Financial statements and discussions in the November and December meetings of the Covington Housing Authority Board of Commissioners indicated increased income loss for the authority due to declining rent payments, which Housing Authority Executive Director Steve Arlinghaus argued was reflective of national trends.
“It is a nationwide problem with the way things are going,” Arlinghaus said at the meeting on Dec. 20, one that may be compounded by possible federal policy changes to eviction procedures for public housing.
At the meeting, Arlinghaus presented statements in a newsletter published by the Public Housing Authorities Directors Association, a professional advocacy organization that represents the interests of housing authority professionals.
Arlinghaus read verbatim from the publication, which said that it based its conclusions on presentations given to them by Housing and Urban Development, or HUD, the federal government’s housing program.
“The most recent data show that housing authorities across the country continue to struggle with rent collections,” read Arlinghaus. “[The ratio] reflecting the proportion of rent that agencies cannot collect continued to increase in 2022, and 70% of housing authorities saw their [outstanding rents] increase from 2021 to 2022.”
In November, Arlinghaus stated that the main reason for lost revenue was tenants living in public housing failing to report income increases, which affects the amount of rent due to the housing authority.
“The income statements for the months of July through October, year-to-date, reflect a net loss of $111,000 total, whereas the budget for the same period is a net loss of $708,000,” reported Housing Authority Director of Finance Cynthia Hall in November.
Hall qualified that report with additional statements, however.
“We are managing the budget very effectively in that we are $596,000 ahead” of where the authority had expected to be this time of year, Hall said. Hall attributed this to funding reallocation from the authority’s capital fund as well as conservative budgeting strategies for Golden Tower, which has undergone several construction projects throughout the year.
The commissioners discussed the current procedures for collecting late rent–when eviction notices are posted, tenants have seven days to vacate the unit. If they don’t do this, the housing authority can then escalate the situation to court.
Likewise, the authority can contract with a collection agency to retrieve rents from tenants who move out but owe back rent, although Arlinghaus stated in November that this tactic isn’t often successful.
Moreover, statements from other authority staff members suggested that the authority tried to avoid such situations when possible.
“When residents and property managers work together and there’s a cohesive relationship, there is always a referral made to see if there is some kind of avenue where we reduce that barrier,” said Housing Authority Director of Resident Services Jon Adkins.
Chris Bradburn, the authority’s deputy director, affirmed that “we provide resources” to help people make their rent before escalating to more punitive measures.
One tenant came to the November meeting to share her concerns about additional rent payments that had been tacked onto her rent due to pest control problems.
The tenant claimed that exterminators sent to her housing unit had failed to address the problem, and Arlinghaus said that the extra rent fees were to offset the expense incurred by the exterminators. The tenant stated she planned on consulting with the Northern Kentucky Community Action Commission to get financial help.
Arlinghaus and the tenant disagreed about whether the housing unit was sufficiently clean, and the two were unable to resolve their disagreement within the context of the public meeting. The tenant did not come to the December meeting.
At any rate, Arlinghaus stated that HUD was considering making a new rule that would mandate housing authorities give a 30-day notice to tenants who fail to pay their rent before beginning formal eviction proceedings.
“This will exacerbate the situation we have when talking about non-collecting of rents,” Arlinghaus said, “another loss for the housing authority, and not just us but across the whole United States.”
Commission members wanted to know if the loss due to delinquent rents might be offset with more federal subsidies, and Arlinghaus said that HUD had not given any indication that more subsidies were forthcoming and that that would likely exacerbate the problem even further.
Commission Member Tom Haggard, who is also the President of the Covington Independent Public Schools Board of Education, chimed in about the potential rule change.
“I think logic behind it is trying to make sure people don’t become homeless,” Haggard said.
Arlinghaus agreed but said, “if they put us out of business in the process,” then what?
“You got to kind of have both sides of this conversation,” Haggard said.
A HUD representative did not attend either meeting, so the likelihood of this rule change occurring any time soon is unclear.
The next meeting of the Housing Authority of Covington will take place on Jan. 17, 2024 at 4:30 p.m. at the housing authority’s main office on Madison Ave.