BE IT RESOLVED, that the County Administrator be authorized to negotiate Amendment 2 to Agreements PR00003136 with Volunteers Enlisted to Assist People, PR00003138 with People Responding in Social Ministry, PR00003139 with Community Emergency Assistance Programs, PR00003141 with Intercongregation Communities Association, PR00003140 with Interfaith Outreach and Community Partners, PR00003137 with Western Communities Assistance Network, to administer emergency rental housing assistance programs for tenant applicants to help low-income Hennepin County residents maintain their housing due to the economic impacts of the COVID-19 pandemic, extending the contract end date from May 30, 2022 to September 30, 2025, increasing the total combined not to exceed amount by $4,956,000 for a new total combined not to exceed amount of $9,956,000; that following review and approval by the County Attorney's Office, the Chair be authorized to sign the amendments on behalf of the county; and that the Controller be authorized to disburse funds as directed; and

BE IT FURTHER RESOLVED, that the County Administrator be authorized to negotiate an agreement with a vendor to develop and host an application platform, during the period June 1, 2021 through September 30, 2025, with a not to exceed amount of $50,000; that following review and approval by the County Attorney's Office, the Chair be authorized to sign the agreement on behalf of the county; and that the Controller be authorized to disburse funds as directed; and

BE IT FURTHER RESOLVED, that the County Administrator be authorized to amend the Agreement  A2110790 with Family Housing Fund to administer emergency rental housing assistance program for property owners applying on behalf of tenants to help low-income Hennepin County residents maintain their housing due to the economic impacts of the COVID-19 pandemic, extending the contract end date from May 30, 2022 to September 30, 2025, increasing the not to exceed amount by $11,589,562 for a new not to exceed amount of $ $21,621,736; that following review and approval by the County Attorney's Office, the Chair be authorized to sign the agreement on behalf of the county; and that the Controller be authorized to disburse funds as directed; and

BE IT FURTHER RESOLVED, that the County Administrator be authorized to negotiate any other agreements or transactional documents required to administer the above-referenced emergency rental housing assistance program, including but not limited to amending the cooperative agreement with the City of Minneapolis, City of St. Paul, Ramsey County, and Dakota County, for joint implementation; and that following review and approval by the County Attorney’s Office, the Chair be authorized to sign such agreements or transactional documents on behalf of the county; and

BE IT FURTHER RESOLVED, that a supplemental appropriation to the 2021 Housing and Economic Development department operating budget in the amount of $16,845,562, and the addition of 1.0 FTE, be approved; and

BE IT FURTHER RESOLVED, that a supplemental appropriation to the 2021 Human Services and Public Health departmental operating budget in the amount of $14,872,000, be approved.

History: Section 501(a) of Division N of the Consolidated Appropriations Act, 2021, Pub. L. No. 116-260 (December 27, 2020) first established the Federal Emergency Rental Assistance (ERA1) program (CP 1008501). The Emergency Rental Assistance (ERA) program provided funding to states, territories, and local governments to assist households that are unable to pay rent and utilities due to the COVID-19 crisis.

From its ERA1 allocation (Resolution 21-0051 adopted February 16, 2021), Hennepin County distributed approximately $15 million toward tenant-initiated applications, and $10 million to applications initiated by affordable rental property owners on behalf of tenants. Hennepin County launched its ERA1 program on March 5, 2021 and received 3,739 applications in two weeks. Processors finished applications in mid-May, then started processing applications received through a collaborative regional platform. A multi-jurisdictional program allowing affordable rental property owners and managers to apply on behalf of tenants will launch in early June. Between these two programs, we estimate spending the full $25 million of ERA1 before the middle of June 2021.

The current action before the board stems from the American Rescue Plan Act, enacted March 11, 2021, which included the appropriation of more than $21.6 billion for additional Emergency Rental Assistance (ERA2). The U.S. Treasury issued guidance regarding permissible uses of the ERA program on May 7, 2021. Funds are to be used to provide eligible emergency rent assistance to low-income renters. Not less than 85 percent of awarded funds must be used for direct financial assistance, including current and prospective rent, rental arrears, current and prospective utilities and home energy costs, utilities and home energy costs arrears, and other expenses related to housing.  Remaining funds are available for housing stability services, including case management and other services intended to keep households stably housed, and administrative costs.

Hennepin County Board Resolution 20-0122 (adopted March 26, 2020) authorized special delegation to the County Administrator to accept COVID-19 pandemic related grant and other funding awards in any amount and to provide details of accepting funding awards to the board in a timely manner. Staff requested its allocation of ERA2 on May 6, 2021 and received its first disbursement on May 11, 2021. Hennepin County was awarded a base allocation of $19,806,788.10, and an additional $11,910,774.10 for its high need, defined as a high number of very low-income renters paying more than 50 percent of income toward rent or living in substandard or overcrowded conditions, rental market costs, and change in employment since February 2020. Funds expire September 30, 2025.

Eligible households are renter households that qualify for unemployment or have experienced a reduction in household income, incurred significant costs, or experienced a financial hardship due to COVID-19; demonstrate a risk of experiencing homelessness or housing instability; and have a household income at or below 80 percent of the area median. Eligible households that have been unemployed for the 90 days prior to application for assistance and households with income at or below 50 percent of the area median are to be prioritized for assistance.

Staff recommends distributing ERA2 with an approach similar to ERA1. Hennepin County will ensure distribution of assistance commensurate to concentrations of renters with incomes below 50 percent of the area median income. In addition, the county will utilize culturally specific housing outreach providers and a multi-lingual application to reduce access barriers for highly impacted groups.

Second, staff recommends programming under three approaches to meet two goals: 1) reach the maximum number of eligible tenants, and 2) spend all funds as quickly and efficiently as possible. The three approaches are:

• $14,872,000 county-directed emergency rental housing assistance program for tenant applicants utilizing county staff (HSPHD)

• $4,956,000 contracted emergency rental housing assistance program for tenant applicants utilizing contracted providers (HED)

• $11,589,562 emergency rental housing assistance program for property owners applying on behalf of tenants (HED), administered jointly with other metro-area entitlement jurisdictions

This approach builds off lessons learned with CARES Act Emergency Housing Assistance in 2020, and ERA1, and leverages existing broad partnerships and resources. Integrating this program with the existing network would complement and expedite system change work already underway to better coordinated access to emergency assistance programs after the COVID-19 epidemic.

The current action will appropriate these ERA2 funds to the relevant county departments (HSPHD and HED), and will authorize negotiation and execution of amended, extended agreements with the current contracted providers to administer the emergency rental housing assistance program with the ERA2 funds. The current action will also authorize continued cooperation with other metro-area jurisdictions, as well as one FTE to be hired in Housing and Economic Development to provide ongoing oversight of the ERA2 program and funds, including shared administrative costs such as technology and promotion.

Impact/Outcomes: Approval of these agreements will assist an additional 8,600 low-income Hennepin County residents maintain stable housing during the COVID-19 pandemic.