Arkansas urged to give renters relief; $7.2M of $173M funds distributed to households so far

Gov. Asa Hutchinson (left), R-Ark., and U.S. Rep. James Clyburn, D-S.C., are shown in these undated file photos. (Left, Arkansas Democrat-Gazette/Thomas Metthe; right, AP/Carolyn Kaster)
Gov. Asa Hutchinson (left), R-Ark., and U.S. Rep. James Clyburn, D-S.C., are shown in these undated file photos. (Left, Arkansas Democrat-Gazette/Thomas Metthe; right, AP/Carolyn Kaster)

Arkansas is one of five states under pressure from Congress to speed up the distribution of emergency rental assistance funds to renters in need.

As of Aug. 30, the state has given out $7.2 million, just 4% of the $173 million it received from the federal government earlier this year to help citizens who are behind on rent due to the ongoing covid-19 pandemic, according to state Department of Human Services data that Gov. Asa Hutchinson presented at a Tuesday news conference.

[DOCUMENT: Read the letter sent to Gov. Asa Hutchinson » arkansasonline.com/96clyburn/]

The program has aided 2,908 households, but 10,726 more have requested a total of $43 million, according to state data.

Hutchinson received a letter on Aug. 30 from U.S. Rep. James Clyburn (D-S.C.) urging the state to make the application and distribution process more accessible and efficient. Clyburn contacted the governors of Alabama, North Dakota, South Dakota and Wyoming with the same request, since those states also lag behind in providing tenants with financial aid.

He called Arkansas' distribution "far too slow," citing the program's disbursement of only $3.2 million by the end of July.

"Arkansas' failure to effectively distribute rental assistance funds threatens to worsen the intense surge in coronavirus cases and hospitalizations that the state has experienced in recent weeks, as evictions and homelessness have been shown to increase the number of coronavirus cases and deaths," wrote Clyburn, House Majority Whip and chairman of the House Select Subcommittee on the Coronavirus Crisis.

Hutchinson said last week that he has challenged the Department of Human Services to "streamline" the program and remove unnecessary delays.

"We want to be able to get that money out to those who are in great need of it," Hutchinson said. "We are working hard on getting that rent relief out without compromising the integrity of the whole program."

More than 13,720 households have applied for rental assistance since April, according to the data.

About 2,900 have received funds, and 2,505 more have made it through the approval process and will receive funds. The Department of Human Services denied 93 applications.

The remaining 8,221 applications are awaiting more information.

Hutchinson's communications director, Shealyn Sowers, said in an email that 6,951 (85%) of these applications need either the tenant or the landlord to submit their application. Both parties must submit applications before the assistance is approved in Arkansas.

Landlords are more often the ones not participating, said Neil Sealy, the director of Arkansas Renters United.

Clyburn said in his letter that the landlord participation requirement is not necessary. The U.S. Department of the Treasury allows states to distribute funds directly to tenants if landlords do not participate.

Hutchinson said the state would consider whether removing the requirement would be helpful or make it easier for people to submit "fraudulent applications."

This concern is unfounded, according to the research team at the National Low Income Housing Coalition. The Washington, D.C.-based organization advocates for and researches policy that "ensures people with the lowest incomes in the United States have affordable and decent homes," according to its website.

Rental assistance programs that have sent funds directly to tenants have not seen increases in fraud, the coalition's communications director, Jen Butler, said in a Friday email.

Sealy said Hutchinson's "contempt for low-income people is shining through in those remarks" about potential fraud.

Sowers said the state provides renters with assistance without landlord participation "so long as we have confirmed the necessary relationship between the tenant and landlord."

"We just want to make sure the aid is going to those who need it," she said.

A federal ban on most evictions lasted from September 2020 to the end of July. It was briefly reinstated in August until the U.S. Supreme Court struck it down before the end of the month.

The Consolidated Appropriations Act and the American Rescue Plan allocated more than $46 billion in rental relief funds nationwide earlier this year. Only $4.9 billion has been distributed so far, according to an Aug. 25 news release from the U.S. Department of the Treasury.

Arkansas' three most populous counties -- Pulaski, Benton and Washington -- each received and have been distributing their own rental assistance funds through the Consolidated Appropriations Act, which gave the state its $173 million.

Clyburn said in a news conference on Aug. 30 that "where there's a will, there's a way" to distribute these funds, and in the five states he contacted, "there just doesn't appear to be a will to get this relief out."

Hutchinson disagreed with this allegation when asked about it at Tuesday's news conference. He also said Clyburn's letter ignores the fact that Arkansas "did not shut down our economy [and] did not reach the same unemployment rate as the rest of the nation."

The state has three full-time staff members working on the rental assistance program, and 89 contractors and 21 community-based organizations are helping landlords and tenants with their applications, Sowers said.

She also said the Department of Human Services has made a number of changes to the program since the end of July to make it run more smoothly.

The changes include reducing the program's documentation requirements, adding more staff who can process applications or answer questions, removing the landlord participation requirement from utility payment assistance and extending applicants' financial support windows so they do not have to reapply.

The National Low Income Housing Coalition research team reported these changes might be good for the program in the long term, even if they have not made a significant difference in the short term.

Clyburn gave Hutchinson a deadline of Tuesday to provide the House Select Subcommittee on the Coronavirus Crisis with information on how many staff members and contractors the rental assistance program has, how much federal money the state has dedicated to the program's administration and what actions the state has taken or could take to further reduce documentation requirements.

States are allowed to use a maximum of 10% of the federal rental assistance funds for program administration.

The Department of Human Services is "is conducting a thorough review" of the program to see if anything else can be adjusted, Sowers and department deputy director of communications Gavin Lesnick both said.

The U.S. Treasury Department is allowed to take back and reallocate some states' unused funds if they have not distributed 65% of their shares by Sept. 30. However, the department might not do so and has established Sept. 30 as a guideline instead of a hard deadline, a Treasury official told CBS News in August.

As of Friday, Pulaski County's rental assistance program has distributed more than $3 million of its $11.7 million in federal funds, county director of community services Fred Love said. The program should give out $1 million more on Sept. 10 in an effort to "ramp it up," Love said.

Benton County's $8.4 million should be fully distributed by the end of November, said Ali Johnson, marketing director for the Excellerate Foundation, which is administering the county's program.

Washington County split its $7.2 million into three programs -- one through the county, another through the Springdale Housing Authority and the third through the Fayetteville Housing Authority. Springdale had distributed $1.1 million of its $1.5 million as of Friday, housing authority director Mary James said.

Fayetteville's program is the only one in the state that did not require landlord participation. The housing authority has distributed all of its $1.5 million and sent some unspent administrative funds to the county's program, deputy director Victoria Dempsey said.

Sealy said the ongoing pandemic and the lifting of the federal eviction ban have made rental assistance more important than ever. He also said the state should do everything it can to remove "red tape" from the program.

"Every dime of this money will be spent in the local economy here in the state, and it will help people get back on their feet," Sealy said. "It's good for the local economy, and I don't know why the landlords are so stubborn, but they'll get their money, and they need that money. To have a burdensome application process, not having assisters to help people apply, having mountains of documents and not giving money directly to the tenants is a recipe for failure in Arkansas."