Louisiana Rental Assistance Program Suspended After 40,000 People Apply

Jul 20, 2020

A surge of applicants forced Louisiana to suspend its emergency rental assistance program Sunday, just four days after Gov. John Bel Edwards and state officials launched the effort to stave off a looming eviction crisis brought on by the coronavirus.

Program administrators say 40,000 struggling tenants started applications for rental assistance between Thursday afternoon and Sunday morning — more than four times as many as the program could assist at its current funding level.

“There is more need than we can address with the limited dollars that we have,” said Keith Cunningham, executive director of the Louisiana Housing Corporation, one of the agencies administering the program. “We estimate that to serve the program that we’ve developed now, we’ll need an additional $100 million.”

Cunningham said LHC does not have an official estimate of the number of renters at risk of losing their homes during the pandemic, but said the swift and overwhelming response to a program that was narrowly targeted at 7,500 to 10,000 people at “very low income levels” does not bode well.

“We haven’t run the numbers to extrapolate what that would mean for the statewide population, but those numbers are staggering,” Cunningham said.

The state has allocated $24 million from various federal funding sources to the program, but has only $7 million on hand now. Cunningham said that he expects the additional $17 million — $5 million in Community Development Block Grants and $12 million in CARES Act Emergency Solutions Grants — to arrive within 30 days.

But even with those funds, Cunningham said, the program would fall far short of serving the people eligible for this limited assistance program.

The program is available to renters who are not currently receiving federal housing assistance and who make 30 percent or less of the state’s median income — or between $13,500 and $25,450, depending on household size.

Assistance will be paid directly to landlords on behalf of individual tenants. Aid can be applied retroactively for tenants who may already be facing eviction proceedings by covering up to three months of missed rent payments, or prospectively, guaranteeing a vulnerable tenant three months of secure housing.

Gov. John Bel Edwards halted all eviction proceedings when he imposed his statewide stay-at-home order in late March.

He lifted the moratorium June 1, after the state entered Phase 2 of reopening, but before many struggling renters could get back on their feet.

“The response to our state’s emergency rental assistance program proves how significant the economic burden of COVID-19 is for our citizens,” Edwards said in a statement Sunday.

The Louisiana economy, which relies heavily on the tourism and hospitality industries, was hit particularly hard by the coronavirus, adding to unemployment, exacerbating an existing housing crisis, and compounding the negative effects of the COVID-19 on vulnerable communities.

Cunningham explained that individuals experiencing “rent stress,” spending more than 30 percent of their income on housing, are less likely to invest properly in health care or have enough money saved to weather job loss.

The expiration of the $600 per-week federal unemployment payment at the end of the month would force unemployed Louisianans to survive on one the lowest weekly unemployment benefits in the country — an average of $216.

Edwards said the state will actively pursue additional funding sources for rental assistance, and Cunningham said he is hopeful that Congress will pass additional coronavirus relief legislation that will free up the money his agency needs.

In the meantime, he urged qualified individuals who were unable to apply to sign up to get notified when more funds are available.