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Hundreds in Billings face homelessness as pandemic-era housing aid expires

Advocates flag misspending by motels
Hotels and homelessness
Posted at 4:55 PM, Mar 01, 2023

BILLINGS — Thousands of Montanans are facing homelessness as the expiration of pandemic-era federal housing assistance looms on the horizon.

With no 'silver bullet' for the situation, Billings city leaders and housing advocates are calling the situation one of the biggest crises the city will face this year.

"We are seeing the crush of it," said Kari Boiter, board president of the Yellowstone County Continuum of Care.

The crush of it for Billings is an estimated 1,600 people living in local motels who may end up homeless when the Montana Emergency Rental Assistance (MERA) program ends at the end of March.

MERA funds come from the American Rescue Plan Act of 2021, which gave about $200 million to the state of Montana to use for emergency rental assistance to keep people housed in rentals during the fallout of the COVID-19 pandemic.

During the 2021 Montana legislative session, lawmakers tasked the Montana Department of Commerce with distributing this money, and MERA was born.

The Department of Commerce tells MTN that more than $117 million was distributed to 13,043 households across Montana, but the program is no longer accepting new applicants as of January. With assistance granted in three-month increments, this sunsets the program at the end of March.

This includes ending a big pool of money for people who found a solution to their housing problems by living in hotels.

"So essentially what they did is they said, 'if you cannot find housing because there's no housing available, if you've exhausted all of your housing options, we will allow you to stay in a motel and we will pay for three months at a time up to 18 months for anybody who needs to stay housed in this temporary manner,'" Boiter said.

"And people got wind of that."

Boiter said people came from around the state to Billings, where many motels agreed to accept MERA funds, paid directly to the business by the Department of Commerce at a rate of $2,200/month, in three-month chunks.

"So you're talking about $6,600 for a three-month period. And sometimes folks wouldn't stay in the motels for the three months. Sometimes it would be because the motel might kick them out early. Sometimes it might be that they leave," Boiter said.

"Those motels were required to give that money back to the state to be disbursed back out to others who needed it. And that did not happen."

Boiter says housing advocates began to raise the alarm to the Department of Commerce in August but did not feel like they were taken seriously until January, when the 2023 legislative session began.

"Really it was when by that point, MERA had seen the problem," Boiter said. "They had red-flagged certain motels that had not paid back amounts that had gotten so excessive that MERA said, if you don't pay back this fund, we won't let you motel anyone else."

Mitch Staley, with the Department of Commerce, says the department reviews all reports of overpayments and has prevented $49 million in potential fraud while allocating the funds.

Staley says the department is working to collect payments that have been made that should be returned.

Mervin Lewis used MERA funds to live at the Econo Lodge on Midland Road in Billings.

“You gotta do your own cleaning and all that. They’re not too punctual on housekeeping for bedding and towels. There’s zero tolerance and you can’t sit in your car outside. It’s a little bit too far-fetched," Lewis said.

Lewis says the hotel was charging him $500 a month on top of his MERA allocation to stay at the hotel.

In January, the Department of Commerce changed the rate at which hotels were paid by MERA to house people from $2,200 per month to $1,200 per month, leading a lot of hotels to no longer find it profitable to house people long-term.

“People need a place to live," Lewis said.

In trying to add accountability to the program and trace where the money went, Rep. Mike Yakawich, a Republican from Billings South Side, is carrying House Bill 523.

Billings lawmaker seeks transparency as rental assistance expiration looms

"The community members who are involved a lot in housing are on one hand very grateful for MERA funding. It has helped a lot of people find housing," said Yakawich.

"On the other hand, there's been a lot of questions about where is the money going? Are we being accountable for that money?" he added.

HB 523 would require the Department of Commerce to provide a list of businesses, property management companies, and landlords that received the funds, with amendments to protect individual privacy.

Yakawich says it's truly a constituent bill that Billings housing counselors approached him to carry.

And he's heard the same problems about motels receiving funding and not returning it to the Department of Commerce if a tenant leaves.

"That's another conversation we're having with the Department of Commerce, this whole idea of accountability for the money," Yakawich said.

Yakawich said the Department of Commerce has been helpful and supportive of his legislative effort.

HB 523 hit the House floor on Tuesday and passed its second reading 97-3, all but assuring it will be moved over to the Montana Senate for consideration.

Montana House votes on bill establishing MERA reporting requirements

MTN did ask the Department of Commerce for a record of what businesses received MERA funding, when, and in what amount, as well as specific hotels that may have not returned overpayments of MERA funds, but the department said that information cannot be disclosed unless Yakawich's bill passes.

In other parts of the state, housing counselors in Bozeman say their concern lies in apartments and rental houses.

"The situation is a little bit different in Bozeman," says Anna Stone, a housing counselor with the Human Resource Development Council in Bozeman. "We aren't working directly with as many people who are using MERA funds for hotel stays. We were more using it for folks we wanted to connect with permanent housing."

Stone says they helped over 600 households access MERA funds to help pay rent, security deposits and more last year.

Stone says it will be hard to keep people in apartments in Bozeman without the support and finding any kind of housing in the hot market will be a challenge.

"It was incredible to connect so many people to that assistance," Stone said. "It felt like a relief valve."

Back in Billings, advocates and city leaders are bracing themselves for the program's end.

“We have willing partners, and I think that's working to our benefit, but there's no silver bullet here," Boiter said. "But what we need is a lot of funding, a lot of collaboration, and some very clear parameters around how we move people in and out of the system in the future and never allowing this to repeat itself."