Why the White House loves the Texas renter rescue

In the race to dole out billions of dollars in federal rental aid, Texas has emerged as the Biden administration’s unexpected poster child for how to make sure money reaches struggling tenants, outpacing blue states such as New York that have stronger eviction protections.

Republican-led, landlord-friendly Texas has distributed more assistance funds from Washington’s $46.5 billion rental aid program than any other state, according to Treasury Department data through the end of July. It has disbursed at least $616 million — accounting for 47 percent of its initial batch of rent relief from Washington — with some major cities and counties distributing more than 90 percent of their own allocations.

In contrast, New York has been one of the slowest states when it comes to releasing the aid, which Congress first authorized in December. New York had distributed $2.7 million of its $801 million initial allocation as of the end of July — with only Wyoming and South Carolina having used less money. The situation is a growing political problem for New York Democratic officials. One of Gov. Kathy Hochul’s first big tasks since succeeding Andrew Cuomo has been to figure out how to fix the state’s lingering rental assistance bottlenecks before Sept. 30, when Treasury can begin clawing back unused funds.

“Texas is an example of how programs improve when administrators are willing to learn from and adapt to shortcomings in design and implementation,” said Diane Yentel, president and CEO of the National Low Income Housing Coalition. “To their credit, the program’s administrators recognized that the initial program design wasn’t working and used lessons from their mistakes to course-correct and improve.”

The extreme disparity in rental assistance delivery underscores the vast challenge the Biden administration faces as it pressures governors and mayors to strengthen protections for tenants after the Supreme Court blocked the nationwide eviction ban. Even Texas as of the end of July still had hundreds of millions of dollars that were unspent.

The White House has tried to showcase Texas as a rental aid success story, even as President Joe Biden clashes with the state’s Republican leaders over their moves to ease Covid-19 safeguards, impose new voting restrictions and enact a near-total abortion ban.

Administration officials in recent weeks have tried to highlight how Texas has used data and contracted with community nonprofits to reach tenants, while trying to encourage states such as New York to slash red tape and speed up the aid application process.

Aid distribution efforts have grown more urgent in the wake of the Supreme Court’s Aug. 26 decision to block the federal eviction ban.

While New York this week extended its ban through mid-January, evictions can proceed in most states, including Texas. About 3.5 million tenants around the country said they were “very” or “somewhat” likely to face eviction in the next two months in a U.S. Census Bureau survey taken at the beginning of August. Goldman Sachs economists estimate that tenants owe between $12 billion and $17 billion in back rent.

Housing advocates, affordable-housing providers and local housing officials point to several reasons for the gulf between Texas and New York, two of the most heavily populated states.

Texas Gov. Greg Abbott was able to distribute the funds without waiting for approval from the state legislature, for instance. New York, which required signoff from state lawmakers, began accepting rental assistance applications on June 1 — four months after Texas and other states had launched their programs.

Texas cities and counties have also established their own rental aid platforms while major localities in New York — including New York City — have deferred to the state.

The joint program run by Houston and surrounding Harris County has tried to target struggling renters by using data analysis to identify which neighborhoods should need aid but aren’t seeking it.

Housing advocates say that Texas officials have also been proactive about enlisting the help of property owners and affordable housing groups, securing widespread buy-in in the process.

“Initially when they cranked it up, there were some challenges,” said Chris Akbari, president of the Texas Affiliation of Affordable Housing Providers, who cited early technical glitches. “But they stayed engaged and they expanded the pool of technology vendors.”

Akbari’s company, Itex Property Management, is based in Texas but has properties in Louisiana, Arkansas and Colorado. He said there are differences when it comes to navigating the rental assistance process from state to state.

“It’s amazing to see how much more advanced Texas’ program is than in other states,” Akbari said. “It’s just been a very good, coordinated effort, so that everybody knows how and what to do, when to apply, how the process works. Other states, it’s just not as clear.”

The Treasury Department has highlighted San Antonio for contracting with a local health care collaborative that works with 20 nonprofit grassroots organizations. San Antonio had distributed 92 percent of its initial federal allocation by the end of July.

Edward Gonzales, assistant director of San Antonio’s Neighborhood & Housing Services Department, said, “We wanted folks to go to those pockets of the community that typically don’t apply for these government programs, similar to the pockets where people don’t get vaccinated.”

“The reality is that some tenants don’t trust the government,” said Melody Barr, deputy assistant director of public services for Houston. “So our nonprofit providers and our agencies that are on the ground are the ones who are spreading the message.”

Texas is not the only red or purple state to efficiently disburse rental aid.

Virginia had spent more than half of its initial allocation by the end of July, while Alaska had spent about a third. Some blue jurisdictions have also been efficient: the District of Columbia, for example, had spent just under half of its first round of funding, while Massachusetts had spent about a third.

New York’s rental assistance program was one of the slowest in the country to get off the ground. After a protracted debate, the state legislature approved it in an April budget bill. Treasury signed off in May, and the state began taking applications in June.

But it wasn’t just a slow start that created headaches. Housing organizers and advocates say key stakeholders were shut out of the process of designing the program and that it has been plagued by technical glitches.

“The lack of coordination meant that when they started the program, there were problems that I think property owners could have foreseen and encouraged them to change the program before it got started,” said Brendan Cheney, policy director at the New York Housing Conference, an affordable housing group. “Same thing with advocates and providers.”

The lag has infuriated policymakers in Washington. Thirteen House Democrats representing New York warned Hochul in an Aug. 28 letter of a “litany of problems regarding the rollout and execution” of the program.

One aide to a House Democrat said: “There was a lot going on in New York state at the time, with Gov. Cuomo — I don’t think his team was paying attention to it; they were trying to survive.”

“I worked very hard to get New York $2 billion to help tenants pay their rents when they lost their jobs,” Senate Majority Leader Chuck Schumer said at a press conference Wednesday. “But that money, New York didn’t distribute very well.”

The New York Office of Temporary and Disability Assistance said the state ramped up the delivery of rental aid in August and disbursed nearly $300 million. Michael Hein, commissioner of the department, told state lawmakers at an Aug. 19 hearing that when taking into account money that has been provisionally approved for households, New York has met the threshold to avoid having Treasury pull back funds. Treasury has not yet released data for August.

When asked about criticism of the aid rollout, department spokesperson Anthony Farmer said officials “continue to encourage all eligible renters and their landlords to apply for this program.”

Hochul has given critics of the program new hope. On her first day in office, she ordered a “rapid review” of the rental aid program’s workflow, reassigned contracted staff to work solely with landlords to complete pending applications and directed the state to invest an additional $1 million in marketing and outreach efforts.

“There were all these problems with the program before, and I think we’re more optimistic now about how it’s going to proceed,” Cheney said. “We’re optimistic because it’s a major priority of the new governor.”