The Pennsylvania Housing Finance Agency raised these concerns with legislative leaders in July, shortly after the program launched.
But it was not until October that the Republican-controlled House unanimously approved a bill introduced by Rep. Sue Helm (R., Dauphin) that would have made last-minute fixes to the program, simplified the application process, and given Pennsylvanians more time to apply. The bill did not advance in the Senate, where Republicans also hold the majority.
Some requirements were eventually relaxed by Gov. Tom Wolf, allowing landlords and tenants to enter into payment plans for rent outside of the $750 payments.
Then there was a late surge in applications, but not enough time to process them all before Nov. 30, said Bryce Maretzki, director of policy and planning at the Pennsylvania Housing Finance Agency.
“All the counties could probably have continued to get more funds out,” Maretzki said. “The rush at the end in the last 30 days showed that there really is a significant amount of unmet need still.”
Both programs paid out less than half of the funding allocated, underscoring the perils Pennsylvania faced in rapidly creating programs from scratch to distribute $2.6 billion from the CARES Act.
The problem was not a lack of demand for the money.
An estimated 240,000 Pennsylvania families could face eviction in January, unless a federal ban on evictions for nonpayment of rent is extended. Congress is nearing agreement on a $900 billion relief package that would include $25 billion in emergency rent assistance and extend the eviction ban until the end of January. It’s not clear whether that money could come soon enough to stave off what advocates warn could be a surge of eviction cases in the new year.
In November, as the state entered budget negotiations, it still had $1.3 billion in leftover CARES Act money. The remaining money from the mortgage and rent relief programs was originally supposed to go to the 60 counties that didn’t receive direct federal funding as the pandemic struck.
The state must spend all its CARES Act funding by the end of the year.
One reason for the change was concern that counties would not be able to meet that deadline, said Jason Gottesman, a spokesperson for House Republicans.
States are not allowed to use funding from the CARES Act to fill budget holes caused by revenue shortfalls, only for additional spending related to the pandemic.
Guidance from the U.S. Treasury, however, says that states can “presume” that payroll costs for public safety employees “are payments for services substantially dedicated to mitigating or responding to the COVID-19 public health emergency.”
Jared Walczak, vice president of state projects at the nonprofit Tax Foundation, said Pennsylvania’s use of CARES Act funding appears similar to the approach taken by other states.
“If Treasury were to audit and reject these allocations, Pennsylvania could have to return the disputed funds,” he told Spotlight PA. “But from what I see in how Pennsylvania’s spending this, it’s in line with the way a lot of other states are interpreting the Treasury guidance and is unlikely to prompt such a response.”
Even the $150 million allocated for rent relief falls well short of the estimated $958 million in back rent that Pennsylvania tenants will owe come January, according to a study commissioned by the National Council of State Housing Agencies.
“We did as much as we could given what we had to work with,” Maretzki said. “There was far more demand for the money than there was assistance.”
Ed Mahon of Spotlight PA contributed to this report.