NEW ORLEANS — A bureaucratic tangle has kept tens of millions of dollars in emergency rental assistance out of the hands of thousands of tenants and landlords across the state.
New Orleans and six other parish governments are still waiting on more than half of the federal aid they are getting to help residents cover missed rent payments, thanks to confusion with the portion of the money that’s administered by the state of Louisiana.
Meanwhile, WWL-TV obtained an internal City Hall memo that suggests Mayor LaToya Cantrell’s administration planned in March to send some of New Orleans’ limited housing assistance funds to a business development group.
It’s all raising alarms for housing advocates and local officials who say they don’t understand why the money isn’t flowing to those who are supposed to get it and desperately need it.
The state and its seven parishes with more than 200,000 residents – East Baton Rouge, Jefferson, Orleans, Caddo, Lafayette, Calcasieu and St. Tammany – each received funding from the U.S. Treasury to operate Emergency Rental Assistance programs, first from the supplemental Covid-relief package passed by Congress in December and then from the American Rescue Plan that passed in March.
“That’s over $550 million that's been here since the spring of 2021. And they're not getting the money out the door,” said fair-housing advocate Andreanecia Morris, executive director of HousingNOLA.
In New Orleans, where more applicants have received help than anywhere else in the state, barely one-sixth of nearly 17,000 applicants had been paid and only $18 million of the city’s $46 million share of the federal aid had been received as of Aug. 2.
But progress paying grants in the rest of the state has been even more tepid. East Baton Rouge Parish and Jefferson Parish each qualified for more federal money than New Orleans by virtue of their larger populations. But they combined to pay out barely a third of the money and a third of the grants New Orleans has.
Jefferson Parish’s program faced a scandal when it hired HGI, a company that started in Lutcher as Hammerman & Gainer and has a spotty history, to administer it. The parish fired HGI in May when the company billed $1 million to hand out less than a quarter of that in grants. Morris said she was shocked that any local government would hire HGI after it had run the widely criticized Road Home housing recovery program for Louisiana after Hurricane Katrina and got fired by New Jersey for how it handled its version of housing assistance after Hurricane Sandy.
The Jefferson program is now being run in-house. As of Aug. 2, 356 applicants had received $2.2 million, according to state tracking data.
The same data show New Orleans spending all of the $18.2 million it received directly from the U.S. Treasury to run its program. But the city has only last week collected the first $2.5 million of about $25 million it’s supposed to get from the state of Louisiana. That state-processed money arrived just last week, even though the city entered an agreement with the state to get the first $14 million of it in February.
New Orleans received $11.6 million of federal funding directly from the U.S. Treasury in February, and another $6.6 million in June. The city’s director of housing policy, Marjorianna Willman, said all of that money has been paid.
With the first batch of funding, landlords had to apply with their tenants, and the grants went to the landlords for missed back-rent. The second tranche of funding didn’t require landlords to be involved and could go directly to tenants.
As a part of the first batch of funding, New Orleans was supposed to get $14.1 million administered by the state. With the second allocation from Congress, New Orleans should get another $11.2 million from the state, according to Assistant Commissioner of Administration Desiree Honore Thomas.
That additional $25.3 million would be enough to pay $5,000 grants – around the average paid so far – to another 5,060 waiting applicants.
Because the state is on the hook for any fraud or misuse of the money, Thomas said it will only release the money to the city after reviewing samples of applicant files. The first $2.5 million was approved last week and another $3.5 million batch is being reviewed this week.
It looked as if the first $14 million from the state had arrived on July 1 when the Cantrell administration asked the City Council to approve spending that amount on the Emergency Rental Assistance program. Instead, Willman said the city was just trying to work ahead so the money could go out to applicants more quickly when the state sends it.
“I do think that once they see that our files are good and they're comfortable with them, we'll receive more funding much quicker,” Willman said.
That confused the City Council Budget Committee chairman, Jared Brossett, who has been sending emails to Cantrell’s budget office for weeks trying to get information about the program’s finances.
“People are on edge, both mentally and physically,” Brossett said. “And so, I wish that the administration would cooperate and give us the answers that we need because we represent the people.”
Among Brossett’s questions is why the city isn't tapping into another housing fund called the NHIF, the Neighborhood Housing Improvement Fund, to pay some of the rental assistance grants.
After all, the city used it for the Emergency Rental Assistance program last year before Congress approved federal money for it.
Cantrell has been a dedicated defender of the NHIF, writing an ordinance in 2015 when she was a city councilwoman to make sure the NHIF money could only be used for three things: Home ownership, fixing blight and rental assistance.
But a March 17 memo by city Chief Administrative Officer Gilbert Montano and approved by Cantrell proposed sending $600,000 from the NHIF to the New Orleans Business Alliance. The memo says it lays out the spending plan precisely because voters had rejected a proposal last December to dedicate taxes to certain economic development initiatives, including the NOLABA.
Montano said the part of the plan that called for taking money from the NHIF was a “mistake” and was never executed. He pointed to ordinances passed by the city council that authorized spending for the NOLABA from the city’s Economic Development Fund.
Morris and Brossett said they were aghast that the Cantrell administration would have even considered a plan that would have drawn money from the NHIF.
“That is a violation of the city charter and the laws and the code of the city of New Orleans,” Brossett said.