Item 17 - Emergency Rental Assistance Program Spending Plan and Appropriation Adjustment

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Emergency Rental Assistance Program Spending Plan & Appropriation Adjustment February 16, 2021 Page 3 4 1 9 appropriating the full amount of the CARES allocation, due to the short timeline for spending. Proposed ERAP Spending Plan Based on professional staff recommendations, the proposed spending plan below achieves two things. First, it builds upon our results and success to date with our existing CARES for Tenants Program. And second, it conforms to the statutory requirements of this new funding source. This is the approach staff recommends to most efficiently and effectively spend this $9.8 million in additional funding before the end of the year. Specifically, staff recommends allocating $8,892,352 to our CARES for Tenants Program that we have been administering since May 2020. The remaining $988,039 (10% of the total grant) will be allocated to administration of the program. The City has over 1,100 applicants waiting for assistance through our CARES for Tenants Program; staff has kept the applications open for new applicants since August 17, 2020. The CARES for Tenants Program currently provides a one-time emergency rental assistance payment of $3,000 per eligible household and the City has assisted over 1,238 families with emergency rental relief so far. With these additional funds, staff recommends to increase this one- time payment to $5,500 per eligible household. If the City Council does not change the core requirements of the CARES for Tenants Program, staff will be able to assist all 1,100 families waiting for assistance, who have already applied, and over 516 additional families. A flat assistance amount of $5,500 per household was calculated based upon the remaining number of households to be served with ERAP funding, the average monthly rent in the City of Santa Ana, and an analysis from Moody’s Analytics and the Urban Institute. First, the average cost of rent was established for the following housing types: studios, one-bedroom, two-bedroom, three-bedroom, and four-bedroom apartments. The average cost of rent for each type of housing was calculated based on three sources: HUD Fair Market Rents for the Santa Ana/Anaheim/Irvine Metroplex; a survey of Santa Ana landlords who participated in the 2020 “CARES for Landlords” program; and the average rent costs in Santa Ana based on estimates from a popular apartment search platform. The average monthly rent across all housing types was $1,983, which was rounded up to $2,000 per month. Based on this amount, it was determined that approximately 1,334 households could be served with three months of rent, at $6,000 each. This amount was reduced to $5,500 per household based on data published by Moody’s Analytics and the Urban Institute, which indicates that the typical delinquent renter owes $5,600 in rental payments across the country. A total of 1,616 households would receive $5,500 each in Emergency Rental Assistance funds. This amount is less than the County’s Emergency Rental Assistance Program which provides $10,000 per household, but our funding will go further to serve more families per dollar. In addition, staff launched our Santa Ana Vital Eviction Solutions (SAVES Program) on February 1, 2021 with over $5.5 million to provide families with additional eviction prevention assistance.