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HomeMy WebLinkAboutORD-2020-011 Eviction Diversion Program and Approval of Budget Amendment #9-A 1 ORD-2020-011 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 19, 2020 Action Agenda Item No. 6-a SUBJECT: Eviction Diversion Program and Approval of Budget Amendment #9-A DEPARTMENT: Human Rights and Relations, Housing and Community Development and Criminal Justice Resources ATTACHMENT(S): INFORMATION CONTACT: None Annette Moore, (919) 245-2317 Emila Sutton, (919) 245-2490 Caitlin Fenhagen, (919) 245-2303 PURPOSE: To: 1) Approve the development of an Eviction Diversion Program in Orange County to help eligible Orange County residents avoid eviction, preserve tenancy, address substandard housing conditions and maintain the affordable rental housing supply; 2) Allocate funds to pay housing costs necessary to prevent imminent eviction and foreclosure, assist in securing affordable homes, and prevent homelessness; 3) Authorize staff to seek funding for the Eviction Diversion Program from the Towns, and donations from the communities and businesses; and 4) Approve Budget Amendment #9-A. BACKGROUND: The COVID-19 Pandemic has had a devastating effect on the global economy. In February 2020, Orange County along with Buncombe County led the state with the lowest unemployment rate of 2.9%. Because of COVID-19, Orange County's unemployment rate in March 2020 increased to 3.4%. With the increase in unemployment, staff have seen an increase in requests for food and housing assistance, particularly in the communities that cannot receive government assistance. The Orange County Housing and Community Development Department (OCHCD) in particular has seen the number of requests for emergency housing assistance through the Housing Displacement Fund more than quadruple in April (table below) and calls to the Housing Helpline (aka Coordinated Entry) have increased sharply. The Housing Helpline receives approximately three to five calls per week from residents seeking legal counsel for a housing issue, and this number is rising. Finally, the Clerk of Court's Office has seen a dramatic increase in eviction filings and is adding additional court hearing dates to address this increase. 2 The federal CARES Act did not provide unemployment benefits to undocumented workers or stimulus funds to those who do not have a social security number. While some workers may use an Individual Taxpayer Identification Number ("ITIN") to pay taxes, these individuals were not able to use it to receive stimulus payments. Pandemic Food and Nutrition Benefits (P-EBT) were available to all children who received free or reduced lunches in schools. Eviction destabilizes the lives of families and has consequences for the entire community. Those most affected by evictions are the most vulnerable populations. Numerous studies show the negative impact of eviction on health, child development and achievement, and well-being.' There is also research showing that preventing eviction can reduce costs to the health care system, lower costs and reduce the burden on shelter and other emergency housing programs, ease the administrative burden on the courts, reduce job loss, reduce negative educational outcomes, and prevent the decline of communities that occurs when people are displaced.2 A 2018 study by the Philadelphia Bar Association found that if the City of Philadelphia allocated $3.5 million per year to fund counsel for eligible low-income tenants facing eviction, the city would save $45.2 million per year, a return of $12 for every $1 spent.3 Research also shows that housing assistance, such as that provided through the Risk Mitigation and Housing Displacement Fund, reduces hardship and increases economic opportunity for low-income families.4 The Risk Mitigation and Housing Displacement Fund currently, and the Eviction Diversion Program when in operation, will provide cost savings to the community, help stabilize and preserve the housing market in Orange County5, and most importantly help Orange County residents remain in their homes and avoid the negative impacts of eviction. The Departments of Human Rights and Relations and Housing and Community Development have been working toward bringing forward a proposed Eviction Diversion Program to the Board of County Commissioners since last year. In light of the COVID-19 pandemic and its economic impact on the community, there is a critical need for this program now. Eviction diversion programs were started around 2010 to address the number of evictions from the recession. The Human Rights and Relations, Housing and Community Development, and Criminal Justice Resources Departments, along with the Clerk of Court, the Chief Magistrate, Carolina Student Legal Services, NC Pro Bono Resource Center, Orange Chatham Legal Aid, Commissioner Mark Marcoplos and Jamie Paulen met to discuss the impending eviction crisis and potential Selected examples include: - Desmond, M. and Tolbert Kimbro, R. (2015). Eviction's fallout: Housing, hardship, and health. Social Forces, 94(1): 295-324. - Cookson, T., Diddams, M., Maykovich, X., and Witter, E. (2018, September). Losing home: The human cost of eviction in Seattle. Seattle Women's Commission and King County Bar Association. https://www.kcba.org/Portals/0/pbs/pdf/Losing%2OHome%202018.pdf - Butera, C. (2018, January 23). The burden of a late rent check can harm the health of both parents and kids. Pacific Standard https://psmag.com/social-justice/late-rent-payments-family-health 2 Stout Risius Ross. (2018, November). Economic return on investment of providing counsel in Philadelphia eviction cases for low-income tenants. Philadelphia Bar Association. https://www.philadelphiabar.org/W ebObjects/PBA.woa/Contents/W ebServerResources/CMSResources/Philadelphi a Evictions Report.pdf. 3 Ibid. 4 Center for Budget and Policy Priorities (2019, December 5). Research Shows Rental Assistance Reduces Hardship and Provides Platform to Expand Opportunity for Low-Income Families. https://www.cbpp.org/research/housi ng/research-shows-rental-assistance-red uces-hardship-and-provides-platform- to-e xpand 7 Urban Institute. (2020, April 14). "The Future Is Shared": Why Supporting Renters during COVID-19 Is Critical for Housing Market Stability. https://housingmatters.urban.org/feature/future-shared-why-supporting-renters-during- covid-19-critical-housing-market-stability 3 solutions. The group determined an eviction diversion program would offer the best solution. The two most pressing issues are: (1) ensuring attorneys are available to meet the demand; and (2) identifying funds to enable tenants to stay in residence once they have demonstrated some financial capacity to meet rental obligations going forward and the landlord has agreed to let the tenant stay. The Orange County Eviction Diversion Program would bring together Legal Aid of North Carolina ("Legal Aid") and pro bono attorneys to represent tenants in court and to act as in court mediators to negotiate agreements between tenants and landlords to avoid eviction. Legal Aid has an income limit threshold, so it would only be able to assist tenants meeting its income threshold requirements. County staff are working with Legal Aid and the NC Pro Bono Resource Center to assist with identifying local pro-bono attorneys, including bi-lingual attorneys, to meet additional community needs. Referrals to the program would come through the existing Orange County Housing and Community Development Department ("OCHCD") and the Orange County Partnership to End Homelessness' Housing Helpline (aka Coordinated Entry). Every person who calls into the Housing Helpline goes through a needs assessment that is best practice and evidence based. County staff will use funds the Board has already allocated for rent stabilization for this project through the Risk Mitigation and Housing Displacement Fund (the sub-fund called "Emergency Housing Assistance", formerly "Housing Stabilization Fund"). The Board approved a one-time transfer of funds ($100,000) from the Local Rent Supplement Program into the Housing Displacement Fund on April 7, 2020. Since that time, approximately forty thousand ($40,000) in emergency housing assistance has been utilized by Orange County residents experiencing a housing crisis through the Housing Helpline (a.k.a. "Coordinated Entry"). Since January, as illustrated in the table below, over seventy thousand dollars ($70,000) in assistance has been funded. There are approximately $53,000* in Emergency Housing Assistance funds remaining, but with new requests coming in every day, this estimate changes daily — and sometimes dramatically. At this time, a large majority of requests are coming from low-income residents who have been out of work due to COVID-19 and business closures. The Urban Institute estimates that more than 5,000 Orange County residents lost employment due to COVID-19, and most of those jobs are in the food service, retail, and accommodation industries6, which make up a significant portion of the County's economic base.7 Current Emergency Housing Assistance fund criteria is as follows. Full policies can be found here: https://www.orangecountVnc.gov/2359/Risk-Mitigation-and-Housing-Displacement Assistance is available to households in Orange County that (1) earn no more than 60% of the area median income (AMI)*, (2) can demonstrate urgent need for housing assistance, and (3) do not have adequate savings to cover their housing costs. To be referred for assistance, households must either: Be assessed through Coordinated Entry as at risk of or currently experiencing homelessness and who have identified safe, decent, and affordable housing OR 6 Urban Institute (2020, April 24). Where Low-Income Jobs Are Being Lost to COVID-19. https://www.urban.org/features/where-low-income-mobs-are-being-lost-covid-19 Orange County Consolidated Plan. Market Analysis (MA-45): Non-Housing Community Development Assets. http://orangecountync.gov/DocumentCenter/View/10806/Orange-County-NC-Consolidated-Plan-Final-Draft?bid ld= 4 Referred by various Orange County Departments and local service providers (e.g., Aging, Health/Family Success Alliance, Criminal Justice Resource and Social Services, Community Empowerment Fund, Interfaith Council, Compass Center, etc.) *Preference will be given to applicants earning under 50% ofAMl The Towns and County streamlined application and policies in April so that all Orange County residents can be assessed through the Housing Helpline process, which uses a research-based Coordinated Assessment process to connect people with community resources. One of these resources is the Towns' and County's Emergency Housing Assistance. Hillsborough, Chapel Hill, and Carrboro each have funds for emergency housing assistance. Prior to the coordination of these funds, access to the separate funds was not systematized, resident requests were not tracked across the County/system, and eligibility for each fund was disparate. Now, there is a coordinated intake system for requests and eligibility criteria are streamlined. Before streamlining, there were instances of residents not being eligible for Town funds, so the County would cover these costs. OCHCD is currently working on a reimbursement process with the Towns for eligible costs incurred from residents residing within the respective Town's jurisdiction. The amount incurred from each jurisdiction is recorded and tracked. The fund offers one-time assistance per household, and there is a funding maximum of $2,000 per household. The average amount of assistance the fund provides is $1,170, so the additional $130k allocation could serve approximately 110 people. The average amount of assistance requested has increased since the COVID-19 pandemic. Thus far, OCHCD has not had anyone request assistance for a second time. However, this could become more common as issues with affordability and job security are ongoing. While the fund can keep someone from eviction for now, that person may not be able to afford their dwelling six months from now depending on employment, rent stability of the current housing, and other factors. However, keeping an eviction off someone's record is a powerful way to help them access housing in the future, as an eviction record can bar people from housing for years into the future. The need for ongoing flexible housing assistance is great. Based on the current data on cost- burdened renters, there are more than 12,000 Orange County residents in need of rental subsidy to keep their income to rent ratio affordable. OCHCD, in partnership with the Orange County Partnership to End Homelessness (and through initial staffing support from DSS), is providing case management to eligible Orange County residents in need of ongoing rent assistance through the County's Housing Help Rapid Re- Housing program, which provides rent assistance and case management for roughly 20-25 Orange County residents. OCHCD is also leveraging the Housing Choice Voucher program by implementing existing Orange County Housing Authority preferences for people experiencing homelessness and people impacted by natural disaster (to include the pandemic) to obtain longer term rent assistance through a Housing Choice Voucher, and hopes to issue 75-130 additional vouchers in 2020. All of these programs will work in tandem with the Eviction Diversion Program to help address the growing need, exacerbated by this pandemic, for affordable housing in the County. There are additional potential CARES Act allocations that can help replenish the fund to include Emergency Solutions Grant funding and Community Development Block Grant funding from the Town of Chapel Hill. 5 Jan Feb Mar Apr Amount Households Amount Households Amount Households Amount Households Security Deposit $1,850.00 3 $1,360.00 1 $1,750.00 2 Rent $7,243.98 5 $6,838.59 4 $4,469.35 4 $35,776.32 45 Utilities $562.49 4 $1,369.68 5 $215.00 1 $323.55 2 Hotel Stay $1,241.00 1 1 $1,999.18 2 $3,114.72* 2 TOTAL $9,656.47 12 $10,809.27 11 $8,433.53 9 $36,099.87 47 *Estimate; credit card statement has not yet been received Note: Since May 1 and the drafting of this memo on May 12, 2020, OCHCD has received and approved applications for 12 households, totaling$7,676 Staff is requesting the following: 1. An allocation of Social Justice Reserve funds to finance the Eviction Diversion Program — Funds would be allocated to pay for the Eviction Diversion Program and additional funds for the Risk Mitigation and Housing Displacement Fund so that rental and mortgage arrears can continue to be paid to prevent eviction and foreclosure, among other emergency housing assistance, and Legal Aid of North Carolina and temporary staffing to assist with mediation of Housing Helpline calls prior to residents reaching court proceedings. 2. Authorization to seek funding from the Towns, and donations from community residents and businesses to fund this Program — While the Towns have their own emergency housing assistance funds that are streamlined with the County's emergency housing assistance fund to follow the same referral and application process, additional funds will be requested specifically to provide support to the Eviction Diversion Program. Donations from the private sector as well as from community residents could also help bolster existing resources and services provided through this program. County staff is currently solidifying the details of this program. However, on June 1, 2020 when the Courts open, staff would like to have the resources in place to get started assisting people. Currently, there are about 20 evictions pending. OCHCD has already reached out to the tenants and landlords to try and avoid those evictions. Staff is receiving more calls each day, and with this program, the County can begin to allay some County residents' fears of eviction. FINANCIAL IMPACT: Budget Amendment #9-A provides for the appropriation of $200,000 in available Social Justice Reserve funds in the following manner: • Fifty-Five Thousand dollars ($55,000) for Legal Aid of North Carolina to provide a full time staff attorney and case management services; • One Hundred Thirty Thousand dollars ($130,000) for the Risk Mitigation and Housing Displacement Fund, and • Fifteen Thousand dollars ($15,000) for temporary staffing. With this appropriation, there would be no more available funds remaining in the Social Justice Reserve for FY 2019-20. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable to this item: • GOAL: FOSTER A COMMUNITY CULTURE THAT REJECTS OPPRESSION AND INEQUITY The fair treatment and meaningful involvement of all people regardless of race or color; religious or philosophical beliefs; sex, gender or sexual orientation; national origin or 6 ethnic background; age; military service; disability; and familial, residential or economic status. • GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY The creation and preservation of infrastructure, policies, programs and funding necessary for residents to provide shelter, food, clothing and medical care for themselves and their dependents. • GOAL: CREATE A SAFE COMMUNITY The reduction of risks from vehicle/traffic accidents, childhood and senior injuries, gang activity, substance abuse and domestic violence. ENVIRONMENTAL IMPACT: There is no Orange County Environmental Responsibility Goal impact associated with this item. RECOMMENDATION(S): The Manager recommends that the Board: 1) approve the development of an Eviction Diversion Program in Orange County; 2) approve Budget Amendment #9-A appropriating $200,000 from the Social Justice Reserve for the Program; and 3) authorize staff to seek funding for the Eviction Diversion Program from the Towns, and donations from the communities and businesses.