By Carey Degenaro, Kinsey Hasstedt, Zach Neumann, Jack Regenbogen

During the COVID-19 pandemic, thousands of Colorado households fell behind on rent. Job losses, underemployment, and illness directly impacted these tenants’ ability to meet monthly obligations, resulting in high and growing rental housing debt. With the Centers for Disease Control’s (CDC) eviction moratorium expiring at the end of the month, these Coloradans are at imminent risk of losing their homes. 

Despite significant support in the form of state and federal eviction moratoria and over $700 million in combined state and federal rental assistance in 2020 and 2021, tenants recovering from COVID hardship must navigate complicated assistance applications and wait on state and county agencies to process them. Governor Polis should take immediate action to protect these renters and stabilize landlords through an executive order that makes a good faith application for rental assistance a full defense to eviction for non-payment of rent.

Colorado Renters At Risk of Eviction

According to recent data released by the U.S. Census Bureau, more than 150,000 Coloradans living in rental households are currently behind on rent. While figures vary, the National Equity Atlas conservatively estimates that these renters collectively owe their landlords nearly $400 million in unpaid arrearages through the month of June, with especially high concentrations of need in Denver ($76 million), Arapahoe ($47 million), and El Paso ($45 million) counties. Because of longstanding, racially motivated systems and policies, rental debt and the risk of eviction that accompanies it disproportionately impacts renters who identify as Black, Indigenous, and people of color (BIPOC). In Colorado, more than 65 percent of all tenants currently behind on rent are in BIPOC households. These renters are deeply indebted to property owners, with late fees, attorney fees, and other charges adding to their overall burden with each passing week. 

Pandemic-related housing debt threatens the long-term stability of renters and landlords alike, particularly small landlords and nonprofit housing providers. Unpaid rent may affect mortgage and tax payments, as well as property management and maintenance, especially given additional protocol and expenses to protect residents from COVID-19. For tenants, any rental debt owed to their landlord can be used to evict them. This means that even if a renter has received a vaccine, returned to full-time employment, and is making current, on-time payments, they may still face eviction due to an outstanding balance on their ledger. 

To help individuals and communities avoid the devastating consequences of eviction, significant state and federal funds have been allocated to address outstanding rental balances accrued during COVID-19. In 2020 and 2021, Colorado appropriated $20 million and then $54 million to address arrearages alongside federal appropriations of $385 million and $305 million. Over the same time period, eviction moratoria and other policies have slowed evictions and safeguarded tenants able to successfully claim their protections in court. The CDC eviction moratorium expires on July 31, along with Gov. Polis’ executive order requiring landlords to provide 30-day notice of nonpayment before initiating or filing for evictions that fall outside the CDC’s protection. This means Coloradans at risk of eviction would need to be able to rapidly access rental assistance, or face being removed from their homes. 

Eviction Often Outpaces Rental Assistance 

While Colorado has rental assistance dollars to support outstanding housing debt, and debt likely to accrue to renters still struggling with the impacts of COVID-19, this money may not reach tenants in time. Several factors are at play. 

First, despite ongoing efforts from governments and community-based organizations, many renters and landlords do not know money is available. A recent study conducted by The Urban Institute indicates more than 50 percent of renters and 40 percent of landlords aren’t aware of federal rental assistance programs. Some tenants interpret an initial demand for rent as a promise of eviction and choose to leave out of fear instead of pursuing available assistance. Many others learn they could access rental and legal assistance when an eviction notice is placed on their door, but by then, it is often too late.

Presently, there are 65,000 rental households behind on payments, but only 12,000 to 13,000 outstanding applications, and an additional 9,000 denied applications, in the state system. This disconnect may be due in part to language, technology, and other barriers that make the application process difficult to navigate, or to tenants and landlords experiencing confusion on eligibility and available benefits. 

Second, for those tenants who are aware of rental assistance and begin applications with state or county providers, the process can be lengthy and challenging. Cumbersome federal guidelines require tenants to provide extensive documentation of hardship and need. Many eligible tenants lack necessary documents or are unable to access the technology needed to submit them electronically. This is all the more complicated for individuals facing technology, language, citizenship, disability, and other systemic barriers. Similarly, landlords must also provide documentation in support of their tenant’s application, a task that is often harder for mom-and-pop landlords than large corporate owners. And occasionally, a landlord cannot be reached to complete the necessary steps, which slows down or even prevents assistance from reaching willing tenants.

Third, once documents are submitted, reviewers must then process applications, rejecting some, marking some as incomplete, and following up on others to request additional information or clarification. This process requires significant time and resources. And, after applications are approved for payment, checks must be prepared, recorded, and sent to landlords. Sometimes landlords’ addresses on file are not correct, meaning checks can get returned once sent. The payment timeline can take weeks to months to complete, even when things are progressing efficiently, and often outlasts the eviction timeline. 

A Balanced Policy Approach to Keeping Renters Housed

Lack of awareness and the difficulty of processing applications quickly means many landlords and tenants eligible for rental assistance may not be able to access it. Both renters and their landlords need more time. To respond to this problem, Gov. Polis should implement an executive order that makes a tenant’s good faith application for rental assistance a full defense to eviction for the non-payment of rent. Doing so would give landlords and tenants more time to navigate the rental assistance process and resolve outstanding debts, provide state and county agencies with breathing room as they work through thousands of outstanding applications, including many who are missing necessary documentation, and ensure hundreds of millions of federal dollars earmarked for individuals and families in need actually reach those Coloradans. 

This approach would confer a number of other policy, economic, and legal benefits. Making good faith applications for rental assistance a defense to eviction would create strong incentives for tenants, legal aid providers, and community navigators to accelerate application submission and completion, and take advantage of available federal funds. It would also incentivize both tenants and landlords to complete their respective portions of the application process, as one of the current barriers to successful payment is one party or the other’s unresponsiveness. Critically, tenants who had completed their portion of the application and were dealing with an uncooperative landlord could not be evicted for a period of months. 

The policy would also limit the size and long-term economic drag of toxic debt on Colorado’s rental housing market, protecting landlords from unrecoverable debts and tenants from years of debt collection calls. Once a tenant is evicted, their landlord may no longer access available emergency rental assistance dollars and the account balance is usually sold to out of state debt collectors for pennies on the dollar, ensuring a near full loss. For tenants, unpayable housing debt lingers for years, damaging their credit scores, rehousing prospects, and peace of mind.

Ensuring federal rental assistance reaches eligible tenants before they are evicted would protect the budgets of state and local governments. Eviction and homelessness are associated with an increase in shelter nights, emergency room visits, and risk of institutionalization — all of which contributes to it being a costly proposition for taxpayers. By some accounts, effective deployment of emergency rental assistance delivers a return on investment of over 200 percent for states and counties in terms of long-term costs avoided.

An executive order issued by Gov. Polis making a good faith application for rental assistance a defense to eviction would balance the interests of landlords and tenants, buy time for state and county providers to disburse federal funds, and avoid the high public costs of eviction and displacement. 

There is good precedent for this. In Nevada, lawmakers recently enacted such a policy, and in California, the state legislature has extended their eviction moratorium through the end of September, while ensuring that low-income residents can have their debts relieved. And in Washington D.C., a pending rental assistance application will stay evictions through February 2022. Colorado should similarly act to shore up tenants and landlords in the months ahead.

This is an unprecedented moment for Colorado’s 2 million renters. While the pandemic’s burdens are beginning to ease for many households and industries, others still face a long road to recovery. Colorado policymakers’  responsibility to those at greatest risk of harm is not over — officials must work to ensure available rental assistance acts as intended to keep low-income tenants in their homes and stabilize landlords and the state’s rental housing market.

The above piece is a guest contribution. Carey DeGenaro and Zach Neumann are the Director of Legal Services and the Executive Director, respectively, of the COVID-19 Eviction Defense project. Kinsey Hasstedt is the Director of State and Local Policy for Enterprise Community Partners in Colorado. Jack Regenbogen is a Senior Attorney at the Colorado Center on Law and Policy. If you are interested in contributing a guest piece for the Bell Policy Center’s website, get in touch!