Missouri House budget committee signs off on $320 million for rental assistance

Missouri lawmakers are hoping to quickly approve about $320 million in funding for rental assistance — part of the $25 billion in rental assistance passed by Congress in December’s COVID-19 relief package.

The House Budget committee unanimously voted to advance the funding bill Tuesday afternoon. House Budget Committee Chairman Cody Smith, R-Jasper County, expects the House to approve it later this week.

“We want to get this out to the folks who need it as quickly as possible across the state,” Smith said.

Missouri Housing Development Commission Director Kip Stetzler faced tough questions from committee members about how the state agency will be able to get this money out the door quickly. Before the onset of the pandemic, the commission administered only about $3 million of housing assistance a year.

“That’s exponential growth in a very small amount of time,” Smith said. “It makes me a little nervous about the deployment of these resources.”

The commission has spent less than half of the $28 million in CARES Act funding for housing assistance that’s been available since December.

About $10 million of that federal funding has been awarded to local nonprofits and agencies to provide this rental and utility assistance, said Stetzler. However, he can’t say how much those groups have actually spent.

Another approximately $2 million has gone to landlords, through the commission’s Missouri Emergency Rental Arrears Program (ERAP), which launched on Jan. 4. 

Within the first week, the commission received 2,000 applications, and Stetzler estimates that the applications take about 10 days to process. He wasn’t sure how many applications have been processed so far.

Rep. Peter Merideth, D-St. Louis, said he’s heard from groups that mediate eviction cases between tenants and landlords that the ERAP application can take between five to 10 hours to complete. Merideth asked the director if there is a way to streamline the application process.

“No, that’s always the challenge,” Stetzler said. “We have to balance out trying to get this money out the door as quickly as possible to those that need it. But also making sure that we keep an eye on applications from folks that don’t qualify.”

In Missouri, Stetzler said the estimated rental shortfall is between $294 million and $417 million, according to an independent study from the National Council on State Housing Agencies. The estimated number of Missouri households at risk of eviction are between 150,000 to 230,000. 

“So, certainly, I think the need is there,” Stetzler said.

The formula the federal government used to terminate how much the states received was based on population. Missouri was awarded about $408 million, but the state’s seven largest counties — Clay, Green, Jackson, St. Louis and Jefferson counties and Kansas City and St. Louis city — were able to apply directly to the U.S. Department of Treasury for this money.

That total was about $90 million. Now, the state would receive $311 million, but the state’s budget director believes the accruing interest will bump that amount up to $322 million by the time the bill passes and the governor signs it. 

St. Louis city already received its $9 million from the Treasury, said Steve Conway, chief of staff for St. Louis Mayor Lyda Krewson.

St. Louis city residents make up 5 percent of the state’s population, and based on the formula, they should have received 5 percent of the $408 million — which would be $20 million. 

“We’ve only received 45 percent of our share,” said Conway, just like the other larger counties that applied.

Kansas City received $14.8 million, Jackson County $11.6 million, and Clay County $3.6 million, according to a press release from Congressman Emanuel Cleaver.

Merideth asked if the state would be able to give additional money directly to these eight governments if their rental assistance programs run dry. Stetzler said he did not know.

Likely these residents would have to apply directly to the state, he said.

Tenants could apply as early as Feb. 1, Stetzler said, but they will not open the application until the legislature approves the bill.

Some legislators expressed concern that the commission would administer these funds using a 2.5 percent administrative cut of the total. The federal government says up to 10 percent could be used.

“It certainly is a lot of money,” Smith said.

However, St. Louis city has been processing tenants applications since July, and Conway said it’s a time-consuming process. The city has worked with the United Way and other organizations, but some struggle to complete the workload with just a 10-percent administrative fee.

“We’ve found some charity organizations that have waived any fee,” he said. “But employees have to be paid, and new staff has to be paid to be doing this work.”

Conway expects the city will be able to begin processing applications for this new funding on Feb. 15.

Cleaver said the funds will help avoid an “eviction tsunami.”

“The eviction crisis is one that continues to grow with each passing day,” Cleaver said, “as thousands of Missourians have been displaced from their home since March.”