Philadelphia Launches $30M Rental Assistance Fund Attached To Eviction Diversion Program

For the first time in a year, Philadelphians behind on their rent have a new chance to receive government financial assistance.

The city of Philadelphia has added a Targeted Financial Assistance component to its Eviction Diversion Program for landlord-tenant conflicts, with $30M allocated this fiscal year, it announced Tuesday. For qualifying cases, TFA will cover the entirety of a tenant's rent debt and an additional month's rent. The Philadelphia Housing Development Corp. administers EDP for the city.

Going forward, tenants and landlords who participate in good faith in EDP will be informed of their eligibility for TFA and given five days to apply. If both sides' applications are approved, the city will issue a one-time payment to erase the rent debt and give an additional month to help stabilize the tenant's living situation.

For tenants, good faith participation amounts to producing required financial information, appearing at EDP mediation hearings and attempting to address issues landlords raise at those hearings. For landlords, the standard is higher. To be eligible for TFA, they must:

— Provide evidence that they informed the tenant of their rights in the diversion program, as well as the current rent debt balance and any other issues causing the landlord to seek possible eviction.

— Provide current and accurate contact information for the tenant.

— Respond promptly to requests for communication from a tenant, a housing counselor or city-funded agency representative to resolve application issues or reach an agreement.

— Attend mediation sessions as scheduled. A landlord may be represented at those sessions by an agent, but that agent must have the information and authority to resolve disputes and make agreements. The landlord also needs to be reachable by phone during the session, should they be needed.

— During mediation, the landlord must make reasonable efforts to address all lease issues that could lead to eviction in addition to applying for rental assistance.

— Apply for TFA within five days of receiving notification from the city that they are eligible.

The Eviction Diversion Program was initiated by a city council act as an emergency response to the pandemic. The purpose was to prevent an avalanche of eviction filings, which can do permanent harm to a tenant's ability to find housing, regardless of a judge's decision.

The free, mandatory program has been extended several times, with the most recent laying the groundwork for it to become permanent. The 18-month October extension shortened the time landlords must wait to file eviction after beginning the EDP process from 45 to 30 days while expanding its application to all eviction filings rather than only those for nonpayment.

The October extension came with $45M from the city's budget for fiscal year 2023, including the $30M now made available for TFA, which WHYY first reported and Bisnow can confirm. To fund TFA, the city drew $15M from its Housing Trust Fund and $15M from its general fund, a PHDC spokesperson told Bisnow.

Cases that entered eviction diversion before the announcement of TFA will not be eligible for payments, the spokesperson said. TFA payouts are expected to begin within 30 days.

Once Philadelphia began receiving federal funds through the Emergency Rental Assistance Program, helping tenants apply for ERAP funds and directing landlords to wait for those applications to be processed became a central function of EDP. The Treasury Department highlighted Philly's EDP as a housing justice model for other cities to follow and granted the city millions of dollars in reallocated ERAP funds as a reward.

In all, Philly disbursed about $300M in federal rental assistance to 46,000 families before it ran out of funds, according to city data. Due to the massive shortfall in assistance compared to its need, Philadelphia shut down its program to new applicants last January.

The city's tenants have only gone deeper in debt on average since then, the Philadelphia Inquirer reports.

EDP continued to produce outcomes such as payment plans, less traumatic move-outs and other landlord-tenant agreements through mediation even when no money was available, the city's announcement stated. Over 75% of the 4,000 landlord-tenant pairs who have participated in EDP to date resolved their disputes out of court.

In the absence of further federal assistance, evictions rose all over the country late last year. Even in Philly, thousands of landlords have circumvented EDP and conducted illegal evictions since the pandemic began.

UPDATE, FEB. 1, 10:45 A.M. ET: This article has been updated with additional information from PHDC about the funding and rollout of Targeted Financial Assistance.