This program offers a housing provider security if they take a chance with a high-risk renter suffering as a result of the impact of COVID-19.
The Problem
High-risk tenants affected by COVID-19 and it’s impact, may have difficulty finding quality housing because many Housing Providers cannot justify the risk that renting to them represents with an eviction or judgment against them.
- Housing Providers operate with a very low return on investment, so any future eviction eliminates at a minimum one entire year of return.
- Federal Fair Housing laws prevent Housing Providers from making exceptions for individual at-risk tenants.
- Tenants with eviction histories are high-risk because studies have shown the number one indicator of a tenants’ failure is previous evictions.
- Tenants with vouchers are high-risk because the voucher programs are inconsistently run, slow to pay, and often lose funding or remove tenants from the program leaving them in units they cannot afford.
The Solution
The city implements a bond program using federal stimulus funds whereby if a tenant has already been evicted, they will be eligible for funding from the city to the Housing Provider for the next unit of housing.
Tenants who can prove that they have been negatively impacted by COVID-19 are eligible.
- High-risk tenant applicant that otherwise meets the application requirements can be referred to the bond program by the Housing Provider.
- The risk to Housing Providers will be greatly reduced due to the likelihood of the tenant’s success with funding that the assurance of the City Bond provides.
- High-risk tenants will pay the security deposit and rent the same way as all of the other Housing Provider’s tenants do use funds from the bond. (ie. Security deposit, first-month rent due at time of lease signing)
- The more successful the program the greater the number of tenants who can be helped.
- We will actively promote the program in our messaging to our networks.
- The City will be seen as an active partner with both the tenants and the Housing provider instead of being seen as advocating for or against only one side in the industry.
Cost & Impacts
- KCMO Self-Insured Security Bond Cost Exposure, using federal stimulus funds costs $1,000,000 per year.
- The impact is 277 households helped, cost: $1,000,000 Federal stimulus funds. $900/month for 4 months totaling $3,600 helps 277 tenants secure housing.