Rental Assistance Program in Memphis, TN

[Jack Inman]

I’m curious to hear if rental assistance programs in other cities are operating in the same manner …. In Memphis the rental assistance program is a federally funded and offers to settle tenant account balances with landlords who are in the process of evicting tenants. Ex - If a tenant owes 8 months in back-owed rent, the program will pay that rent to the landlord, and the landlord would in turn have to drop the eviction suit and bring the tenant’s balance to zero. Originally, if a landlord rejected the settlement offer, then the tenant would be evicted for nonpayment of rent, and the settlement program would not pay out the amount to anyone.

Recently they implemented a new tactic – if the landlord rejects the settlement offer, then that settlement offer is paid directly to the tenant to be used towards finding new housing. The tenant is paid in proportion to how many months of rent they owe the landlord. It seems crazy that tenants who aren’t paying their rent are now being given checks for the dollar amount of rent that they didn’t pay. If a tenant didn’t pay rent for 10 months and accumulated 14k in rent, the program cuts the tenant a check for the 14k. And the program specifically tells these tenants not to use the money to pay back the landlord, but rather to use it on finding new housing.

I know some property management companies around town are refusing to settle with the program, because the program only pays contract rent amount and not late fees. Many property management companies keep 100% of late fees and aren’t willing to forgo that revenue stream. So, make sure make sure your property manager isn’t turning down settlement offers because if your property manager turns down the offer, the rental assistance program will just pay the money to your delinquent tenant.

Interested to hear if other cities are following a similar strategy.