Public funding for low-income renters doubled during the pandemic. The question is: What happens next?
By Peter Ciurczak and Luc Schuster
February 16, 2022
In the first year of the COVID-19 pandemic, much was written about the potential disaster ahead for lower-income renters. The threat was all too real. With the closure of non-essential, in-person businesses, lower-wage service workers, disproportionately Black and Latino, were much more likely to lose their jobs. Service workers who weren’t laid off were often in frontline jobs that couldn’t be conducted remotely, forced to balance work and the risk of infection for themselves and their families.
But while the threat was emphasized, far less coverage has focused on the unprecedented state and federal policy response, which was far larger and far more progressive than the policy response to the Great Recession. This was especially true in the United States, which had among the very largest fiscal responses of any developed nation in the world. Not only did the federal government respond at scale, so did Massachusetts, with the state spending hundreds of millions of local dollars to help many of the most vulnerable families make ends meet. All of this should be Exhibit A for advocates who want to build broader support for government action that counteracts the inequality-enhancing features of economic recessions, and of market capitalism more broadly.
Unprecedented new public funding has helped keep lower-income families in their homes.
In this brief we focus on one dimension of the policy response—housing—quantifying total state and local spending on low-income housing supports over the past two years and comparing this to pre-pandemic levels. So, let’s start by looking at spending on a core cluster of low-income renter support programs that flow through the state budget in Massachusetts, as shown in the graph below. All told these programs roughly doubled in size between Fiscal Year (FY) 2020 and FY 2021, up from $235 million to $471 million.
This analysis leaves out the Section 8 Housing Choice voucher program because it is a federal program not run through the state budget. But it’s worth flagging that Section 8 disbursements also increased during the pandemic, helping many low-income residents remain in their homes. Section 8 funding for families in Massachusetts rose from $1.09 billion in Fiscal Year 2020 to $1.25 billion in Fiscal Year 2021.
To construct this analysis, we relied heavily on data from MassBudget’s online Budget Browser and their paper Piecemeal Progress: An Exploration of Massachusetts Housing Investments in combination with data on three federal programs obtained via the state’s Eviction Diversion Initiative (EDI) dashboard. For the state, most of this funding (94 percent in FY 2020) flows through one of four programs:
- The Massachusetts Rental Voucher Program (MRVP), which provides housing support through two channels: 1) vouchers that go directly to tenants for them to use to pay the rent in private units on the open market; and 2) project-based vouchers, tied to specific subsidized housing units. Both of these voucher types cover a large share of rental costs and help residents maintain their tenancy, so long as they continue to meet the program qualifications.
- Subsidies for Public Housing Authorities, which helps fill the financial gaps at local public housing authorities. Funds can also be used for upkeep of properties, utilities and operations.
- Residential Assistance for Families in Transition (RAFT), which is a housing crisis response program for low-income renters or homeowners earning up to 50 percent of area median income (or 60 percent for victims of domestic violence). If families are at risk of eviction or facing some other housing crisis, RAFT funds can be used to pay arrears, utilities, moving expenses or rent until the crisis is passed. If resolving the crisis at the family’s current location is impossible, RAFT helps families move with security deposits, first and last month’s rent, and so on.
- HomeBASE, which provides families at or below 115 percent of the federal poverty level, or those already homeless, with the funds necessary to help them maintain their residency or leave the shelter system and find a home. HomeBASE funds can be used for many of the same purposes as RAFT funds.
Of these programs, RAFT saw the greatest increase in funding during the pandemic, increasing from $16 million to $97 million between FY 2020 and FY 2021 (a 479 percent increase). The amount of money available through RAFT increased from $4,000 per 12 months pre-pandemic to $10,000 during FY 2021. This increased funding came alongside expansions in eligibility, shifting RAFT from a narrowly-focused homelessness prevention program to one that broadly targets households experiencing all manner of crises (within certain income constraints). To ensure these new supports were distributed quickly, the Department of Housing and Community Development dropped many application and supporting document requirements, in some cases instead relying on administrative data from other state agencies and applicant statements attesting to the pandemic’s impact on their lives.
Other programs saw smaller increases, and none saw budgeted decreases. Interestingly however, while HomeBASE saw a budgeted increase in FY 2021, actual expenditures were just 40 percent of what was budgeted. Because of newly available funds and simpler application requirements, it seems that many households actually experienced greater housing stability during this period, thereby reducing the number of families on the brink of homelessness.
In addition to new funds flowing through existing Massachusetts programs, federal recovery dollars were used to create several new rental support programs designed explicitly to help households through the pandemic. These are administered by the same regional housing centers that run the state’s programs but can come with higher benefits and longer-term relief. As such, most of the households receiving COVID-19 related rental or homeowner supports are now served by one of three programs (see graph below):
- Emergency Rental and Mortgage Assistance (ERMA), which targets rental and mortgage assistance to households impacted by COVID-19 and making 50–80 percent of area median income, who are thus largely unable to access RAFT support. It’s worth noting that this program ended in December of 2021, though some households who received ERMA funds may be eligible for the Homeowners Assistance Fund (HAF). That program began accepting applications at the end of December and is not included in this analysis.
- The Emergency Rental Assistance Program (ERAP) works alongside the state’s RAFT and ERMA programs and provides additional relief to renter households earning up to 80 percent of area median income. Funds from ERAP can be used to directly pay past due rent, utilities, and up to three months of future rent, so long as they attest to COVID-19’s impact on their finances. Aside from utility expenditures, ERAP does not have a household financial cap.
- Finally, the Subsidized Housing Emergency Rental Assistance (SHERA) program allows local housing authorities and affordable housing properties to apply for rental assistance on behalf of their tenants impacted by the pandemic.
These federal programs contributed an additional $86 million in housing supports through FY 2021, making up more than 18 percent of funds disbursed that year. In FY 2022 this increased further, and federal funds now make up 41 percent of all disbursed housing supports.
In October, the state ended its eviction moratorium and shifted its focus toward ensuring that newly funded rental and housing supports could be distributed quickly and efficiently. Consolidating applications for RAFT, ERMA and ERAP helped this along, while hiring at regional housing centers increased the speed at which applications were processed. These efforts precipitated a dramatic increase in the number of households served by state and federal programs. The graph below, reproduced from the state’s EDI dashboard, highlights these increases.
At the beginning of the pandemic RAFT served as the state’s primary emergency household support because federal rental supports had not yet come online. RAFT ramped up to reach more than 8,000 households by March 2021, as shown in the graph below. After ERAP came online, however, the number of RAFT-supported households declined, and were down to just under 1,800 as of November 2021. By May, ERAP was supporting more households than RAFT, reflecting both the higher income eligibility cap (at 80 percent AMI) and the state’s pivot toward using these resources first1.
Despite large funding increases, real challenges remain.
Thus far, this brief has painted a largely positive picture of the state and federal policy response to potential housing instability. This is not to say there have not been real challenges. During this period of higher funding, for instance, disbursement has not always been smooth with far too many eligible families not receiving support in a timely manner. Ramping up these programs quickly has been no easy task, and with the state relying largely on local administering agencies to consider applications for rental support, the quality of final distribution largely hinged upon local capacity—leading to unevenness across the system. A recent analysis by the Center for Housing Data at the Massachusetts Housing Partnership found a big range in the disbursement of rental relief across Massachusetts cities and towns. Municipalities like Springfield, Holyoke, Lawrence and Chelsea, which distributed more rental relief per 1,000 renter households, have tended to see many fewer eviction filings during the pandemic. By contrast, places like Fall River, New Bedford and Framingham distributed much less rental relief and consequently have seen many more eviction filings.
Additionally, much of this increased funding has been designed as temporary and money is already starting to slowly phase out. In fact, the phase-out is beginning just as reported anxiety about housing instability ticks up again. The graph below looks at the share of adults behind in rent who report that they are “somewhat likely” or “very likely” at risk of eviction or foreclosure. Up until December, Massachusetts saw a decline in the number of adults fearing eviction or foreclosure, with the state rate trending below the national rate for most of the pandemic.
Unfortunately, fears of eviction and foreclosure have once again increased. In November, a Massachusetts court struck down Boston’s eviction moratorium. Meanwhile, Massachusetts has moved ahead with a plan to limit eligibility and resource disbursement for ERAP and RAFT beginning this month. To preserve funds, ERAP will begin restricting easy extensions, though households may reapply to the program once they fall behind on rent. In addition, RAFT will no longer be available to homeowners, and will limit support to $7,000 over 12 months. Finally, ERMA will be discontinued, though eligible homeowners may be able to receive HAF assistance. State policymakers recognize the challenge moving forward, with Governor Baker, for instance, proposing some state increases to RAFT and MRVP funding in his FY 2023 budget proposal. But absent new federal support, his spending proposal would leave total state and federal spending on these programs for FY 2023 well below their current FY 2022 levels.
The massive spike in service sector layoffs at the beginning of the pandemic led to grave concerns about a coming wave of evictions, one that might even surpass housing-related hardship experienced during the Great Recession. But this wave never came and, in fact, eviction filings two years into the pandemic remain below pre-pandemic levels. While housing has never been treated as a basic right in this country, we moved closer to such an approach when confronted with this unique crisis. But eviction moratoriums have largely ended, and many other responsive rental supports were designed to be temporary. In fact, they’ve already started ramping down. This leaves policymakers at an important inflection point. Will they allow these housing support programs to phase out and bring us back to pre-pandemic levels of housing instability? Or will they build on the success of these programs to lock in a greater level of public support for low-income housing programs going forward?