The Potluck

Senate Republican calls for state audit of RentHelpMN

By: - February 14, 2022 8:30 pm

Sen. Rich Draheim, R-Madison Lake, questions Minnesota Housing Commissioner Jennifer Ho during a Feb. 8, 2022 Senate hearing.

The chair of the Senate Housing Finance and Policy Committee is calling for the legislative auditor to review the state’s half-a-billion-dollar emergency rental assistance program. Sen. Rich Draheim, R-Madison Lake, cited concerns about unclear reports from the Minnesota Housing commissioner, who’s overseeing the program.

The program, RentHelpMN, was funded through two federal COVID-19 relief packages that sent $537 million to the state to distribute to renters who faced economic hardship as a result of the pandemic and were behind on rent or utility payments.

The program got off to a rocky start as Minnesota Housing grappled with administering a program ten times the size of its annual budget, with two sets of rules for spending the money, since the program was funded with two separate COVID-19 relief packages.

The slow rollout of the program and tedious application process — mandated by federal oversight requirements — drew the ire of both landlords and tenants, some of whom owed tens of thousands of dollars in rent.

Frustration with the rollout of RentHelpMN has made Ho a potential target of Senate Republicans, who have delayed confirming many of Gov. Tim Walz’s commissioners for years to retain the power to sack them throughout his term.

Draheim says his committee received “inconsistent and incomplete data” during two hearings with Ho updating lawmakers about the program.

For example, Draheim pointed to one hearing in which Ho shared a slide (page 12) that said her agency had made $374.3 million in rental assistance payments to 48,079 households through Feb. 4. In the very next slide, Ho presented a graph that showed the agency paid out $365.4 million in payments to 57,441 households through Jan. 31.

“The slides demonstrate a difference of almost $9 million more in rental aid but 9,362 fewer household payments in four days,” Draheim wrote in a statement on Friday.

Asked about Draheim’s statement, Minnesota Housing spokeswoman Jill Mazullo explained why it appeared the agency distributed less money to more people from one slide to the next: The first slide showed payments through Feb. 4 to “unique households”; households that received multiple payments were only counted once. The second slide reflected all payments through Jan. 31 and didn’t distinguish between households that received more than one payment.

Through the spokeswoman, Ho wrote, “I stand by my numbers. I’d be glad to appear again if the committee would like.”

Draheim also said Ho has not accounted for roughly $12.5 million of the $537 million the state received. The state has about $21.5 million left over for “housing stability services” once it pays out $450 million in direct rental assistance payments and $65.5 million in administrative costs.

But Draheim notes the housing agency has only put out $9 million in requests for proposals for organizations to help people avoid evictions or find housing.

Asked about the gap, Mazullo said the agency has until 2025, and the current request for proposals “is the first of several possible RFP issuances for housing stability services.”

Minnesota Housing announced it would stop accepting applications for the RentHelpMN last month, giving just three days notice of the deadline.

Draheim pointed to inconsistencies in the agency’s timeline for sunsetting the program. Mazullo told the Rochester Post-Bulletin that the program “will likely sunset at the end of the first quarter of this year.” Just days after the article was published, Ho told Draheim she didn’t know when RentHelpMN would reach a number of applications that exceeded available assistance. Five days after that, Ho announced they would stop accepting applications at the end of the week.

“The confusing answers and timeline of events from Housing Finance Agency points to one thing: We need a full legislative audit of RentHelpMN,” Draheim wrote in the statement. “We all share the goal of helping Minnesotans achieve housing stability, however, (Minnesota Housing’s) actions call into question their ability to accomplish this.”

The Office of the Legislative Auditor is a nonpartisan watchdog group within the legislative branch of state government. The Legislative Audit Commission, made up of Republicans and Democrats from both chambers, determines which government programs to audit. The commission will review Draheim’s request for an audit along with those from other lawmakers and make a decision this spring.

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Max Nesterak
Max Nesterak

Max Nesterak is the deputy editor of the Reformer and reports on labor and housing. Most recently he was an associate producer for Minnesota Public Radio after a stint at NPR. He also co-founded the Behavioral Scientist and was a Fulbright Scholar to Berlin, Germany.