Montana has distributed $56M in rental assistance, given back $53M

More than 10K renters received assistance; state says rules limiting flexibility hampered more distribution

By: - May 9, 2022 9:28 am

A “for-rent” sign (Photo by Getty Images).

Housing officials with the State of Montana literally could not spend more money on housing assistance, including the “Emergency Rental Assistance” federal relief.

And it’s not for lack of trying.

While Montana has so far had to return more than $53 million to the federal government that was designated for emergency rental assistance, the program’s guidelines, especially in rural areas, has made it nearly impossible to allocate without breaking federal law. Montana received more than $200 million in COVID-19 assistance.

However, statistics from the state show that Montana has spent more COVID-era funds on housing than it would normally spend on its rental vouchers programs, often referred to as “Section 8,” in a year. Since Congress authorized the rental assistance, it has distributed more than $56 million, and statistics show that more than 10,000 households have been helped, which represents more than two-thirds of all submitted applications.

Anastasia Burton, communications and public affairs supervisor for the Montana Department of Commerce, said that the state tried, but was left no choice to return the money, in accordance with U.S. Treasury guidelines.

Congress had put a specific set of rules in place, which included a finite timeframe for spending the funds. In order to secure support from both political parties, the states were forced to turn back unused funds by a specific date, known as a “claw back.”

States that didn’t allocate their full allotment of housing funds often fell into two groups, either largely rural states, which didn’t have enough applicants that fit the guidelines, or those states that inefficiently or ineffectively distributed funds.

As early as November 2021, Montana Gov. Greg Gianforte had asked Congress to fix some of the guidelines so that more money could be distributed in Montana. A federal spokesperson told the Daily Montanan that many states had asked, but Congress did not amend or clarify the legislation, leaving it up to states to turn back money.

“Demand for housing in Montana is at an all-time-high. In fact, market studies indicate many areas of Montana have a housing vacancy rate of under one percent. Serious challenges we face that are attributable to some degree to the pandemic – from our nation’s fractured supply chains to inflation levels not seen in over a generation to labor shortages – have exacerbated the long-standing problem of available affordable and workforce housing in the state,” Gianforte wrote.

All of Montana’s Congressional delegate signed on in support of that flexibility, too, including Democrat Sen. Jon Tester.

The emergency rental program has had two iterations, including a currently ongoing rental assistance program authorized by Congress. Burton noted that the department is working with the Montana Legal Services Association on initiatives like the Montana Eviction Intervention Project to help renters who are in debt and behind on their rent. Currently, 3,736 households still receive funding through this program.

Burton said funding has helped stave off eviction and a host of other legal problems. For example, a September 2020 study from the National Coalition of State Housing Agency found that between 10,000 and 30,000 Montana renters were in shortfall in January 2021, before the help, with 10,000 facing possible eviction. A similar report from the same time by Moody’s showed that as many as 1-in-5 renters were behind on rent, with the average owing more than $5,600.

Burton confirmed the average assistance through the program was $7,600.

Burton said that because there was a second round of funding, the department is still reviewing approximately 1,000 more applications for possible funding.

“We’re confident this program has and is continuing to make a difference by providing housing stability and peace of mind for thousands of Montanans,” Burton said.

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Darrell Ehrlick
Darrell Ehrlick

Darrell Ehrlick is the editor-in-chief of the Daily Montanan, after leading his native state’s largest paper, The Billings Gazette. He is an award-winning journalist, author, historian and teacher, whose career has taken him to North Dakota, Minnesota, Wisconsin, Utah, and Wyoming.