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There’s widespread agreement in the Capitol that Pennsylvania’s $150 million rental assistance program to keep families in their homes during the coronavirus pandemic isn’t working.
A $750 cap on monthly assistance payments, as well as a requirement that landlords forgive any outstanding rent above that cap, has made many reluctant to participate. In Philadelphia, for instance, almost two-thirds of applications cannot move forward, because they come from tenants whose landlords won’t take part.
Democrats in the state legislature have proposed a raft of changes to fix the problem. But no one is talking about what some experts say might be a better solution: giving the money directly to tenants instead of landlords.
If the assistance payments went to tenants directly, the program would likely have a “significantly higher” participation rate in Philadelphia, said Gregory Heller, senior vice president of community investment at the Philadelphia Housing Development Corporation, which is administering the rental assistance program in the city.
“If the challenge is getting landlords to participate, there is a different approach,” he said.
Section 8, the federal government’s main rental assistance program for low-income families, has a similar problem. In Philadelphia, just 50% of voucher holders are able to use them, research shows. Like Section 8, most rental assistance programs are set up to pay landlords directly.
The downside is that landlords typically have to agree to participate upfront, often filling out paperwork and accepting certain conditions. This creates an “administrative cost” that can become a deterrent, said Vincent Reina, an assistant professor of city and regional planning at the University of Pennsylvania.
Giving money directly to tenants, instead, reduces that administrative cost.
With cities and states scrambling to set up new programs to distribute CARES Act funding, relatively few have tried this approach. Chicago offered one-time cash grants to struggling tenants — money that was paid to them directly.
Paying tenants can also bring more flexibility, said Ann Oliva, a visiting senior fellow at Center on Budget and Policy Priorities who previously worked for 10 years at the U.S. Department of Housing and Urban Development. That can help assistance reach people who might be shut out of programs that require tenants to have a written lease, for instance.
Still, paying rental assistance to tenants and not their landlords would require a radical shift in how we think about public assistance programs, experts acknowledge.
Concerns about how cash benefit payments are spent have led lawmakers nationwide to institute strict rules and regulations intended to ensure accountability for public money. But these measures often create inefficiencies that tend to fall on the low-income families trying to get help, Reina said. What if, instead, policymakers trusted those families to spend their assistance payments on the things they need the most?
“People often don’t realize how difficult it is to use housing assistance in its current form,” he said.
This story was updated to clarify two statistics provided by Gregory Heller of the Philadelphia Housing Development Corporation.
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