- The Delaware State Housing Authority is attempting to claw back about $1.6M in overpaymenrts of emergency rental assistance doled out during the pandemic.
- The overpayments amount to about 1.2% of the more than $135 million in rental assistance provided.
- The state has recouped $171,899 so far since starting its efforts in May.
- Delaware landlords are warning of evictions as a result, and so far 171 of them have appealed the state’s request to return the overpayments.
As Delaware attempts to claw back about $1.6 million in overpayments of emergency rental assistance, landlords are preparing to push back and warning that evictions will rise as a result.
The Delaware Housing Assistance Program, managed through the state housing authority, doled out more than $135 million in emergency rental assistance during the pandemic to help keep people in their homes.
The money was made available by the federal government and had limitations in its use, one of them being that a household was eligible for up to 18 months of rental assistance.
Laurie Stovall, director of public relations for the Delaware State Housing Authority, said the authority had a process for catching overpayments that was “98% effective.” The amount Delaware is seeking to be returned is only 1.2% of the total funding handed out by the rental assistance program.
“We were giving out over $2 million a week because we understood the emergency. During that time, these overpayments occurred,” Stovall said. “When you look at the program as a whole, the funds being recouped now is 1% of the funds actually distributed.”
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But Delaware’s landlords aren’t convinced, and some have warned that eviction filings and debt collections will follow as property owners attempt to recuperate the overpayments from tenants.
The Delaware Apartment Association earlier this month requested its members fill out a survey on how they are responding to the housing authority’s clawbacks and determine whether the lobby group should take an official stance.
Reached Wednesday, association President Annemarie Hobson said members want to work with the state housing authority “in coming to a better solution than us just throwing money back at DEHAP.
“I can tell you we have received the requests, and in some cases the requests are inaccurate,” Hobson said. “We have provided details for those where they were not overpaid and those appeal requests were denied.”
How landlords are responding
Rental property owners can appeal the state’s request to return overpayments in writing to the state housing authority.
Stovall said 171 landlords so far have submitted appeals.
But landlords say the state’s requests aren’t always accurate, and when they’ve tried to appeal the request, it’s denied.
Hobson said she contacted state officials throughout the pandemic for reassurance that adequate oversight was being performed to ensure overpayments did not occur. To have received letters seeking to claw back the money has been frustrating, she said.
While the majority of rental assistance payments went directly to landlords, the property owners indicated they’ll seek the money from their tenants.
“When we pay back to DEHAP we are going to have to immediately charge it back to the resident who is going to be immediately at risk for eviction,” she said.
The clawback first began in May with letters sent to landlords the state found received overpayments. So far, Delaware has recouped $171,899, Stovall said.
What can renters do?
If a renter is facing eviction due to the clawbacks, Stovall said there are programs that can assist.
The Eviction Defense Project, which is also funded by federal emergency rental assistance dollars, provides eviction resources and connections to pro bono lawyers to help with cases.
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The Housing Outreach and Stability Services program, which will launch in August, connects renters to community outreach partners who can help families maintain or obtain housing, among other resources.
Tenants can also reach out to the Delaware State Housing Authority for more information.
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The housing authority has alerted the Justice of the Peace Court − where evictions take place − to the overpayment clawbacks, Stovall said, and is working with the federal government and community partners on potential alternative resolutions.
“We are exploring all options,” she said.
What’s the status of the rental assistance program?
The rental assistance program closed to new applications in early January, unless a case was submitted by a community navigator, Stovall said. The latter avenue closed June 30.
Delaware will continue outreach to landlords through the summer, and the housing authority aims to collect as much in overpayments before September 2025, when the federal rental assistance program ends, Stovall said.
Got a tip? Contact Amanda Fries at afries@delawareonline.com, or by calling or texting 302-598-5507. Follow her on Twitter at @mandy_fries.
