NEW JERSEY

NJ counties, cities gave out only 25% of COVID rental aid, putting remainder at risk

Ashley Balcerzak
NorthJersey.com

New Jersey cities and counties have distributed less than a fourth of an initial round of federal rental assistance funds to landlords, leaving the leftover money at risk to be forfeited, according to the latest U.S. Treasury Department report released Monday.

More than a dozen counties and cities passed out a combined $52.5 million through the end of September out of a $235 million pot allocated under a multi-trillion dollar spending bill that Congress passed in December. 

"When you have counties that never had to set up a rental assistance program and have to start from scratch, there were bound to be delays," said David Brogan, executive director of the New Jersey Apartment Association, which represents landlords in the Garden State. "But every month that goes by that a landlord doesn't get paid, is a month that (the amount owed) is growing bigger."

The Treasury Department required local and state governments to spend at least 65% of their so-called Emergency Rental Assistance 1 funds by Sept. 30. If they didn't meet that goal, agencies must submit an "improvement plan" or the federal government will reclaim the funds to redistribute elsewhere in mid-November. Treasury said it would prioritize giving the collected funds to agencies in the same state, but could also pass out the money to other states' programs. 

Landlords in New Jersey are owed an estimated $1 billion to $3 billion worth of rent because hundreds of thousands of tenants lost their jobs or income during the coronavirus pandemic, but were protected against eviction for a year and a half under a state moratorium. 

Low-income tenants cannot be kicked out of their homes through the end of the year, and tenants making under 120% of their county's median income who missed rent between March 2020 and August 2021 can have their eviction cases dismissed if they fill out a form attesting their income and apply for rental assistance. 

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Despite a push to spur more tenants to apply for aid, 13 New Jersey counties and cities reported passing out less than a third of their funds as of Sept. 30. They include:

  • Mercer County: 28%
  • Atlantic County: 21%
  • Gloucester County: 20%
  • Middlesex County: 16%
  • Newark: 15%
  • Passaic County: 13%
  • Essex County: 11%
  • Monmouth County: 11%
  • Jersey City: 10%
  • Ocean County: 8%
  • Bergen County: 7%
  • Camden and Union counties did not report spending any funds to the U.S. Treasury.

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'Proactive rather than reactive'

In contrast to localities, the state Department of Community Affairs doled out all of its first tranche of $353 million, bumping up New Jersey's average. The Garden State is ranked fifth in getting the largest percent of first round aid out the door, trailing only Washington, D.C., Illinois, Virginia and California.   

To be sure, the state has not run out of money to help renters and landlords: It's now making its way through a $272 million fund under the American Rescue Plan and a $500 million "Eviction Protection Program" state fund. 

Burlington and Morris counties passed out 100% and 92% of their balances, respectively. The two counties contracted with the DCA to help distribute their funds through its application at https://njdca.onlinepha.com/ so they wouldn't need to spend time building up their own application infrastructure. 

DCA spokesperson Lisa Ryan said the agency has been in contact with other counties and "expressed that we would be happy to administer their funds."

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Hudson County expects to shortly pass out all of its funds and is already collecting applications for a second round of money under the American Rescue Plan. The county, which handles every municipality except for Jersey City — which has its own program — processed 831 applications and is working through more than 900 additional filings. 

Hudson County sent out letters to every landlord and tenant with an eviction filing telling renters to apply for the grants, placed staff outside Union City's city hall with tablets to help people fill out applications, and assigned 60 employees to help with education and to approve and distribute funds. They mailed flyers to school boards, churches, supermarkets, schools, universities, pharmacies, and to applicants who applied for help through a previous program. 

"It's going to the community, being proactive rather than reactive and hoping people find out about it," said Frank Mazza, the director of the Hudson County Department of Housing and Community Reintegration. 

Because part of Mazza's department includes welfare, the agency also has access to data on wages, unemployment and disability information, so his team can verify income internally without having to wait for landlords and tenants to provide additional documentation in some cases. 

"The biggest hiccup on collecting information is the landlord's tax information," Mazza said. "Sometimes they're a little skittish giving the government tax information, particularly if it's an income-generating property that they've had for years but they haven't paid taxes on. It's just time consuming."

Hudson worked closely with a network of nonprofits, set up a low-barrier simple application months before they knew how much money they would receive, and allowed case workers to help people fill out applications over the phone, said Rebecca Symes, executive director of the Waterfront Project, a Jersey City-based nonprofit that provides legal services to low income families. 

In contrast, Jersey City reported spending $715,000 of the $7.8 million the Hudson County city received from the federal government. 

Jersey City originally required renters to live in the same building as their landlords and for the building to have fewer than five units to be eligible. The city denied 800 applications for funding out of 900 they processed, according to a report from HuffPost. As of Sept. 9, the city approved 45 applications for $450,000. 

Jersey City reopened its application in October, expanding eligibility to all households making 80% of the area median income, regardless if they lived in an owner-occupied building. 

"From the start, we were very clear that we opened the program to owner-occupied residents, and after those two weeks, we would expand to include slightly larger buildings and then again for even larger buildings," said city spokesperson Kimberly Wallace-Scalcione. “A phased approach has allowed us to best manage the caseload and prevents the much-needed funding from being quickly swallowed up by larger property investors and developers, defeating the purpose of helping our neediest residents and landlords."

Wallace-Scalcione said the Jersey City Housing Authority "has been working with Treasury to ensure all funds are utilized and thoughtfully allocated."

Camden County encountered technical issues reporting its information to the federal government. Although Treasury's report shows Camden didn't pass out anything, the county approved 473 applications for close to $2.9 million and is in the process of approving $7.5 million more, said spokesperson Dan Keashen.

Camden County spent 21% of its funds, but if it makes its way through the 1,280 complete applications it has in hand, the county would surpass the required threshold.

Gloucester County spent close to 28% of its money through the end of October and may have to turn over millions to Treasury. Robert Damminger, director of the Board of Commissioners, said the federal government may take into account that Gloucester has ramped up its spending the past few months. 

Gloucester's program has been in "direct competition" with the DCA program, Damminger said, and the county has also faced landlord resistance. Gloucester plans to team up with more community-based organizations to get the word out, and rely on self-attestations in place of more strenuous documents. 

Bergen County trained internal staff to start processing applications in October"to speed up the approval" after initially hiring EY to do the processing, said spokesperson Derek Sands. 

While Bergen has handed out $1.8 million to landlords, it is in the process of preparing to pay $8.5 million to homeowners with complete applications that require a final step of filling out an award letter. 

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Ashley Balcerzak is a reporter covering affordable housing and its intersection of how we live in New Jersey. For unlimited access to her work, please subscribe or activate your digital account today.

Email: balcerzaka@northjersey.com 

Twitter: @abalcerzak