MaineHousing halts rental assistance program

MaineHousing is halting new applications for its emergency rental assistance program while waiting to hear from the federal government whether a request for $55 million in additional funding for the program will be approved.

The program, which began in March 2021, was expected to last at least through December 2022, but an “unanticipated uptick in demand” for the assistance means it needs to be paused, MaineHousing said in a statement.

Since its inception, the program has helped 33,719 households with rent payments, spending about $275 million in federal COVID-19 relief money.

The goal of the $45 billion federal program, which is available in all 50 states, is to help qualified renters by temporarily paying their rent. But the demand for the program has exceeded the funding currently available.

There are about 11,000 pending applications that MaineHousing is working through that the agency will be able to approve with existing funding. Based on previous experience, about 7,000 would be eligible for the program. But to extend the program beyond that will take additional federal money.

“This pause in applications is a fiscally responsible and reasonable move that will allow us to ensure all who have already applied to this program get a fair opportunity to receive help,” said Scott Thistle, a MaineHousing spokesman. “This temporary program, funded with one-time money from Congress, was meant as an emergency measure to help abate the economic backlash wrought by the COVID-19 pandemic in Maine. It was not intended to be a long-term bandage, a permanent source of rental assistance or a solution to the state’s ongoing affordable housing crisis. Simple math tells us that without replenishment this program cannot run indefinitely.”

Thistle said demand for the program increased this year, a combination of rising rents, the housing shortage and financial repercussions from the continuing pandemic. MaineHousing tried to reduce demand by tightening eligibility, from households earning up to 80 percent of median income to earning 50 percent of median income, and capping the amount paid to hotels. For those eligible, the program pays rent directly to landlords for three months, with renewals possible for up to a year.

But demand still surged.

“We pumped on the brakes to try to slow down the car, but when we pumped the brakes it didn’t slow down the car,” Thistle said.

He said if the request is successful, MaineHousing will be able to extend the program through at least much of the winter.

Dozens of states have paused or ended similar programs, including New York, California, Florida, New Jersey, Connecticut and Rhode Island, MaineHousing said.

Thistle said the extra demand for the program highlights the cost-of-living problems Maine is undergoing, with a housing shortage driving up costs everywhere, for homeowners and renters.

A new Maine law passed this year that goes into effect in July 2023 will require local governments to allow duplexes in all areas where single-family homes are permitted, regardless of the zoning. It’s part of a larger effort to address the housing crisis, although advocates say much needs to be done as Maine is becoming an increasingly expensive place to live.

“The housing shortage is seriously impacting Maine families,” House Speaker Ryan Fecteau said in a statement on Friday. “There is not enough supply to meet demand and we’re seeing costs rise for renters and homebuyers as a result.

“I worked on this bill with hundreds of town planners, municipal leaders and citizens to make duplexes and accessory dwelling units legal in Maine so more housing can be built in every town to meet the demand.”