The largest pot of rental assistance ever provided to Michigan tenants is about to run out. The COVID Emergency Rental Assistance (CERA) program will stop taking new applications on July 31 and already has stopped providing future rent for people already in the program. Its funds will likely be depleted by the end of September, according to the Michigan State Housing Development Authority (MSHDA).
When it’s all over, MSHDA will have distributed an unprecedented $1.1 billion dollars to about 150,000 tenants statewide who experienced financial hardship during the pandemic.
We’ve been reporting on CERA since it launched in March 2021 and have learned a lot about what it takes to manage a vast program that also requires a quick response. In many ways, the program accomplished its goals — evictions plummeted during the pandemic (a federal eviction moratorium, which lasted until August 2021, also contributed greatly to the decrease).
But in other ways, it fell short. And if there’s another crisis of this magnitude in the future, the state needs to be prepared. Here are the most important takeaways from our coverage of the CERA program.
CERA didn’t work as well for the most vulnerable renters
Those who were in the most precarious housing situations had the hardest time accessing the rental assistance.
Individuals or families without a permanent address were almost entirely locked out of CERA funds, despite clear directives from the state that the money could be spent to help get them housing. One Wayne County agency tasked with distributing CERA funds, the Homeless Action Network of Detroit, disagreed with the state about the amount of flexibility it had to distribute funds to homeless individuals or those living with friends or family.
MSHDA itself took months to update its online application portal to allow for those without an address to apply.
We can only estimate how many of these households were able to access assistance. By October 2021, fewer than 100 individuals and families either homeless or at risk of homelessness received money. But just two months later, the state stopped tracking this number altogether.
Wayne County was not equipped to handle the caseload
As of July 12, Wayne County received 94,084 applications — around one-third of the statewide total and the most of any county by a wide margin.
That number overwhelmed agencies tasked with processing those applications and doing case management for people without housing. Six months after CERA’s launch, nearly 60% of applications hadn’t been processed, resulting in months-long delays and evictions by impatient landlords.
One way the program tried to divert homelessness was by temporarily putting people in hotels after an eviction. But many of these people struggle with issues that make finding housing a challenge. They can be low-income, disabled, a senior citizen or lacking transportation and internet access. They required hands-on case management to navigate a rental market with few affordable options. The state expected case managers to meet weekly with these CERA applicants, but we found that was rarely, if ever, the case.
Landlords found new avenues for eviction
Enrollment in the CERA program prevented landlords from evicting tenants for nonpayment of rent. But many found other ways to evict if that was their ultimate goal.
The pandemic saw an increase in the ratio of “termination of tenancy” or “no-cause” cases, which give wide latitude to landlords who want to evict their tenants. The Eviction Machine, which has been tracking evictions during the pandemic, found that termination filings rose from 21% to 33% of all cases between April 2021 and April 2022.
The 36th District Court also hasn’t been enforcing the city’s Rental Registry Ordinance for termination cases. The ordinance requires landlords to ensure that their property is up to code. A tenant can’t appeal on the argument that their unit is in need of essential repairs, like running water, mold remediation or a new roof.
We don’t know enough about who received CERA money
The CERA program allowed renters to receive payments if their landlord refused to participate. But that happens infrequently. The state told Outlier by email that in 85% of cases, the money goes directly to landlords.
Who were the major recipients of this funding? We’re working on getting more and better data, but we do know that the landlord who evicted the most tenants during the pandemic, Mutual Property Management, also received the most money. The company, which manages hundreds of properties across the city, has filed 554 evictions in Detroit since March 2020.
But it’s not all about money
The $1.1 billion dollars spent, in Michigan alone, on rental assistance is an astonishing number. But there were other measures that were either less expensive or related to policy that contributed to eviction diversion.
Detroiters were better represented in court during the pandemic — about 20% of all cases, compared to 5% before the pandemic — thanks to a $5 million infusion of federal funds. Virtual courtrooms helped as well, making it easier for defendants to attend hearings and allowing legal aid attorneys to go to breakout rooms with clients. The 36th District Court cooperated in many ways, too, by letting landlords know about the CERA program and informing tenants that they can access an attorney.
In May, Detroit City Council enshrined this right, passing an ordinance mandating that all low-income Detroit residents get legal counsel in housing cases. Though money is a slight issue here — there’s still a $6 million annual shortfall in funding the ordinance.
One policy that could change is enforcement of the Rental Registry ordinance. The city has largely left it up to the courts, but more than 80% of eviction cases are filed by landlords without a Certificate of Compliance.
Detroiters’ need for housing assistance is still substantial
CERA may be ending, but Detroiters’ need for assistance is not.
Officials at the only other program still available to Wayne County renters, the Emergency Rental Assistance Program, said it received a spike in applications as the date when the CERA program would stop accepting applications neared. Though still below pre-pandemic levels, evictions have been on a steady climb since the end of the moratorium.
That’s because many of the underlying issues Detroit renters face persisted through the pandemic and in some ways got worse. Rental housing got more competitive as the vacancy rate dropped. The affordable housing need has barely been addressed. Rent in Detroit has increased 14% since the start of 2020. Detroiters’ financial outlook hasn’t substantially improved over the last two years, as 33% are below the poverty line and severely rent-burdened.
We spent an incredible amount of money on eviction diversion. We’ll soon find out if it was just a temporary reprieve.
Reach AARON MONDRY at email@example.com or 313-403-7221. This article appears in today’s issue of The Dig, Outlier Media’s weekly newsletter on housing and real estate. Click here to sign up to receive it.