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Rollout of Minnesota’s rental assistance program beset by glitches, slow payments

State Housing Commissioner Jennifer Ho said Thursday there are 18,000 pending applications, and predicted that half a million dollars in payments will be sent out this week. 

There are now 18,000 pending applications for the the hundreds of millions of dollars sent to Minnesota by the federal government to cover the debts of Minnesotans who’ve fallen behind in their rent.
There are now 18,000 pending applications for the hundreds of millions of dollars sent to Minnesota by the federal government to cover the debts of Minnesotans who’ve fallen behind in their rent.
MinnPost photo by Peter Callaghan

Advocates for both tenants and landlords in Minnesota want a smooth transition back to a pre-pandemic rental market — a process that’s come to be referred to as an “off-ramp” to the state’s eviction moratorium. 

And the hundreds of millions of dollars sent to Minnesota by the federal government — first under the COVID Relief Act and then via the American Rescue Plan — is more than enough to cover the debts of Minnesotans who’ve fallen behind in their rent because of the economic fallout from the pandemic. 

That is, at least, if the funds can get to landlords, many of whom owe money themselves to bankers, utilities, tax collectors and their own employees. 

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But while the state department in charge of those payments, Minnesota Housing Finance Agency, says the money is starting to flow, the pace remains slow: The head of the state’s largest apartment-owners association said Thursday that his own survey of members found not a single check had arrived yet. 

And though some of the system glitches reported to be affecting Minnesota’s online application system seem to be easing, the software vendor hired by the state to build the program has experienced problems in other states — with at least one state discontinuing its contract with the company.

Housing Finance Agency commissioner: ‘We knew … there would be some glitches’

State Housing Commissioner Jennifer Ho said Thursday she thinks Minnesota’s rental assistance program is on track. There are now 18,000 pending applications, and she is predicted that half a million dollars in payments will be mailed or direct-deposited this week. 

Commissioner Jennifer Ho
Commissioner Jennifer Ho
And though Ho acknowledged that there have been some problems with the state’s application system, she said they were a result of prioritizing speed over performance. “We knew when we launched on April 20th there would be some glitches because we were in testing mode for four days, and usually with a program of this magnitude you would test it for two to four months,” Ho said.

The application system, RentHelpMN, is a one-stop portal where those who have fallen behind on rent because of the impacts of the pandemic, or are in danger of doing so, can begin the process of applying for assistance — without having to figure out which state, county or city government entity will be processing it. (Renters can also apply by calling the Greater Twin Cities United Way’s 211 Resource Helpline: 1-800-543-7709 or 651-291-0211.)

According to data collected for a dashboard created by PolicyLink, a national racial and economic equity policy organization based in Oakland, California, an estimated 53,000 Minnesota households owe nearly $156 million in back rent. The average debt is $2,900. 

Senate Housing Committee Chair Rich Draheim, R-Madison Lake, said this week he is concerned about the pace of payments under RentHelpMN. He said he received an email from the Housing Finance Agency that checks had started to flow, but they were numbers in the dozens.

“That’s more concerning than an eviction off-ramp, that program, because we have the money, we have the resources,” Draheim said. “If we don’t get help to people, they’re going to be permanently affected.”

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All together, the state could have $672 million for rental assistance, with additional funds being available for past due utility bills and mortgage payments. The state used $100 million of its allotment from 2020’s CARES Act for a rental and mortgage assistance program, which spent the money between August and December of last year.

The new program can pay a total of 15 months of rent for financially eligible renters, going back to the beginning of the pandemic in April of 2020. It can also pay three months in future rent for those who qualify.

Other states have problem with vendor

The software vendor hired by the Housing Finance Agency to build RentHelpMN, Allita 360, has had trouble rolling out programs in other states. Last month, Rhode Island replaced the vendor after its housing agency termed the arrangement “unsuccessful.”

“Staff has experienced significant and continuous obstacles with the technology platform, and concluded that the program will not meet the level of the agency’s need,” stated a report to that state’s housing agency board. “Staff has determined that to continue with Allita would be infeasible and could jeopardize the success of the RentReliefRI program.”

Allita is also the vendor for Oregon’s state assistance program, which has also faced delays in moving money to landlords

Other states using other software vendors, however,  also have had slow rollouts of rent help programs. Texas officials, for example, faced legislative scrutiny after checks trickled out in the first months

Allita, based in Columbus, Ohio, is currently working with six other states besides Minnesota. Brian Greenwood, whose Greenwood 360 owns Allita 360, said he considers Minnesota’s rollout to be one of the smoother ones he’s worked on. “I think Minnesota will be looked at as a more successful rollout,” Greenwood said before ending a phone call and referring questions to HFA. 

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Ho said Minnesota has had no significant problems with Allita 360. “That’s what matters,” she said. “It is working for us and we are not getting rid of them and we have all worked really hard to make a program that we want to use and reflects Minnesota values.” A different vendor handles the checking of financial records, something done by as many as 140 workers. A test batch of payments was sent out this week, and Ho said she expects the flow of payments to ramp up. 

Cecil Smith, a landlord who is also the executive director of the Minnesota Multi Housing Association, which represents apartment owners and managers, said the amount of money available for rental assistance money is enough to more than take care of those who were financially harmed by the pandemic and who need cash to cover back rent. Yet his members have complained of balky application programs that left many applications watching “the notorious spinning wheel” for hours, even days.

“There are 672 million reasons why we don’t have to be so concerned about people who are COVID impacted and eligible for rental assistance — other than we don’t have a functional rental assistance program,” said Smith. “Hopefully we get there eventually.”