Landlords Turn to Software, Services for ERAP Distribution

Image by Michal Jarmoluk from Pixabay

Faced with the daunting challenge of reviewing applications, approving requests and dispersing billions of dollars in federal funding aimed at helping residents and landlords catch up on pandemic-related unpaid rent, many states and local governments are turning to software providers, emergency management firms and advisory services companies to help them deal with requirements of the Emergency Rental Assistance Program.

“One size does not fit all and each jurisdiction is a little different,” said Frank Banda, managing partner, public sector at CohnReznick, a professional services firm offering ERAP application review, quality control, compliance monitoring and case management assistance to several states including Connecticut, Texas and Louisiana. 

Under the $25 billion ERAP, approved in December as part of the $900 billion Consolidated Appropriations Act 2021, every state gets at least $200 million. The funding can top more than $1 billion or $2 billion for the largest states like New York and California. Within each state’s total allocation, local governments and counties with more than 200,000 residents are also getting rent and utility relief funding, including New York City ($287.3 million), Los Angeles County ($160 million), and the city of Los Angeles ($118.3 million.) Funds are being provided directly to the District of Columbia, U.S. territories, Indian tribes, tribally-designated housing entities of Indian tribes and Department of Hawaiian Homelands.

This first tranche of federal funding does not include the $21.5 billion for ERAP and $5 billion in rental assistance vouchers in the $1.9 trillion American Rescue Plan Act approved earlier this month. Information on allocation of those funds has not been released.

How much states and the District of Columbia are to receive in the Emergency Rental Assistance Program established by the Consolidated Appropriations Act 2021, which was approved and signed into law in December 2020. Source: U.S. Department of the Treasury, Emergency Rental Assistance Program

ERAP will provide up to 12 months of rental and utility assistance for eligible households who owe back rent and utility payments incurred after March 13, 2020, due to the pandemic. Once rental and utility arrears are reduced, future rent and utility payments for up to three months at a time can be considered. If a resident in arrears does not apply, a landlord can but must have the renter’s permission and documentation.

Banda said the first request for help came from Connecticut, which was awarded more than $235 million in the December pandemic relief bill. Seila Mosquera-Bruno, commissioner of the Connecticut Department of Housing, said more than $220 million is targeted for direct assistance. Mosquera-Bruno said the DOH contracted CohnReznick for consulting services including accounting and auditing and turned to Yardi, which launched its Rent Relief software platform in early February, for a technology solution.

“In large part, Yardi’s extensive experience in the housing and property management industry was a determining factor in the final selection,” Mosquera-Bruno said in a statement provided to Multi-Housing News.

Chris Voss, vice president of affordable housing and PHA at Yardi, said Rent Relief is “a true end-to-end solution” that is an easy-to-use and quick-to-implement platform. The cloud-based software was built on the foundation of Yardi’s RentCafé software and the payment processing capabilities of Yardi’s Voyager, he said. 

“We were not starting from scratch. We were leveraging our decades of experience in building software for the real estate industry and our platform that was already processing billions of dollars in funds every month and accepting hundreds of thousands of applications,” Voss told MHN.

He said nine agencies, state and local governments were working with Yardi Rent Relief as of March. Voss said the platform is designed with flexibility to meet any upcoming rule changes, something that is likely to occur as the Treasury Department issues ERAP guidelines for funding under the American Rescue Plan Act. The software is also designed to clients to choose specific services such as case management or payment processing, Voss said.

More Turnkey Solutions

Neighborly Software, which had been providing cloud-based turnkey solutions for housing, economic and community development programs for several years, pivoted quickly last year once the $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act was approved and was handling client requests by early April, said Jason Rusnak, Neighborly president & co-founder.

Rusnak said last year governments were caught off guard and scrambled to find staff to administer the programs. One of the biggest differences between 2020 and 2021, he said, is they realize that’s not sustainable and are looking for technology and professional services. Neighborly has developed relationships with several firms like Tetra Tech, a consulting and engineering firm; Horne LLP, a CPA and business advisory firm; and CliftonLarsonAllen (CLA), a professional services network, as part of its ERAP offerings.

Neighborly learned from its early experiences with the CARES Act, Rusnak said. Keeping the process simple is key, he said, noting that at least 50 percent of the people will be filing their applications with their phones and will need to take pictures of and upload documents.

The firm has 49 ERAP clients and expects to add another 10 to 15 within the next month. Rusnak, who noted they have statewide contracts in California, Texas, Tennessee, Alabama and Colorado at this time, said they can be up and running with a customized portal within five days of getting a contract.

Largest cities and counties with more than 200,000 populations receiving funds. Source: U.S. Department of the Treasury, Emergency Rental Assistance Program

Another technology company offering a turnkey solution for state and local governments to manage and distribute the ERAP funding quickly and securely is Unqork. The firm, which developed a no-code platform that helps companies and other entities build custom software without creating code, launched Unqork Rent Relief to provide governments with automated end-to-end workflows from pre-screening through award determination and completion. It can seamlessly integrate with existing databases and systems as well as third-party applications for identity validation, payment processing and other services.

Cas Holloway, head of public enterprise at Unqork and a former New York City deputy mayor of operations, said Unqork’s no-code platform lends itself to the customization that will be needed for each jurisdiction’s current needs and can also be adapted for future changes.

The company was working on about 10 ERAP projects as of late March, including at least one statewide implementation, several counties and one of the top five cities. Holloway declined to say which one but noted it was not New York City. 

Unqork has partnered with Witt O’Brien’s, a crisis and emergency services consulting firm, on several bids but does not have an exclusive arrangement. Holloway said he has known Brad Gair, a Witt O’Brien’s principal & senior managing director, for many years. It was Gair who called Holloway late last year and said state and local governments would need more specific solutions to process payments and meet the Treasury Department guidelines coming in the 2021 funding programs.

“This is turning out to be a tremendous amount of work for jurisdictions,” Gair said, citing five key segments for program delivery—overall management, outreach and marketing, preparing applications and documentation, call center management, review and payment processing—that could prove to be overwhelming for governments as well as community organizations they were using for assistance programs.

Matthew Erchull, a Witt O’Brien’s managing director, also stressed flexibility in designing programs for each client. He said some jurisdictions might not have enough funding to meet the need in their communities and would need help prioritizing applicants such as those with less than 50 percent Area Median Income (AMI) or unemployed for more than 90 days. ERAP will allow rental assistance for those with household income up to 80 percent AMI.

Erchull said he is anticipating changes that will need to be made once guidelines for ERAP 2.0 as he put it, are established and how jurisdictions can spend the money in the second tranche of rental and housing assistance.