Title:
Title
(City Council/Housing Authority) COVID-19 Response: CARES Act Framework and Funding Priorities; Homelessness: Sacramento Emergency Rental Assistance (SERA) Program
End
FileID
File ID: 2020-01087
Location
Location: Citywide
End
Recommendation:
Recommendation
1) Adopt a City Council Resolution: a) approving the Sacramento Emergency Rental Assistance (SERA) program as the homeless prevention program (HPP) and authorizing Sacramento Housing and Redevelopment Agency (SHRA) and the Housing Authority of the City of Sacramento (Housing Authority) to jointly administer SERA; b) approving the Housing Authority’s use of $2,701,166 of Coronavirus Aid, Relief and Economic Security Act, Coronavirus Relief Funds (CARES CRF) for the administration of SERA; c) authorizing the amendment of the Housing Authority’s budget in the amount of $2,701,166 of CARES CRF funds for the SERA program; d) authorizing SHRA or the Housing Authority to increase its head count by 4 to hire full-time employees to administer the program; e) authorizing SHRA and the Housing Authority to enter into and execute any contracts and related documents necessary to administer the SERA program; f) authorizing the City Manager to enter into and execute any contracts and related documents deemed necessary for the purpose of allocating the SERA Funds to the Housing Authority; g) directing SHRA to take all actions necessary to allocate $2,000,000 of the most appropriate federal funds for administration of the SERA Program; and h) make related findings; and 2) adopt a Housing Authority Resolution: a) approving the Sacramento Emergency Rental Assistance (SERA) program as the homeless prevention program (HPP) and authorizing the Housing Authority (Housing Authority) to administer SERA; b) approving the Housing Authority’s use of $2,701,166 of Coronavirus Aid, Relief and Economic Security Act for the administration of SERA; c) authorizing the amendment of the Housing Authority’s budget in the amount of $2,701,166 of CARES CRF for the SERA program; d) authorizing the Executive Director to increase its head count by four to hire full-time employees to administer the program; e) authorizing the Executive Director or her designee to enter into and execute any contracts and related documents necessary to administer the SERA program; and f) make related findings.
FileName
Contact: La Shelle Dozier, Executive Director, (916) 440-1319; Sarah O’Daniel, Director, Housing Choice Voucher (HCV) and Homeless Innovations Department, (916) 440-1319, Sacramento Housing and Redevelopment Agency
Body
Presenter: Sarah O’Daniel, Director, Housing Choice Voucher (HCV) and Homeless Innovations Department, (916) 440-1319; MaryLiz Paulson, Assistant Director, Homeless Innovations Department (916) 440-1310, Sacramento Housing and Redevelopment Agency.
Attachments:
1-Description/Analysis
2-Outreach Activities
3-City Council Resolution
4-Housing Authority Resolution
Description/Analysis
Issue Detail: In Spring 2020, the United States was impacted by the Coronavirus (COVID-19) pandemic which significantly impacted the nation and the City of Sacramento. On a national level, Bloomberg News reported on August 25, 2020 that 16 million people in the U.S. are currently out of work and one third of renters cannot pay for their housing. According to a national study ‘The COVID-19 Eviction Crisis: An Estimated 30-40 Million People In America Are At Risk’ collaboratively published on August 7, 2020 by staff from various well renowned universities, with the end of the eviction moratorium approximately 30 million Americans are “at risk” of being evicted in the coming months. This will result in a large wave of housing displacement and insecurity.
The nation is bracing for an eviction crisis of historic magnitude. Studies show that evictions affect Black and Latino renters at higher rates than white renters. Renters with children are also more likely to be severely impacted by the eviction crisis. The pandemic has placed an enormous economic strain on families to pay rent and subsequently strained landlords and property owners to pay mortgages. Many legislative bills have been passed in recent months to provide temporary relief to rental households.
Rent Relief Bills
At the local level, on March 17, 2020, the Sacramento City Council adopted an emergency ordinance to establish a temporary moratorium on evicting residential tenants unable to pay rent due to COVID-19. The City’s ordinance allowing non-payment of rent was extended until September 30, 2020 in accordance with the Governor’s Executive Order issued on June 30, 2020. City renters have 120 days after the expiration date of the moratorium, or January 28, 2021, to pay back rent that is owed to avoid eviction.
At the state level, on August 31, 2020 the California Legislature approved and the Governor signed urgency ordinance Assembly Bill 3088. Also known as the “COVID-19 Tenant Relief Act’, this bill prohibits residential evictions for renters who missed rental payments between March 1 and August 31, 2020.
Renters who are impacted by COVID-19 will have to pay at least 25% of each rental payment that comes due or will come due between September 1, 2020 and January 31, 2021 in order to prevent eviction. However, if the renter cannot pay 25% of each rental payment, the landlord can proceed with an eviction starting February 1, 2021. Assembly Bill 3088 still requires renters to pay the full cost of rent and landlords have the ability to take tenants to small claims court starting March 1, 2021 to receive unpaid rental payments.
On September 4, 2020 the Federal Center for Disease Control and Prevention (CDC) announced the issuance of an Order to temporarily halt residential evictions to prevent the further spread of COVID-19. Under this Order, “a landlord, owner of a residential property, or other person with a legal right to pursue eviction or possessory action, shall not evict any covered person from any residential property in any jurisdiction” through December 31, 2020. While there is a moratorium on evictions, there is no relief provided to erase past tenant payments that will be due in 2021.
Financial Relief
To provide financial relief to families impacted by COVID-19, on March 27, 2020 Congress approved the Coronavirus Aid, Relief and Economic Security Act (CARES), Public Law 116-136. This act established a $150 billion Coronavirus Relief fund.
Commencing in mid-April, the Internal Revenue Service delivered one-time stimulus checks of $1,200 for individuals earning below $75,000 and $2,400 for couples earning below $150,000. In addition, $600-a-week of supplemental federal unemployment helped families who were unemployed due to COVID-19.
All payments from the federal government have currently ceased and many residents who are still unemployed/under employed do not have the funds to pay their rent or mortgages. The nation is bracing for an eviction tsunami which will disproportionately impact low income families leading them to the precipice of homelessness.
With the approval of the CARES Act on March 27, 2020, local jurisdictions received funds to reduce the impact of COVID-19 on the local economy. On April 21, 2020, the City of Sacramento received $89.6 million in CARES Coronavirus Relief Funds (CARES CRF).
On May 12, 2020, Council participated in a workshop to discuss a CRF framework and funding priorities, and on May 26, 2020 adopted a general framework proposed by the Mayor for funding priorities. Priorities were established to include small business assistance, getting people back to work, offering youth enrichment opportunities, addressing homelessness and housing issues and supporting families impacted by the pandemic. Cumulatively, $15.6 million was allocated for homeless initiatives. This included an allocation of $2.7 million approved on August 18, 2020 for the implementation of a Homeless Prevention Program (HPP) in the form of emergency rental assistance. The deadline for expending CRF funds is December 30, 2020.
On June 9, 2020, the U.S. Department of Housing and Urban Development (HUD) notified the City of Sacramento of the second allocation of the Emergency Solutions Grant Coronavirus funds (ESG-CV2) in the amount of $10,205,871 based upon a new formula. These funds were allocated to prevent, prepare for, and respond to the coronavirus pandemic among individuals and families who are homeless or receiving homeless assistance and to support additional homeless assistance and homelessness prevention activities to mitigate the impact of COVID-19.
SHRA received the Emergency Solutions Grant Coronavirus funds (ESG-CV2) on behalf of the City of Sacramento. The intent was to allocate $2.0 million in ESG-CV2 funds to augment the CARES CRF funds to implement a homeless prevention program as outlined in the City’s August 18, 2020 report.
On September 11, 2020 HUD awarded $3.6 million of CARES Community Development Block Grant (CDBG-CV3) funds to SHRA on behalf of the City of Sacramento. These funds were provided to “communities with high rates of individuals in industries with high job loss in states with high unemployment” to specifically help those struggling to meet their monthly rental or mortgage obligations.
Staff is currently reviewing federal regulations for both CARES ESG-CV2 and CDBG-CV3 to identify the best fit for the rental assistance program. Staff will augment the current CARES CRF funds with funds from either ESG-CV2 or CDBG-CV3 in the next 30-45 days.
At this time $2.7 million of CARES CRF funds will be allocated by the City Council to establish an emergency rental assistance program that provides rental payments to low income families for rent owed in arrears or for current payments, thereby preventing them from being evicted and becoming homeless. SHRA is also directed to allocate $2.0 million of the most appropriate federal funds for a total allocation of $4.7 million to the program.
As the entire nation is impacted by the pandemic, cities across the United States have adopted rental assistance programs. Given the limited data available on local unemployment statistics tied specifically to COVID-19, zip code data was reviewed to identify the highest number of COVID cases, the highest eviction records from 2014-2016 coupled with high Priority Index data.
The Priority Index data was obtained from the Urban Institute which estimates the level of need by measuring the prevalence of low-income renters who are at risk of experiencing housing instability and homelessness. The weighted index was:
o 50% weighted for housing instability risk (people living in poverty, renters, severely cost burdened households, unemployed families)
o 10% for families impacted by COVID-19 and
o 40% for equity (people of color, extremely low income renter households, households receiving public assistance).
Listed below are the top City zip codes most impacted by all three factors:
|
Zip code |
COVID cases |
2014-16 Eviction Average |
Priority Index |
|
95823 |
1,222 |
454 |
0.97 |
|
95838 |
631 |
320 |
0.92 |
|
95820 |
437 |
325 |
0.98 |
With the cessation of all federal stimulus payments coupled with high unemployment rates based on COVID-19, there is a significant need for an emergency rental assistance program to assist low income families and to prevent an onslaught of evictions in 2021.
During the August 18, 2020 City Council meeting, SHRA staff was requested to develop an emergency rental assistance program that meets the threshold eligibility of the funding sources and prioritizes families with children. Feedback was also received to assist non-documented and cash based workers. Upon further review, it was determined that the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) only allows the use of federal funds to provide emergency rent relief to U.S. citizens and non-citizens with eligible immigration status.
Staff has developed a program that will quickly assist families in need of emergency rental assistance. Extensive community input was conducted with partners including tenant and landlord advocates (Attachment 2). All input was thoroughly evaluated as the program was developed.
The table below summarizes the components of the proposed Sacramento Emergency Rental Assistance (SERA) program.
SACRAMENTO EMERGENCY RENTAL ASSISTANCE (SERA) PROGRAM
|
Total Fund Amount |
$4.7 million ($2.7 CARES CRF and $2.0 million other federal funds) |
|
Population Criteria |
Renter households with a City of Sacramento address who were employed but have experienced a loss of income due to COVID-19. |
|
Prioritization |
1. Families with minor children with income at or below 30% of area median income (AMI). 2. Families with minor children with income at or below 50% of AMI. 3. Families without minor children with income at or below 30% of AMI. 4. Families without minor children with income at or below 50% of AMI. See income chart below. |
|
Income Qualifications |
Families or individuals with a gross household income at or below 50% AMI. See income chart below. |
|
Assistance Payments |
Up to $4,000 per household which may be used for past due rent and remaining balance used for current rent payments if family is still unemployed. |
|
Duration of program |
CARES CRF funds are available for expenditure by December 30, 2020. ESG-CV2 or CDBG-CV3 is available for two years. The appropriate federal funds will be allocated. Program may end sooner if all funds are utilized prior to this timeframe. |
|
Benefits Status |
Eligibility excludes those living in public housing or receiving an ongoing rental subsidy from the government or non-profit entity. |
|
Administrator |
Sacramento Housing and Redevelopment Agency. |
|
Recipient of funds |
Rental property owner or landlord. |
|
Application Process |
Online. Dedicated staff will be available to answer questions by phone and will be stationed at 2 locations within the City of Sacramento to help families upload documents and/or provide other assistance as necessary. |
|
Application Process |
If more than 1,000 eligible households apply, a computerized random ordering will be applied to identify prospective program participants to begin the eligibility process. |
|
Funding Source |
CARES Act funding; CARES CRF To be augmented with appropriate federal funds |
|
Administration of program |
Verification of information will be part of the eligibility process. Payments will be made directly to the landlord after verification of amount owed. Landlords will be asked to sign a statement of non-eviction. |
|
Median Income |
Family of: |
1 |
2 |
3 |
4 |
5 |
|
$86,300 |
50% of AMI |
$30,250 |
$34,550 |
$38,850 |
$43,150 |
$46,650 |
|
|
30% of AMI |
$18,150 |
$20,750 |
$23,350 |
$26,200 |
$30,680 |
Policy Considerations: This initiative is consistent with the priorities of the City Council to assist low income families impacted by COVID with homeless prevention services (rental assistance) and other measures to maintain housing.
Economic Impacts: Not applicable.
Environmental Considerations: California Environmental Quality Act (CEQA): The proposed action is not a project under CEQA pursuant to CEQA Guidelines §15378.
National Environmental Policy Act (NEPA): The proposed action is categorically excluded under NEPA pursuant to 24 CFR 58.35(b)(2).
Sustainability Considerations: Not applicable
Financial Considerations: $2.7 million of CARES Coronavirus Relief funds (CARES CRF) was allocated to launch the emergency rental assistance program and $2.0 million of other federal funds will be allocated within 30-45 days.
Local Business Enterprise (LBE) M/WBE and Section 3 requirements: Not applicable