EXPLAINER: South Dakota has $315M to aid struggling renters

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UPDATES: Retransmitting a story that was originally published on June 25. With AP Photos.

SIOUX FALLS, S.D. (AP) – A federal freeze on most evictions that was enacted last year is scheduled to expire July 31, after the Biden administration extended the date by a month. The moratorium, put in place by the Centers for Disease Control and Prevention in September, has been the only tool keeping millions of tenants in their homes. Many of them lost jobs during the coronavirus pandemic and have fallen months behind on their rent.

Landlords successfully challenged the order in court, arguing that they also had bills to pay. They pointed out that tenants could access more than $45 billion in federal money set aside to help pay rents and related expenses.

Advocates for tenants say the distribution of the money has been slow and that more time is needed to distribute it and repay landlords. Without an extension, they feared a spike in evictions and lawsuits seeking to boot out tenants who are behind on their rent.

As of June 7, roughly 3.2 million people in the U.S. said they would face eviction within the next two months, according to the U.S. Census Bureau’s Household Pulse Survey. The survey measures the social and economic effects of the coronavirus pandemic every two weeks through online responses from a representative sample of U.S. households.

Here’s the situation in South Dakota:

WHAT’S THE STATUS OF EVICTION MORATORIUMS IN THE STATE?

South Dakota does not have its own eviction moratorium, leaving only the CDC moratorium.

WHAT’S BEING DONE TO HELP PEOPLE FACING EVICTION?

South Dakota has received $360 million in federal funds to help tenants with outstanding rent, utility payments and other expenses. The money can go toward 15 months of rent and other expenses, including internet access. Renters who pay 30% of their income toward rent and earn 80% or less of their area’s median income qualify.

So far, only a small fraction of the funds have been sent to renters. The South Dakota Housing Development Authority, which oversees the funds, estimates that it has distributed about $10.7 million to 1,475 tenants.

Brent Thompson, the executive director of East River Legal Services, said there is a lack of awareness about the federal assistance available for renters facing evictions.

HOW ARE THE COURTS HANDLING EVICTION ACTIONS?

Thompson said during the CDC moratorium that courts have halted many eviction actions or landlords have decided not to file them.

Eviction filings have dipped during the pandemic. According to the state court system, evictions decreased by about 10% after the pandemic hit in March 2020. This year, evictions filings have been even lower, decreasing by about 22% from pre-pandemic levels.

HOW AFFORDABLE ARE THE STATE’S MAJOR RENTAL MARKETS?

South Dakota’s rental housing market has tightened, partly due to the strong economy and a shortage of affordable housing. From 2015 through 2020, rent for a two-bedroom apartment in Sioux Falls, the state’s largest city, increased by 17%, according to the U.S. Department of Housing and Urban Development. The state’s vacancy rate was about 7% before the pandemic, which roughly matched the national average.

Data on rental housing during the pandemic hasn’t been released yet. But lawmakers have sounded the alarm about a run on affordable housing during the pandemic and formed a special committee to try to find solutions to the problem. Republican Rep. Roger Chase, who also works as a realtor, said this month that the housing market is as tight as he’s seen in over 30 years.

ARE EVICTIONS EXPECTED TO CREATE A SURGE IN HOMELESSNESS?

It’s hard to say how much homelessness will increase in South Dakota. Thompson, of East River Legal Services, expects evictions and eviction-related lawsuits to spike after the CDC’s moratorium ends. One indication of the scope of the problem is census data estimating that there are 21,500 adults in the state who are not confident they will be able to pay next month’s rent.

Thompson feared the moratorium’s end would create a “crisis event” in evictions, and his legal clinic is bracing for a surge in people facing evictions or owing multiple months of rent.

“Housing was already a very serious problem and you are adding literally a natural disaster that is a worldwide pandemic,” he said. “It’s just the perfect storm.”

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