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Housing

Thousands of Coloradans struggling to pay rent asked the state for help. $6.5 million later, phones are still ringing.

Nine months into the pandemic, Colorado’s housing assistance office spent $1 million to hire an out-of-state contractor to process applications for rent and mortgage help. The cost has grown as HORNE added 100 workers, of which slightly more than half live outside of Colorado.

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As the pandemic began affecting livelihoods last year, Stephanie Maney would sometimes catch a glimpse of her phone number on TV news broadcasts, news stories or communication from the state’s housing division or Gov. Jared Polis’ office. 

Sometimes it was 303-864-7852. Other times 303-864-7810. Sometimes both.

She was the only person answering calls from Coloradans desperate for pandemic housing assistance. Calls were forwarded to her mobile phone when the Colorado Department of Local Affairs switched to remote work. Maney, an administrative assistant in the rental housing office, tried to keep up as calls ballooned to five to 10 an hour, she said. But after a mention by Polis or in news stories, it was just too much.

“During those times, it would not be uncommon to get up to 30 calls an hour,” recalled Maney, who’d be awakened at night if she forgot to turn off her ringer.

Things are beginning to ease for Stephanie Maney after a stress-filled year working for the Division of Housing helping people with rental assistance during the COVID-19 pandemic. (Kathryn Scott, Special to The Colorado Sun)

When she learned the housing program would receive another $3 million through a Polis executive order in March 2020, Maney said she excitedly told a caller who was asking for help. The woman posted it on Facebook along with the phone number and it was shared and shared and shared.

“So then the call volume just exploded,” said Maney, who felt guilty about not answering every single call. “And then people were commenting in those groups, ‘Nobody’s answering the phone.’ Well of course, because I was on it.”

The backlog of people applying for housing assistance was so great that DOLA finally put out a request for help nine months after the statewide shutdown in March 2020. It hired HORNE, a Mississippi-based emergency services contractor, for nearly $1 million. But the price tag has continued to rise, according to the contracts obtained by The Colorado Sun through an open-records request.

TODAY’S UNDERWRITER

By the time HORNE started the job in February, Maney had taken a two-month medical leave to recover from the stress of her work, and roughly 21,000 requests for rent were pending. HORNE had a team of about 30 people processing applications. The group included three customer service agents taking calls and responding to emails at a wage of $65 per hour.

The backlog proved so overwhelming that in March, DOLA amended the contract to more than double the number of workers to 61 at an additional cost of $138,000. And then, due to a change in federal rules, DOLA signed an additional $5.3 million contract with HORNE, bringing the state’s price to $6.5 million, so far.

HORNE now has 100 people working on the cases, with slightly more than half of its staff based outside of Colorado.

As of June 1, the backlog of rent-assistance applications has been mostly worked through by HORNE, said Alison George, the state’s director of housing at DOLA. New applications are reviewed within two weeks and either approved, denied or moved to a pile that needs more information. The new submissions pile was down to 2,539, while the pile of cases missing information was at 7,877. Another 7,762 have been denied. And 31,616 were approved and paid.

“There’s not a backlog anymore. What we have now is a workflow. We’re going through about 2,500 applications every two weeks,” George said. “That has relieved a tremendous burden on both the state and our nonprofit partners.”

Colorado’s housing assistance program went into pandemic mode in March 2021 and applications for rental assistance have not stopped. The state Department of Local Affairs, which oversees the Division of Housing, keeps track of applicants and payments by status, county and race. For more details, visit the state’s Relief Housing Dashboard. (Screenshot)

State of state’s housing assistance

Colorado has long had multiple statewide housing assistance programs run by the Department of Local Affairs’ Division of Housing. The voucher program, formerly known as Section 8, provides rent subsidies to low-income households. But typically, the housing division works with local organizations, like The Salvation Army and Maiker Housing Partners in Adams County, to distribute monthly rent checks. 


Colorado’s housing assistance financial timeline

2020

$3 million: Polis orders $3 million from the state’s Disaster Emergency Fund go to DOLA for short-term rent and mortgage assistance during COVID-19 on March 20.

$10 million: Polis directs $10 million from the CARES Act for rent and mortgage relief on May 18.

$20 million: Sate lawmakers allocate $20 million from the CARES Act to DOLA for housing assistance programs in June.

July 15: DOLA adds the Property Owners Preservation for landlords. The Emergency Housing Assistance Program for renters and homeowners already existed. 

$54 million: State lawmakers pass emergency funding for housing assistance programs on Dec. 7.

$27 million: Amount state paid as of Dec. 11 to cover rent for 17,350 households.

$385.1 million: Congress passes Consolidated Appropriations Act on Dec. 27, providing Colorado with rent-assistance funds split between the state and 11 regional governments. Of that, $247 million went into the state’s program.

Dec. 31: Colorado eviction moratorium mostly ends, though the national ban from the Centers for Disease Control is extended.

2021

$1 million: DOLA hires HORNE in January to process the backlog of housing applications. Contract amended in March to increase staff. Total is now $1.1 million.

$304.7 million: Biden’s American Rescue Plan provides additional rental assistance funds to Colorado, with $196.1 million provided to the state and the rest to local governments.

$5.3 million: The federal relief funding add new income restrictions causing DOLA to revamp its rental assistance program to the Emergency Rental Assistance Program. DOLA signs second contract with HORNE.

$85.6 million: As of June 1, this is the total monthly rent or mortgage payments Colorado has provided to more than 33,000 Colorado households since the pandemic began.

June 30, 2021: CDC eviction moratorium expected to expire


That changed in July, when the housing division launched the novel Property Owner Preservation program, or POP, that let landlords apply online on behalf of multiple tenants. DOLA hired its own temp workers to handle the load. Individual renters or mortgage holders, however, were left with a more tedious process because they still had to apply through a local organization — typically by phone — to qualify for the Emergency Housing Assistance Program.

The Colorado Apartment Association praised POP because it was simple to use at a time state and national eviction moratoriums gave landlords no options for collecting rent. Once their tenants were approved, a landlord could apply online each month on behalf of all of them.

By Oct. 2, the state’s landlord program had helped three times more renters than the program for renters. Nearly $8 million went to landlords collecting rent on behalf of 5,000 households. The renter program, meanwhile, had paid out $2.5 million for about 1,200 households. Demand remained high. Funding was expected to run out by late December, according to a state special eviction task force report.

There were still delays and inconsistencies, especially later in 2020 as state funding was running out. Don Hamstra, chairman of Red Cloak Properties, said he heard about the program in August and his managers at four apartment buildings in Aurora and Colorado Springs applied. But in December, they were still waiting for a check for the Aurora complex. 

“It’s hard to get a hold of people at the state,” he said. “My nephew started calling them every week and they don’t call back.”

DOLA received another $54 million for the housing programs during a special state legislative session in December. And the Division of Housing went to work to set up an online portal for individual applicants since many local organizations had run out of money. But after the state eviction moratorium mostly ended Dec. 31, the system was slammed with applications, leading to more than $55 million requested between Jan. 4 and Feb. 8 — more than was requested in all of 2020.

And then the process got much worse, despite hiring HORNE.

More money was on the way, thanks to two federal relief bills passed in late December and March. The two relief plans sent $690 million to Colorado — $385.1 million from the Consolidated Appropriations Act and $304.7 million from the American Rescue Plan. Most would go to the state’s renter programs and the rest to 11 local governments to manage their own rental housing crisis. 

But the new funding had greater income restrictions on eligibility and was not available to mortgage holders. DOLA, which had already hired HORNE, had to change how its housing assistance programs operated. POP stopped taking applications and everything was moved to the new Emergency Rental Assistance Program, or ERAP.

Landlords with properties in any of the 11 local communities now had to apply in those jurisdictions, creating an inconsistent and slower process.

“The program was closed for more than a month for retooling creating a backlog,” Drew Hamrick, general counsel for the Colorado Apartment Association, said in an email. “There is a massive amount of federal money available for rental assistance, but it is getting much harder to get those applications processed.”

The federal rules don’t impact just the state but also local housing authorities receiving some of the $690 million. Peter LiFari, executive director at Maiker Housing Partners in Westminster, said it’s taking three to four weeks to process each application. He was surprised to hear that HORNE was down to two weeks.

“What’s happening is we’re spending countless more labor hours per applicant and it’s holding the whole system up,” LiFari said. “So if HORNE really is getting to that point, then they should share with us what their staffing plan is and share some of the key elements that have opened up or helped catalyze those greater efficiencies.”

If he could hire more staff, he would. He’s glad that DOLA was able to do so through a contractor to speed up the process for applicants. 

“I think it’s a smart move for the state to outsource that so that they can move a bit quicker and capitalize on the public-private partnership and to be able to staff up aggressively to meet the needs,” he said. “And it sounds like that’s what they’re doing.”

 

Bobbie Barr who was on unemployment since March 2020 was able to stay above water thanks to federal unemployment benefits and friends. But when unemployment benefits stopped after Christmas due to a delay in the state’s payments, her existing debt increased and her bills went unpaid. She applied for state’s renters assistance and after waiting three months, the check finally arrived. (John Leyba, Special to The Colorado Sun)

Elizabeth resident Bobbie Barr found herself stuck in that changeover when she applied for rent assistance in January. She simultaneously felt the financial double whammy of unemployment benefits put on hold as the state’s labor office reprogrammed its system to add new federal money. 

She checked in regularly with the renter program, giving the system a little push and a shove. She called, she emailed, she talked to the media. Her persistence finally paid off when her landlord received a check on April 13 for nearly seven months of back rent. 

As for May? “Oh, I paid for May because I got my unemployment back,” said Barr, whose struggles with getting unemployment benefits helped her find patience with the delays in the housing office. “I was a lot less stressed because I knew it was coming. I knew I was approved.”

The $6.5 million HORNE contracts

HORNE is used to dealing with emergencies. The company, which started as an accounting firm in the 1960s, sells disaster relief management. It provided program management and recovery services to Colorado after the floods of 2013 and wildfires in 2015, said the company’s proposal to DOLA.

“Why HORNE?” the proposal said. “HORNE has never been replaced, supplemented or fired.”

But the contractor hasn’t been without criticism. Over the years, HORNE has faced some pushback for billing state agencies more than the original contract due to additional fees and extensions. During the tragic West Virginia flood of 2016, the state’s $900,000 contract with HORNE turned into one for $17 million, according to a story by the Charleston Gazette-Mail.

The troubled rollout of a similar rent-assistance program in Texas this year elicited a scathing report by a Texas House committee after only 250 people had received rent help in two months despite 72,000 completed applications, the Texas Tribune reported

But the company has also been praised by government officials, including Steven Boand, state hazard mitigation officer for the Colorado Division of Homeland Security and Emergency Management Agency. He called their disaster recovery services “excellent” and “timely, on budget and professional,” according to HORNE’s proposal.

HORNE was among three bidders for the rental assistance program, according to DOLA. By the time HORNE started the job in February, the office was getting 200 applications a day.

According to the contract with the state, HORNE would take over the POP and existing renter programs, verifying that applicants and landlords qualified for the rent payments. The timeline was strict: HORNE’s teams must respond to applicants within 24 to 48 hours, approve at least $2.4 million in rent assistance requests per week and submit everything to DOLA to process payment within a week.

The initial contract, signed by DOLA executive director Rick M. Garcia on Jan. 27, put a price tag of $983,178 for five months of HORNE’s help, consisting of a team of 11 to 30 people.

HORNE’s rates to hire staff were between $65 to $200 an hour, though it’s unclear whether the contractor’s employees would make that amount. HORNE officials did not respond to questions about their participation with DOLA’s housing program.

HORNE LLC’s contract to process rent-assistance applications for the Colorado Department of Local Affairs including hiring a team comprised of 40% Colorado residents and hourly wages between $65 an hour for customer service staff to $200 an hour for the program director.

On the high end, a program director to oversee the effort would be billed at an hourly rate of $200. The bulk of the team would be application processing specialists to review and process applications at a pay rate of $110 an hour.

And then there were customer service workers billing DOLA $65 an hour to answer “phone calls and emails (and offer) assistance to people who have questions about how to apply,” according to the contract obtained by The Colorado Sun. According to state salary records, that’s about three times the amount Maney, the housing division administrative assistant, was making. 

But 30 people wasn’t enough. An amended contract signed by Garcia on March 8 bumped the number of HORNE staffers to 61 and added $150,000 in costs.

And then in April, because of changes to federal funding requiring a revamped renters program, a second contract was signed for $5.3 million so HORNE could take care of the new ERAP applicants and add a call center for six months. Staffing was set to “as needed.” This contract ends Oct. 30.

See the Colorado Department of Local Affairs contracts with HORNE for the state’s rental assistance programs:

Wendy Hawthorne, the state’s Deputy Director of Housing, said that about 100 people from HORNE now are working on processing rent-assistance applications. 

“We selected HORNE through a competitive process that indicated a total price to process a specified amount of rental assistance,” Hawthorne said in an email. “We did not select them based on hourly billing rates.”

The price of the contractor is small compared to funds the state is getting from two federal relief packages, George said. According to U.S. Treasury rules, no more than 10% of the federal funding can be used for administrative expenses. The $6.5 million fall well below the limit.

So far, the state is working through the first batch of federal relief funds. It started on March 28 and two months later, had paid out $4.8 million of the allocated $247 million, according to state housing data. During that period, 1,556 applications were approved and paid, averaging 173 cases per week. In the week ending May 30, HORNE paid out $1.1 million to 272 households. 

“You have to remember that we’re talking about $247 million of rental assistance, and approving an individual on a case by case basis,” George said. “We’ve approved over 31,000 payments. And so all of this is a very time intensive process and administering it.”

Overwhelmed and understaffed

Understaffed state agencies took a hit during the pandemic and that was felt in many departments that help Coloradans in times of need. Soon after the governor’s emergency shutdown order in March 2020, the unemployment office, for example, saw claims jump 50-fold compared with the 2019 norm. 

But even before last year, divisions were understaffed, said Hilary Glasgow, executive director of the state employees union Colorado Workers for Innovative and New Solutions.

“Before the pandemic even hit, the state was at a 20% vacancy rate. One in five jobs were unfilled,” said Glasgow, citing data from a presentation made to union officials by the state. “In Colorado, as the population has grown, we have actually decreased per capita state employees.”

Colorado has landed near the middle or pretty low in past comparisons of state employees per capita. In a 2014 report by Governing.com, the news site ranked Colorado as the ninth lowest, or around 63 employees per 10,000 residents. In a 2019 story in USA Today, Colorado ranked right in the middle at No. 25, but that included all government employees in the state. A Colorado WINS analysis of classified state workers based on state Workforce Reports shows a decline in the number of employees to 51 per 10,000 residents in 2019, from 66 in 2010.

This chart was provided by Colorado Workers for Innovative and New Solutions, the state employee union.

The state’s Division of Human Resources did not have the number of current or past vacancies for DOLA readily available. But according to the annual Workforce Report, the number of permanent classified employees at DOLA had been in decline since 2014, although it increased 1.75% in 2020 from 2019. 

Add all exempt, part-time and temporary state employees, the overall number has been on the rise for the last five years. But last year during the pandemic, the number of state workers dropped to 110,008, or about 1,000 fewer than in 2016, according to the March 2021 monthly payroll count report from the Office of the State Controller. 

No one thinks about the transportation department until they hit a pothole, Glasgow said, and the same holds true throughout state government. 

“The only time that that state service comes to light is when there is a glitch in that machine,” she said. “The pandemic and what happened at DOLA, heck at CDLE with unemployment claims, all of that is a result of having an underfunded state infrastructure.”

TODAY’S UNDERWRITER

There’s a certain type of person who chooses to work for state government. And it’s not about the money, she said, pointing to the recent “Annual Compensation Report” from the state Division of Human Resources. The report concluded that state workers were compensated 16.4% below the private sector, due to lower pay and retirement benefits.

Maney, who answered calls for the state’s rental assistance office, said she really liked her job and considered it a way to give back because she had benefited from federal housing assistance years ago.

“When I took this job, it felt like here’s my opportunity to give back,” Maney said. “I constantly was having to balance the expectation, internally, of what it meant to work for the state, like who am I really answering to? If my employer says the expectation is to return calls in 48 hours, but every single one of these callers is desperate right now, it makes it really difficult to feel that the workday stops at 5 o’clock.”

As head of the union, Glasgow had hoped DOLA contractors would hire Coloradans to help with rental assistance. But she acknowledged that this was a unique situation.

“When we’re hurting, we should reach out and hire our own, but we were in an emergency so I want to give some grace for that. We’re trying, everybody was trying to do the best that they could do as quickly as possible. I don’t love it. I would hope we don’t want to do business like that on a regular basis. 

In April, DOLA did add a requirement that HORNE hire local workers. The contract says HORNE needed to “make a reasonable effort to hire Colorado residents to fill 40% of new positions hired as a result of the contract.”

A DOLA spokesman said HORNE employs 43 Coloradans for the project.

George, with the Division of Housing, said that her department hired “a significant number of staff in 2020” and is now close to being fully staffed. The issue has been more about getting enough temporary staff. DOLA saw a slight increase in staffing by March 2021 compared to a year earlier, according to the monthly payroll report.

“You can’t hire permanent employees with six months of funding or four months of funding with the POP program,” George said. “That’s why we had to be reliant on temporary staff and existing staff.”

Back at work

Maney has returned to work at the Office of Rental Assistance. She still feels guilty. 

“I just felt so responsible and terrible that I was abandoning my posts,” she said. “But you know I just had to make the decision to live, to survive, to take care of myself because I was drowning and I couldn’t help anybody else.”

Even with offloading most of the calls to HORNE, Maney said her phone is still busy.  

“I get a lot of callers who are still trying to get information about things for HORNE, or they can’t get in touch with someone at HORNE so they call us,” she said. “Lots and lots and lots of people call because the check has our name on it.”

The Division of Housing is currently being scrutinized by the Office of the State Auditor, which is looking at the emergency rental program. There’s also a legislative audit to examine administrative costs. George welcomes the audits.

“There’s a lot of accountability and things that need to be addressed as a part of the expenditure of public funds to ensure that we’re really meeting the needs that are there,” she said. “And so we continue to look at what the needs are across the state, we continue to look at how we can improve the program and we are absolutely open to suggestions of ways that we can streamline things.”

TODAY’S UNDERWRITER

DOLA is creating a housing recovery office, with term-limited jobs, that has federal funding for three years. The new office will not only be for renters but also homeowners.

“We need the housing recovery office. We need them to be focused on the wise use of the funds because remember we also have the homeowner assistance funds and we’re developing a plan around the expenditure of those dollars,” she said. “We’re bringing on a consultant to develop a homeowner assistance fund plan because there’s $175 million that’s coming to the state that can be used for anything from mortgage assistance through downpayment assistance.”

Meanwhile, applications for the rental assistance program have started to slow, George said. She thinks it’s partly because the economy is improving and people are going back to work. It’s also because local housing authorities have money and are back to handling their residents. 

DOLA could amend HORNE’s contract, especially in anticipation of what happens after June 30, when the national eviction moratorium ends. 

“We have started to see a decrease in applications,” George said. “But with the eviction moratorium coming to an end we anticipate that there will likely be an increase again.”


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