Government at all levels lavished funding on housing amid the pandemic for fear people wouldn’t be able to make their rent on time. There were a lot of wide-eyed, big-hearted policies that aimed to keep people under a roof. But recent state audits showcase just how wasteful some of these helicopter-cash emergency measures were.
Case in point: the state’s pandemic-specific “Property Owner Preservation,” or “POP” program. It allowed property owners to be compensated for overdue rent owed by tenants affected by the pandemic.
Though the program sounded necessary, targeted and cuddly in theory, once implemented it was rife with waste.
Colorado’s Office of the State Auditor announced in a report late last month that an estimated $2.39 million was paid in error as part of the “POP” program. The program, authorized by the legislature in 2020, was intended to let the state’s Division of Housing “help stabilize the housing sector and reduce the risk of homelessness for vulnerable individuals affected by the pandemic.”
To some panicked policy makers in the spring of 2020, on paper, the program sounded sensible. That was especially the case for state officials and lawmakers who were happy to convince themselves they were doing something to remedy homelessness.
With the legislature’s blessing, the Division of Housing hurried to develop and implement the program in just a month. The division established eligibility requirements, “built” an online application portal, staffed the program and accepted applications.
When the program debuted last summer, it was every big-government type’s fantasy: a new model (emphasis on “new”!) that allowed property owners, rather than tenants, to apply for overdue rent. Nothing was left for state officials to do outside of letting the “free” cash rain down to save the economy and prevent previously on-time tenants — and maybe their landlords, too — from having to live in a tent in City Park.
From July 2020 through March 2021, the period the state auditor examined, the Division distributed $47.13 million in state and federal funds via more than 23,000 payments to property owners. The program ended in June.
In their dive into the data, auditors found that for approximately one out of every six payments reviewed, the division paid around $16,000 more than allowed by the POP program’s own guidelines. The overages ranged from duplications, to payments that were not allowed, to covering unpaid rent incurred before the pandemic, to payments higher than requested, among other errors.
From that smaller sample size, auditors derived the larger $2.4 million waste estimate — 5% of the program’s total payments from July 2020 through March 2021.
How could the overpayments have occurred. It turns out the division did not always obtain a signed rental agreement prior to making payments. That was the case, auditors estimated, for about 7% of payments.
A whole lot of trust, not much verify.
And, the cherry on top? Astoundingly, auditors found the division did not send tenant notification letters to inform renters that an assistance payment had been made to the property owner on their behalf for roughly 11,000 payments — nearly half made through March 2021. And that fact only came out after auditors informed the division of a discrepancy when analyzing a smaller sample size, which found the division didn’t send timely letters for 17 of 60 files.
As is custom, auditors made a couple of “recommendations for improvements.”
But there’s a bigger lesson to be learned here — and it involves a variation of uber-politico and former Chicago Mayor Rahm Emanuel’s legendary advice to never let a crisis go to waste. Notably, a crisis almost inevitably leads to waste — at least, when government gets in on the action. The pandemic fostered more than a few panicked, confused and wasteful responses by the feds and the states on the dubious premise it was better to act rashly than be sorry later.
It’s a safe bet the kind of problem the state auditor uncovered suggests plenty more waste awaits discovery.
The people of Colorado who, all of last year, worked hard and paid rent and taxes while grinding through the pandemic should be livid the state did such a poor job. With its big-hearted, big-government, novel approach to the novel virus, the state flunked basic accountability safeguards.
As inflation continues to eat into our wallets and pocketbooks, we, the people, now must further scrutinize every last taxpayer dollar that big government threw at COVID-19.