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CARES Act

Renters are projected to need a lot more help than Louisiana is giving them

The gist: Offered as relief, the governor’s emergency rent assistance program has met little celebration from housing advocates, who are wary that the $24 million set aside is a pittance compared with the volume of estimated need. Housing advocates say avoiding a wave of housing instability in Louisiana, one of the poorest states in the country, will cost at least 10 times what the state has cobbled together. 

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Up front, the Louisiana Emergency Rental Assistance program will launch with $7 million and grow to collect $24 million in federal housing funds. The program will be centralized and managed by the Louisiana Housing Corporation. An income cap of $25,450 limits the program to the very poor. Louisiana’s median income is around $48,000.

A report circulated by housing advocates estimates Louisiana renters need $250 million through the end of the year. Metro Lafayette alone, according to that same calculation, would need more than twice what’s been offered by the program, and little money has been offered up locally. On Tuesday, the City Council will vote to authorize $200,000 in local rent and utility relief. 

“It’s like trying to soak up an oil spill with a paper towel,” says Leigh Rachal, executive director of the Acadiana Regional Coalition on Housing and Homelessness, of the resources thrown at housing so far. Her comments echo official statements from statewide organizations like HousingLouisiana, which issued a press release applauding the thought behind the program but questioning the effort. A $15 million program in Houston ran out of money in two hours. 

Critics further point out the billions in federal assistance handed out to small businesses in Louisiana alone. Around $8 billion flowed into Louisiana’s small businesses via the CARES Act, the multi-trillion dollar stimulus stood up in a scramble by Congress to prop up the American economy as joblessness soared. Businesses in Lafayette Parish collected $600 million in forgivable federal loans valued at $150,000 or more through that program. The Louisiana Legislature authorized another $300 million for its own Main Street Recovery Act. And Lafayette Consolidated Government opened a $1 million small business grant program with funding from the U.S. Department of Housing and Urban Development. 

Housing advocates continue to warn of a coming wave of evictions. Legal proceedings on evictions in Louisiana resumed in June, the first shoe to drop. But the looming July 25 end of a federal moratorium on evictions has advocates in suspense. Expanded unemployment benefits will end July 31, days after the eviction protections are lifted for many of Louisiana’s 600,000 renter households. And, to be sure, many mortgage holders could be in trouble too as incomes decline and mortgage relief dries up. 

“We’ve been talking about it for a long time because we knew that if we could find a solution” it would take a while to make it work, Rachal says. Rent programs based on federal dollars are notoriously slow, suggesting that even as applicants flock to the rent program’s website or blow up 211 for help, the money won’t come quickly for them, both gumming up the flow of relief and — in the worst cases — arriving too little, too late. 

Evictions have been abnormally low in Lafayette. The City Court docket has held steady at 30 filings per week since the eviction stay was lifted in June. Pre-Covid levels averaged around 60 evictions per week, according to City Court Chief Judge Doug Saloom. “I hold out the hope that those numbers don’t escalate,” Saloom says. 

It feels like a calm before the storm. The dire predictions from housing advocates are premised on sustained, high levels of unemployment. While ticking down, unemployment figures have remained stubbornly high, suggesting the astronomical costs of need worrying housing advocates aren’t so far fetched. Even at half the value projected, the scale would be historic. Louisiana has 312,000 continued unemployment claims, posting a small decline last week. The Acadiana region bucked the trend, bumping slightly up to just more than 36,000 claims. 

The early signs are there. More than 320 households, including many with children, are in hotel rooms secured as emergency housing by ARCH, Rachal says, and the number is rising. Beyond people showing up for help, advocates can’t see beyond the horizon to what’s coming. It’s unclear exactly how many people live in housing currently protected by the federal eviction moratorium, which covers any domicile that receives federal dollars — by voucher, mortgage backing or tax credit. Whatever that figure, it’s likely to dwarf the number that were covered by the state’s moratorium only. 

“I have a lot of concern that people might think that’s solved now,” Rachal says of the message the rental program sends. “And it’s not.”

Special session roundup: Business interests notch big wins as legislators assert independence

The Legislature staked out an independent course this session, calling itself into special session that produced policy wins for business interests

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Survey highlights initial impact of COVID-19 on Acadiana businesses

The gist: Acadiana’s businesses already feel widespread economic pain, according to a survey conducted by a coalition of local economic development and community organizations, including LEDA, One Acadiana and more. Of roughly 1,000 local businesses surveyed between March 19 and March 25, 91% expected revenue to decline. 

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91% of respondents expect revenue to be down. 72% of all respondents say they expect revenue to be down significantly.

The majority of respondents have already seen their businesses hurt, with order cancellations and decreased demand. As a result, a majority of respondents are watching spending closely and adjusting work schedules.

35% have already reduced staff or expect to. Another 32.7% are unsure if they’ll need to do that. An average of 64% have already reduced operational hours, shifts, work days, and/or wages, with that number increasing to 88% for those businesses who responded on the last day the survey was live.

More than 20% said they couldn’t make it a month given current economic conditions. Some couldn’t make it another week. Nearly half of businesses were unsure how long they could hold out. Here’s a breakdown based on how much longer they felt they could stay open given current conditions:

  • 7% one week
  • 22.2% one month
  • 8.8% six months
  • 2.3% other
  • 45.1% unsure how long
  • 14.5% other 

Respondents encompassed a variety of types, industries, and sizes of businesses, with more than half having 1-10 employees, more than 70% being located in Lafayette Parish.

The federal stimulus could help local businesses navigate these choppy waters. This survey was conducted before the federal stimulus package was passed, part of which is designed to keep small businesses afloat for a couple of months. Some of the responses to this survey referenced their hope this would keep them alive. The forgivable loans available to small businesses to retain staff are starting to take applications today. 

This coalition plans on conducting another survey in mid-April to track the ongoing impact of COVID-19. Full results of this first survey can be seen here.

Link: Banks urge patience as PPP rollout gets off to a rocky start

The ambitious $350 billion Paycheck Protection Program passed by Congress one week ago to help small businesses weather the coronavirus crisis rolls out this morning amid confusion and mixed signals.

Updated federal guidelines for the program were not issued until late Thursday night in a 31-page “interim final rules” document, just hours before the PPP was supposed to begin accepting applications, and most banks are still not ready.

Source: Banks urge patience as PPP rollout gets off to a rocky start

1A launches economic recovery toolkit

One Acadiana today announced the launch of a new Economic Recovery Toolkit for businesses facing economic hardship due to the coronavirus outbreak.

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Sheltering the unsheltered amid COVID-19

How do you stay safe at home if you don’t have a home? That’s the question Acadiana’s shelters for people experiencing homlessness are struggling with right now. Lacking adequate healthcare, those who are unsheltered are particularly vulnerable to COVID-19. Local shelters are already at capacity, and more people are becoming homeless each day. It’s a public health problem, according to advocates. 

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Hang tight, Lafayette, the money is coming

The gist: Last week, Congress hurried through an unprecedented $2 trillion stimulus to prop up the U.S. economy, unlocking billions in cash to patch the nation’s businesses and workers through weeks more of the social distancing guidelines freezing commerce. Everyone expected dollars would start flowing at the stroke of a pen, but the size and scope of the bill means there’s more to iron out, even as the federal government works to turn on the taps this week.

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Yes, the CARES Act is now law, but the rules aren’t really in place yet. The president enacted the stimulus when he signed it last Friday. But, for all of the bill’s provisions, the federal government still has to issue guidance on how the money flows. Some of this stuff is pretty straightforward, and the basic building blocks — who qualifies for what and for how much — are pretty well established. As disaster packages go, this one is expected to kick in pretty fast. The U.S. Treasury announced today that it expects to have the program up and running by April 3. 

In the meantime, we’ve been in something of an info vacuum. Many local banks, which will be the vanguard of the billions in cash available to small businesses, have been flooded with calls and are telling customers to gather info while they wait for federal guidance. IberiaBank recently sent out a notice to customers, offering a rundown of what it knows and prepping clients to hit the ground running once the rules are ironed out and the cash is available. 

“Information is changing by the minute and although we want to be helpful, we cannot be held responsible for any changes in the information going forward,” IberiaBank wrote to its customers, pointing to the fluidity of the bill’s finer points. In the meantime, IberiaBank suggests businesses gather the following info while queueing up.

  • Payroll tax reports for the previous 12 months 
  • Historical tax returns for three years 
  • Organizational documents 
  • A list of all entities owned by any 20% or more owner of the business 

Business groups have spun up webinars and one-pager resources. Some went up before the bill was even passed and as Capitol Hill continued to bandy the legislation around. Most of the dust has settled, but some key details are still in motion until the rules are formally promulgated and updated on the Federal Register. Beyond that, the longer term impact of the bill on Acadiana’s economy remains unclear. For instance, we’re not exactly sure how the stimulus will perform in propping up the region’s oil and gas industry besieged on two sides by an international price war and flatlined demand. 

“I’d give you $20 to answer that question,” LEDA President and CEO Gregg Gothreaux quipped when asked about that during a taping of the radio program Out to Lunch Louisiana this week. (The episode airs on KRVS Wednesday and Saturday.) Gothreaux commended the bevy of experts and business leaders pounding the pavement to pin down how the stimulus works and what it will do for the local economy. 

Around 35% of Acadiana businesses expect they’ll lay people off, Gothreaux said in the interview, relaying some returns from a regional survey of roughly 1,000 businesses. Figuring out which CARES Act provision works best for those businesses is essential to making the bill work, and the federal guidance is the last piece of the puzzle. Once that’s in place, CPAs and attorneys can point employers in the right direction. 

“Hang tight” is the best advice at this point. Stephen Waguespack of the Louisiana Association of Business and Industry has urged businesses to wait on the CARES Act’s Payroll Protection Program to activate before making any big decisions; that should happen this week, kicking in billions in forgivable loans for small employers. By government standards, this is moving at warp speed. Businesses are hurting now, but making the wrong decision could be costlier.