Families in Puerto Rico have been in confinement and under curfew for over two months to mitigate the effects of the COVID-19 pandemic, revealing that housing has become critical public health infrastructure. Therefore, securing housing and shelter for all as we overcome the current crisis is of utmost importance.
Why is the implementation of a rental assistance program during the pandemic necessary?
Low-income tenants make up one of the sectors most at risk of losing their homes or experiencing displacement. In Puerto Rico, about a third of families live in rented housing and more than half spend 30% or more of their income on rent payments. In other words, a rental affordability crisis existed even before shelter-in-place measures were put in place at the start of the pandemic. On top of that, the lockdown has affected many families’ earnings during the past two months rendering many of them unable to meet their rent obligations. This creates significant ripple effects as many landlords cannot pay their mortgages, loans, and other financial obligations when they do not receive the rent payments, leaving banks with reduced liquidity towards their creditors. That is why at the Center for a New Economy (CNE) we have developed a specific proposal to address this issue, in collaboration with Habitat for Humanity Puerto Rico, and have joined other voices that are demanding that a rental assistance program be implemented.
What should an emergency rental assistance program consider?
Any rental assistance program must provide the necessary assistance on an expedited basis. For this reason, careful thought needs to be put into how such a program will be designed and implemented. An overly bureaucratic structure or a program created “from scratch” can fail to assist tenants with the necessary urgency. An example of such a situation is the slow and erratic disbursement of the CARES Act economic stimulus checks in Puerto Rico.
An emergency rental assistance program should also be aimed at benefiting those families that need it the most. Therefore, implementing clear mechanisms that allow to distinguish between those households that need assistance from those that do not is imperative. The best way to ensure that a rental assistance program reaches the most vulnerable tenants quickly is by using an existing structure.
Other programs under the Federal Department of Housing and Urban Development (HUD) may come up short if used to fund a rental assistance program–even though they already have appropriated funds–as they were not designed to provide subsidies to renters. This makes it unlikely that income verification protocols are established, personnel assigned and trained, and disbursement mechanisms designed quickly. Not to mention that the funds available in such programs are far from meeting the needs of low-income tenants. However, these programs do have an essential role in meeting other housing needs, such as purchasing vacant units for affordable housing or establishing shelters and service centers for the homeless.
Our proposal for an emergency rental assistance program during the pandemic
There is a consensus among several experts and activists in the United States that the best way to implement a rental assistance program during the pandemic is through a temporary expansion of the Housing Choice Voucher Program. This program, known as Section 8 vouchers, is a rental housing grant administered by HUD. The program provides vouchers for low-income families (those who earn less than 50% of the area median income, or AMI) to access rentals in the open market. Under program rules, qualifying households pay up to 30% of their monthly income, and the rest is covered by the federal government.
We estimated conservatively how much it would take to expand the Section 8 voucher program to meet the needs of low-income tenants during the pandemic. According to our calculations, almost 74,000 tenant households in Puerto Rico have incomes below 50% of the AMI and would be eligible to receive a Section 8 voucher, but do not currently receive it. Using HUD data on subsidized housing, we identified that the tenant assistance gap amounts to $37.9 million per month or about $455 million per year.
The temporary expansion of this program would require relaxing some requirements, such as the employment and unit inspection requirements.
Is there room for this proposal in Washington, D.C.?
The rental crisis is not limited to Puerto Rico; it impacts the entire United States as well. This has prompted the United States House of Representatives to include more than $100 billion in rental assistance programs in the recently passed HEROES bill. Furthermore, organizations and institutes that advocate for housing issues are aggressively pushing for this type of measure.
It is an opportunity that should not be wasted. Otherwise we can miss the boat leaving tens of thousands of tenants in Puerto Rico homeless.
This column was originally published in Spanish in El Nuevo Día on May 24, 2020.