By Adam Pagnucco.
One of the less noticed stories of the budget is that the county council approved a lot of money for rental assistance. While rent hikes are far from the astronomical increases claimed by supporters of rent control, the county is a very costly place to live and the council recognizes that many people need help. Accordingly, Council Member Natali Fani-González sent out an explanation of rental assistance today that I am reprinting below.
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Friends–
In February, five of my colleagues and I unveiled our Tenant Assistance and Protection Package to comprehensively address the growing housing affordability crisis in Montgomery County.
The package has four related, yet distinct components, because we all know that there is no one silver bullet on housing. They are:
- Anti-Rent Gouging Legislation
- $30+ million in rental assistance
- $4.5 million in homeownership programs
- Non-Profit Preservation Fund, working towards $50 million
I am thrilled to share with you today that we have already exceeded our goals. Just last week, my colleagues and I approved over $48 million in rental assistance for next year. Making our funding commitment more sustainable, we also added $11-12 million in ongoing and dedicated funds (beginning after next year) for rental assistance as part of the recordation tax changes.
That is a $12 million increase from last year (33%) and $2.6 million (5.6%) more than the County Executive recommended. It is going to help a lot more families struggling to make ends meet.
The top line news is wonderful on its own, but if you will allow me, I am going to briefly jump into the deep end and attempt to explain what’s underneath that $48 million dollars. It’s a bit complicated, I admit, but I think you will appreciate the journey.
How do we allocate rental assistance dollars?
The above spreadsheet is a tally of the County’s Rental Assistance Program (RAP).
Let’s unpack this spreadsheet a bit.
The first thing to note is that the County Rental Assistance Program (RAP) is divided amongst three agencies: the Department of Housing and Community Affairs (DHCA), the Housing Opportunities Commission (HOC), and the Department of Health and Human Services (DHHS).
DHHS gets the lion’s share of the funding, followed by DHCA then HOC.
DHHS is the primary department responsible for administering rental assistance funds. They have a number of programs, but I’ll mention the largest ones here. First is the Rental Assistance Program, a longstanding shallow subsidy program, which offers rent subsidies up to a maximum of $503 per month for eligible low-income residents. The Council approved nearly $8 million for this program. The second is the Emergency Rental Assistance Program ($14 million), which was stood up with federal funds to assist tenants struggling with the impacts of the pandemic. Other noteworthy programs in DHHS are the Permanent Supportive Housing Program ($5.7 Million) for renters with disabilities and Rapid Rehousing Program ($3.3 million) for renters experiencing short term shocks.
The next largest department is DHCA. We programmed $2.7 million to fund the extension of soon-to-expire agreements between the County and private landlords to maintain rental affordability in the covered units. DHCA also administers a program to prevent evictions and utility shut offs ($445,000) for residents that have exhausted benefits available from DHHS and HOC.
Finally, we have the HOC portion. HOC administers a number of rental assistance programs funded by the County, the largest being the Rent Supplement Program. This program serves low-income residents (at or below 50% of Area Median Income) with up to $600/month in rental subsidy, paid directly to the landlord. There are 400 funded slots for the upcoming year.
Where does the money come from?
Now that we have a relatively good understanding of the expenditures, let’s take a look at the funding sources.
On the revenue side, the story begins with the Housing Initiative Fund, known colloquially as the HIF. The HIF, created in 1988, is a funding vehicle for the County to not only provide rental assistance but also to create, preserve, and acquire affordable multifamily housing projects. The HIF’s funding sources include a portion of recordation taxes, 25% of the proceeds of the sale of County land/property, repayments on loans, and most importantly, the County General Fund.
Of the total $48 million in rental assistance, nearly half of it comes from the HIF. The rest is coming from federal ARPA funds ($14 million) and the County General Fund.
If you are still with me, thank you! Addressing the housing affordability crisis was one of my top priorities in this budget cycle. This budget delivers big for renters in the most need, and I look forward to moving the other components of the tenant package this summer.
Sincerely,
Natali
P.S. A quick update on the three other portions of the Tenant Assistance and Protection Package.
- The Planning, Housing, Parks (PHP) Committee will be having a worksession on the Anti-Rent Gouging Legislation on June 15, 2023
- The Council approved the additional $4.5 million for home ownership programs
- The Council will be taking up the proposal to create a nonprofit preservation fund this summer