Lexington KY places restrictions on rental assistance funding

Soon, only Fayette County renters with eviction cases in court will be allowed to apply for rent assistance, a move intended to make the city’s remaining federal rent aid money last through the summer.

The city spent $41 million in federal funds to pay the back rent for the 6,000 families and 1,100 renters since 2020when the coronavirus pandemic began.

thanks for the $15.8 million from the state, The city still has some money left.

But to make that money go further, the city plans to tighten up parts of this program so that the money goes to people who are in immediate danger of eviction.

Currently, renters can apply for funds as soon as they receive notice that their rent is late, said Jonathan Wright, who helps oversee the city’s housing stabilization program.

Also, the city will no longer use the money to help pay for utilities that are past due. There are other programs that can help people with utility payments, said Charlie Lanter, the housing and social services advocacy commissioner.

Lexington, Louisville and the state have received federal coronavirus relief funds to help keep people sheltered during the pandemic. But this money has been used up. The state stopped accepting applications for the Rent Assistance Program last week.

Louisville still has $38 million in prevention of eviction funding but has yet to put in place a program to manage its remaining funds. Newly elected Louisville Mayor Craig Greenberg said he hopes to announce a plan in the coming weeks. The state had been running the Jefferson County program but it stopped in late December.

“We didn’t want to just fall off a cliff,” Lanter said of why the city narrowed the program down. The program spends 2 million dollars a month. If the city does not make changes, the money will be depleted by April.

“We’ve been worrying for a long time about what will happen when that money runs out,” said Lanter. The program was set up to keep people at home during the height of the coronavirus pandemic when job losses were high and people were largely staying at home.

With the changes, Lanter said, the funds will continue into the summer or late fall, as needed.

Housing advocates said the program needed to be scaled back so there was no dramatic cut in services when the money ran out.

Art Crosby, CEO of Lexington Fair Housing, a housing group that first sounded the alarm about a looming eviction crisis in 2020, said he hopes the city will create a sustainable program that helps renters stay in housing.

“I think it’s important for the city to transition to a sustainable eviction prevention program,” Crosby said. I think this probably entails cutting spending and creating priorities. We hope the city will take advantage of the lessons learned from the past few years, and use this information to create more efficient models for keeping families in and settling down.”

Transfer money to legal representation

In addition to restricting eligibility, the city will also use $1.25 million to create and expand a pilot program that will use attorneys to represent tenants in eviction court. The vast majority of tenants do not have lawyers, but landlords usually appear in court.

A pilot program that began this fall in Fayette County Courthouse Denotra County Court Judge Gunther has proven successful, Wright said.

“They were able to mediate and come up with a solution without that tenant having the eviction recorded on their record,” Wright said.

Lanter and Wright hope that by using mediation rather than direct rent payments, more people can avoid eviction. Paying for mediation or attorneys is also more cost effective and sustainable than direct lease payments.

Lanter said there may be grant funds available to pay attorneys’ fees for tenants once federal funds run out.

By going to mediation, the tenant and landlord can often reach a solution without the tenant ever having a clearing on their credit history. Other cities, including Brooklyn, New York, have used eviction court lawyers, Wright said, and have seen their evictions drop dramatically.

Tenants who have experienced previous evictions are struggling to find housing again. Evictions from public housing, Wright said, are a worse sign of a tenant’s credit report. These tenants are often forced into unsafe housing.

He said public housing tenants facing eviction would be given priority under the new rules.

Other priorities

The city hopes to get an offer later this month to hire an agency that can provide legal services and mediation. In addition, the software will also be able to help people with the application fee. Some apartments have an application fee of $50 per adult in the household to cover criminal background and credit checks. Lanter said that can be prohibitively expensive for people who struggle to pay rent.

“We found that no (other agency) would cover or pay this application fee,” Lanter said.

A group of tenants pushed the city into hiring More attorneys and mediators in eviction court As part of a sweeping legislative proposal, it was called the Tenants’ Rights Act.

The Lexington-Fayette Urban Council is expected to hear the motion on Tuesday. If the council approves the new guidelines, Lanter said, the public submission portal for rental assistance will be taken down later this week.

“Anyone who has a pending application will still be processed,” Lanter said.

The program paid an average of $6,600 per client, according to city records.

This story was originally published Jan 23, 2023 12:51 PM.

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Beth Musgrave has covered government and politics for the Herald-Leader for over a decade. She is a graduate of Northwestern University and has reported in Kentucky, Indiana, Mississippi, Illinois, and Washington, DC.

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