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Municipalities warn of impending crisis for 8,500 Maine households, with rent relief nearing an end

A for rent sign stands outside a building in Portland on Friday, May 6, 2022.
Troy R. Bennett
A for rent sign stands outside a building in Portland on Friday, May 6, 2022.

A legislative commission will recommend that the governor declare a state of emergency, as Maine's emergency rental assistance program is approaching its final days.

More than 8,500 households across Maine were receiving benefits as of last week under this program, which was designed to distribute federal relief money to people who needed help paying their rent or utility bills during the pandemic. It also put unhoused Mainers in hotel and motel rooms.

Now, as federal funds for the program dry up, municipalities across Maine foresee a humanitarian crisis in the making.

Recent data, compiled by MaineHousing for municipalities across the state, show the scope of the need, touching the largest cities and smaller rural towns.

Portland had 872 households receiving benefits between Sept. 1 through Oct. 25, while 100 households in Caribou were getting rental assistance.

In Presque Isle, where rental assistance is going to more than 250 families, deputy city manager Martin Puckett said many of those recipients have come in from smaller, surrounding communities.

"By having a homeless shelter and the various hotels, it's led to an in-migration from the outlying communities," said Puckett, who was one of several municipal officers who spoke before the Commission to Increase Housing Opportunities in Maine by Studying Land Use Regulations and Short-term Rentals on Monday. "Some of these smaller communities simply do not have resources like we do.

It's difficult to pinpoint an exact end date for the rental relief program, as community action agencies all have different amounts of funds remaining. But municipalities say they've heard there's enough money to keep the program running through November.

And state officials say they're working with community action agencies to give current rental relief recipients at least one month's notice that their benefits may soon end.

But municipal officials say that's not a sufficient strategy for those who may face eviction, especially when there's little available housing stock to begin with.

"The vacancy rate, anecdotally what I've heard in Bangor, in essence, is 1% or less," said city manager Debbie Laurie. "I think that's what you're seeing across the state. I don't think there's much movement in housing."

Bangor had 944 households receiving rental assistance benefits as of last week, and data show that the need for help is high in the city's surrounding communities.

In nearby Brewer, 172 families are rental relief recipients, with 147 and 107 households receiving benefits in Old Town and Orono, respectively.

MaineHousing compiled this data and shared it last week with municipalities, who asked the agency for a broad snapshot of rental relief recipients in effort to prepare for the program's end.

"There must be an exit strategy, and it can't fall to the burdens of municipalities, who just simply won't be able to handle that level of activity," Laurie said.

Once the program's funding is fully depleted, beneficiaries will be directed to apply with their towns for general assistance.

"The influx of people that will be coming to see me — it's a one person show here — will be incredibly overwhelming," said Jane Maynard, who works part time as Saco's general assistance administrator. "Friday alone, this past Friday, I received seven phone calls from people who were currently staying in a hotel here in Saco who found out just a few days before Friday that they were going to be evicted tomorrow."

Towns must process general assistance applications within 24 hours, and if they can't, the applicant can apply with the state Department of Health and Human Services for help. But when that happens, it's a considered a failure on the part of the municipality. Towns are billed for the expense and are required to pay 100% of the assistance with no reimbursement from the state.

Even if towns can process an influx of applications in a timely manner, the sheer cost of providing general assistance, they say, would be difficult to absorb.

In South Portland, 410 households are receiving rental assistance benefits, which doesn't include asylum seekers and refugees. Most rental relief recipients are living in hotels at a cost of roughly $7,200 a month, said South Portland city manager Scott Morelli.

He estimates that if everyone currently housed in a South Portland hotel today were to apply for general assistance, it could cost the city more than $15 million.

"That would be 15 times our traditional budget allocation for general assistance, and we'd need to raise property taxes 21%, just for that portion of the budget alone," Morelli said. "It's simply unsustainable."

General assistance won't catch everyone who's currently receiving rental relief benefits. The program has higher incomes limits compared to general assistance, and most rents today are well over the maximum allowed under GA, municipal officials say.

State officials say they're still trying to secure more federal funding, and it could come through by the time the legislature convenes in January.

"Conversations continue right now," said Greg Payne, senior adviser on housing policy for the governor's office. "It's entirely possible, MaineHousing and the CAP agencies are currently working to extend this, and hopefully can do so by a matter of months. We'll see."

But housing advocates say that's too late.

"If we were to do nothing or someone doesn't do something, we know we have a homelessness crisis that will blow up right before the holidays in the middle of winter," said state Sen. Craig Hickman, D-Winthrop, who is the co-chairman of the housing opportunities commission.

The panel is preparing its final report to send to the legislature, which will include a recommendation to the governor to declare a state of emergency. Doing so could create more flexibility for towns processing general assistance applications.

Other recommendations include providing more resources to towns to process general assistance applications, and an increase in the maximum amount allowed under GA for housing.

Hickman acknowledged that the recommendations are broad, and the commission has no authority to write legislation or provide funds to address the problem.

"We'll just throw everything on the wall and see what sticks," he said.

The panel will also recommend that Maine consider its own rental assistance program to replace the one that's ending.

But MaineHousing warns that any state-run replacement program will be expensive. Operation of Maine's existing emergency rental assistance program costs about $500,000 a day.

A report with final recommendations from the housing commission is due to the legislature in November.