percent of their first round of federal funding by Oct. 31. Their money could be moved to metro areas such as Charleston County, S.C., and Atlanta, which had each spent all of their first round funds.

House Majority Whip Jim Clyburn (D-S.C.) — whose state consistently posts some of the highest urban and rural eviction rates in the country — said rural tenants often go overlooked in the larger political discussion about the shortage of affordable housing

“When most people think about this crisis, they think about urban areas,” Clyburn said at a rural housing conference this month. “This picture is incomplete. … We must bring down eviction rates everywhere, but we have the most work to do in rural communities.”

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