Rental crisis still looms
A recently announced state program to help with overdue rent impacts from novel coronavirus could be a big boost to many struggling local families.
With the continued rise in infections, however, and the likelihood it will affect some jobs for months, officials in helping agencies are concerned the assistance may not be enough to keep the community, already experiencing growing homelessness, from suffering a serious housing crisis.
Complicating the situation, at least one property manager said, is an influx of new residents seeking to escape larger cities because of the virus, putting greater pressure on landlords and an already tight housing market.
Landlords are the ones who must apply for the money through the Kansas Eviction Prevention Program, in cooperation with their tenants.
Community assistance started quickly after the pandemic shut local businesses down, through Rally Reno County – a joint effort of the Hutchinson Chamber, United Way and Hutchinson Community Foundation – plus Salvation Army programs and the efforts of local churches.
Coupled with federal and state-issued moratoriums that halted some evictions, it has prevented a crisis so far. But overdue rents are piling up, creating a situation local help programs will unlikely be unable to address.
“Some of these rental bills are astronomical,” said Kari Mailloux, program officer at the Hutchinson Community Foundation. “There’s no way (local agencies can cover them.) Most gatekeepers are church-oriented, so there’s not a single church that can contribute $500 for five people or they’re out of money.”
Through the Eviction Prevention Program, created by the Kansas Housing Resources Corporation and using $35 million in federal CARES Act dollars, renters may be eligible for up to nine months of assistance, not to exceed $5,000 per household, according to an agency release.
Landlords and tenants must apply jointly, with payments going directly to landlords. In exchange for the aid, landlords agree not to evict the tenant or charge late fees on the overdue months.
Sign up can be found at https://kshousingcorp.org.
Several studies pointed to the severity of the challenge in Kansas and the U.S., said Emily Sharp, Communications Director with the Kansas Housing Resources Corporation.
Using different methodologies, they came up with a range of projections, up to 155,000 renters in the state at least a month behind. But even the least severe estimated 60,000 to 80,000 Kansas tenants are behind, with projections of rental payments falling some $133 million to $155 million behind by January 2021.
“It’s sobering data,” Sharp said. “We’re seeing low- and moderate-income households are experiencing, on average, an almost 12 percent decline in revenues and a 15 percent increase in operating expenses due to the pandemic.”
“We know the need out there is great,” she said. “Many of these numbers were anticipated, so we’re working as quickly as we can to process applications… If the numbers hold firm and we get a flood of applications, we expect … there will be tremendous need perhaps beyond that.”
Based on request amounts they’re seeing so far, Sharp said, the agency believes it will be able to serve around 6,000 to 8,000 Kansas households.
“This, of course, is dependent upon a variety of factors, namely the assistance amount requested by each applicant,” she said.
While this is a statewide program and its accepting applications from across Kansans, so far more than half of its applications -- some 56% -- have come from Sedgwick County.
Before March 13, Reno County was averaging about 120 unemployment claims per week since the first of the year, according to data from the Kansas Department of Labor’s website.
The week of March 22, that jumped to nearly 1,000 claims, and a week later, more than 1,400. The county reached its peak in unemployment claims the week of April 26, with 2,367.
Even as business began to reopen, unemployment claims in the county were stuck at around 1,500 through June and July, and have averaged more than 1,000 per week since.
Only over the last couple of weeks has it dropped below 1,000 – just as community spread of the virus has taken off, pushing the number back up.
At the United Way, they were getting 10 to 20 requests for assistance per week when the Rally Reno fund, created through public donations matched by community foundation dollars, launched, said Denice Gilliland-Burbank, community impact coordinator.
Now, Burbank said, they are getting about 80 requests a week for rent and utility assistance.
At the Salvation Army, requests for housing assistance were accounting for 60 to 70 percent of their calls, and her workload for assistance requests has tripled, Shawna Logue, of Pathways of Hope at the agency told the Hutchinson Housing Commission last month. Additional information from that agency, including specific numbers, however, was not immediately available.
“There are a lot of other things people need help with, such as internet bills now that kids are in school, and we’ve had requests for phone bills, but we really only help with rent and utilities,” Burbank said.
The applicants have been people “across the board,” Burbank said, from production workers to fast food, but it has mostly been “entry-level workers, people that work hourly wage jobs.”
For those who qualified for it, the $600 federal boost to unemployment “really kept people afloat and helped them,” Burbank said. It ended months ago. A brief second assistance program offering an extra $300 through a presidential executive order is also expiring.
Cracks become crevices
“For an entry-level worker, they see $100 or $150 a week for unemployment, which is hard for anyone to live off of,” she said.
For many low-wage workers in the community “they were barely hanging on before, with a lot of bill juggling going on,” Burbank said. “It probably wasn’t uncommon for them to be behind a couple of weeks here or there and not paying one bill one month to cover another bill. We see a lot of it.”
“The cracks in our system have really become crevices when you go from knowing you’re going to get 30 hours a week and have two jobs to make ends meet and suddenly you’re down to 20 hours a week or only have one job, or hours at both jobs were cut.
"We’ve seen multiple people working two part-time jobs and their hours were cut, and they were not in a stable situation before.”
And those who were not laid off or furloughed but had hours cut don’t qualify for unemployment, she said.
Rally Reno had aided 232 families, distributing more than $166,000 or an average of about $700 each, as of two weeks ago.
While the community can address many of the immediate needs for food, medicine, and utilities, they cannot cover months of overdue rent.
“We know eventually that will run out,” Burbank said. “What we’re seeing is people being further and further behind. Instead of one or two months past due, now they’re three or four months past due. There isn’t any one organization in town that can handle paying three or four months of rent for a person that’s been waiting on unemployment or unable to find work. It’s a serious issue.
The governor issued a statewide moratorium on foreclosures and evictions in April and then extended it in September to run through Jan. 26.
The moratorium, however, is only on evictions directly related to people unable to pay rent due to job impacts from COVID-19 – whether that’s a lost job, cut hours, or having to stay home to care for children who can’t go school – and tenants must prove it. So evictions are still going on.
There was initially a lot of confusion about the eviction moratorium, said Hutchinson Planning Director Ryan Hvitlok, with some people thinking they didn’t have to pay rent and couldn’t be evicted regardless of their situation.
With the moratorium in play, many tenants stopped paying rent, and those bills – which at some point must still be paid – have been accumulating.
The city sent a postcard to every household in the county in May advising people on how to apply and provided facts about the eviction and utility deferments. “But you can only do so much to get information out to people,” he said. “It has to be the right time, and they need to understand and interpret it.”
“I know some are so far behind with one landlord it's possible they’ll not pay the landlord until they’re forced to move, and then they’ll have the funds to get a different place through a different landlord,” Burbank said. “That’s not a situation that helps anybody. It doesn’t help the landlord who is depending on those funds for income; it doesn’t help the community or the resident. It’s not a good situation for anybody.”
Competition for housing
Kelly Anne Lanham, the owner of Elite Real Estate and Property Management, which manages 450 housing units in the city, said they have a few tenants who may qualify for the Kansas Housing Resources program, but most of her tenants have been able to keep up with what assistance is available in the community.
“To be honest, we’ve not seen a huge rental loss since this started,” she said. “We may have a handful of people who would qualify. Between us being flexible on rent payments, unemployment benefits, and the Rally Reno Program, most of the tenants have been able to make it through.”
With things getting worse in the community in terms of COVID spread, however, along with “COVID fatigue,” she also believes the community may be only a month or two from a tipping point.
“On the flip side, we’re renting apartment faster than we can clean them,” Lanham said. “People are moving to town in droves. So, on that side, it’s very promising. It’s the small-town effect. People are getting out of the big cities and coming home or to a small town that looks more appealing.”
“This month we’ve already rented 20 units and in September we rented 15,” she said. “In my opinion, we’ve busier than we’ve ever been.”
This creates its own issues because rental inventories are low, Lanham said.
“Landlords know they need to move someone out to move someone in, which is where we worry landlords may take advantage of the situation too,” she said.
If people get evicted, Mailloux noted, “there’s nowhere for them to go.”
“Our housing is quite full, especially anything that can be labeled affordable housing,” she said. “People are getting stuck.”
“I think for a lot of people it will probably help,” Hvitlok said of the eviction prevention program. “With the moratoriums and things like that it has kept people in their homes... Hopefully, now they’ll be able to stabilize and keep current. At least it buys some time.”
“But do the math,” he said. “I don’t know how many are facing eviction in the state. I’ve heard it’s possibly tens of thousands, which will probably go pretty quick.”