The Tragic Results of Limited Governmental Capacity

ACORN ACORN International Foreclosure

July 27, 2021

            New Orleans      As the clock ticks to the final days of the national eviction moratorium and the beginning of what many predict will be the eviction tsunami, this housing crisis joins the long line of other crises we have experienced, including almost everything with the pandemic, as case studies in the results of shrinking governmental capacity.

I can hardly keep up with the numbers anymore, but the latest from Treasury is that only $3 billion of the more than $47 billion allocated in the various stimulus packages for tenant – and landlord – relief has been spent, even as the deadline is only days away.  There will be no 11th hour save this time because the administration only avoided a possible adverse court decision by agreeing that July would be the last month of the national moratorium.  Some cities and about ten states have done their own thing, but for the most part, we’re going to hit the wall that we’ve feared throughout the pandemic.

Who’s responsible, so they can be held accountable?  Too many, it seems, which means no one really, and that’s the tragedy of all of this as some landlords will end up in foreclosure and many tenants may end up on the street.

We can start by wondering why we are hearing about this ineptness from Treasury and not HUD, the government agency that has Housing as its first name and should theoretically have expertise in this area?  How can it be that HUD with regional and local offices and related authorities almost everywhere doesn’t have the capacity to get this job done?  But, starting there still keeps us from finding an answer.

Huge chunks of money were funneled through local nonprofits, social service, and community development agencies.  The Wall Street Journal quoted an executive at the United Way of Greater Kansas City, responsible for getting out $30 million, as saying, “The capacity to process applications does not match the volume of need.”  They – and others – blame the income verification process, but that is fairly minimal:  either paystubs for two months or last year’s tax return.  Why would a nonprofit accept $30 million, if it didn’t have the capacity to do the job?

The same problem exists with states.  In Arkansas, the Department of Human Services oversees rental assistance.  A spokesperson claimed that they could turn around an application in ten business days, but tenants in Arkansas have found themselves waiting for months.  They say that they “understand the sense of urgency to get the money out the door and are working every week to refine and improve the process.”  Really?

Here is the problem we find in crises repeatedly.  The neoliberal shrinking of the public sector has left them limited in their ability to respond to any emergencies be they housing, health, fire, floods, or whatever.  Political divisions and ideological arguments about shrinking government and supposed waste end up privileging the private and nonprofit sectors in order to escape accountability rather than beefing up public authorities to meet the need.  We saw the same problem more than fifteen years ago with Katrina and the Back Home program.  The state was so afraid of making a mistake on some payment that the program was delayed so long that thousands lost their homes and the ability to return.  In the pandemic, we hear stories of public health professionals who have worked 16-hour days for 18-months because they don’t have the authority from state legislators or city councils to hire the people that they need to do the job.

All of this should have been the perfect storm for organizing both tenants and small landlords to storm the barricades to demand relief and the expenditure of billions already allocated for just such purposes.  Instead, there’s almost no action.  No one is responsible.  No one is accountable.  Where would protestors go to make their demands?  A United Way or local nonprofit?  Hardly?  A state agency?  Maybe, if they could find who is in charge in this privatized, outsourced, and scaled-down enterprise.

What a tragic mess!