(The Center Square) — Nearly $1.02 billion in emergency rental assistance was spent in Round 2 of Illinois’ Rent Payment Program to alleviate COVID-19. But many landlords stayed without much recourse or help.
“The goals of the program were worthy,” said Paul Arena, director of legislative affairs for the Illinois Rental Property Owners Association. “There was an unprecedented crisis.”
The problem for IRPOA is that thousands of landlords end up with no rent reduction.
The Illinois Housing Development Authority announced that out of more than 64,000 applications, about 27,000 were approved for the second round of the state-funded program. The average level of support was almost $7,500. Approximately 3,100 direct payments totaling $25 million were approved by applicants who did not have a responding landlord, an increase of $15 million from the first round of the program for renters without a responding landlord.
At the same time, Illinois prevented landlords from evicting non-paying tenants for more than a year.
“The dollar amount of rental assistance provided is huge, but it didn’t cover all of the losses for housing providers,” Arena told The Center Square. “It shows the extent of the damage done by this policy.”
He said landlords should have had the ability to go to court and have a judge decide if a tenant had a COVID-related hardship. Instead, the landlords remained without recourse.
In 2020 and 2021, thousands of Illinois households experienced severe health impacts, including the deaths of breadwinners and devastating economic losses as businesses closed due to the government’s response to the COVID-19 pandemic. The state used federal tax funds to provide rent subsidies.
After reviewing applications to ensure support was only going to people suffering COVID-related hardships, the IHDA approved 27,279 applications.
Therein lies the problem, Arena said. He asks what happened to the landlords of the 37,163 tenants whose applications were rejected by the government’s aid program. Arena believes many of them were stuck with non-paying tenants that they were forbidden by law to evict.
“There are still significant losses from tenants who have not cooperated with the program to have rent payments approved,” Arena said.
As the moratorium on evictions lasted 15 months, many landlords suffered thousands of dollars in losses. Arena believes hundreds — maybe even thousands — have been unable to keep up with their mortgage payments.
“These landlords need to be made sane,” Arena said.
Arena owns 62 rental units in Rockford. He is proud of the diversity of his tenants. He also prides himself on the thorough credit check he performs before giving a lease to a new tenant. During COVID, five of its tenants applied for and received a multi-month rent subsidy. One tenant had her rent paid by IHDA during both phases of the Illinois Emergency Relief COVID Rent Relief Period, he said.
Other members of the Illinois Rental Property Owners Association did not fare as well. Some of their tenants have failed to file and provide the required paperwork to qualify for assistance. Some applied for relief and were unable to show IHDA examiners that they had experienced COVID hardships that met state criteria.
Most Illinois rental companies don’t belong to advocacy groups like the Illinois Rental Property Owners Association, Arena said. There are many large landowners in Illinois who own fewer than five properties, he said, and it’s unclear how they’ve fared during the moratorium on evictions. Illinois’ ban on evictions went into effect in spring 2020. It ended in October 2021.
Arena argued that Springfield policymakers treated landlords like bad actors.
“Most people who provide housing are not greedy people who lack compassion and take advantage of people,” Arena said. “They legislate on a case-by-case basis and apply restrictions broadly across the market. That causes damage.”
Everyone in Illinois would benefit if the state could figure out how to address the rental housing shortage, Arena said.
“One of the things that would encourage people to provide more housing would be if the government wasn’t so tough on housing providers.”