Meeting the Challenge of Investing Public Money Wisely, Quickly, and Efficiently

BY STEPHEN GOLDSMITH • May 9, 2022

This article originally appeared in Governing Magazine.

Cities are at an important inflection point: They are still responding to COVID-19 while also trying to repair damage from centuries of racially driven policies, all while managing massive new pandemic relief and infrastructure funding from the federal government.

Local governments face these issues on top of their traditional duties, and this amount of work exceeds capacity in even the best-managed cities. Local and state governments have more money than ever thanks to the hundreds of billions in federal aid and growing tax revenues, and while having resources to spend beats the opposite, the challenge of investing public money wisely, quickly and efficiently presents its own host of challenges.

Last fall, when federal pandemic-related policies prohibiting eviction were ending, the debate appeared as one that pitted struggling tenants against their landlords. Yet even as the policy arguments played out on how long evictions should be prohibited, little was written about the often-neglected supporting actor in the drama: the local and state governments tasked with distributing billions of dollars in rental assistance money.

By spring 2021, Congress had in total appropriated more than $46 billion in rental assistance, yet as the eviction moratorium wore down in August 2021 more than $38 billion remained unspent. As the media portrayed the human plight of eviction or home/property loss, the often-unasked question was, “What is keeping officials from getting the funds to those in need?”

Unfortunately, the capacity to respond to a new, even urgent demand, is often restricted by risk aversion and other habits that limit imaginative management at the state and local government level. Too often in administering programs, government looks only to those with specific subject-matter knowledge — such as a housing department to assist with the eviction funds — rather than including those who have expertise in fund dispersal in unrelated programs.

The Indianapolis example presents a creative alternative model, applicable not only to evictions but to the distribution of other kinds of funds. At the request of Mayor Joe Hogsett, Deputy Mayor Jeff Bennett asked an important set of questions: What agencies or nonprofits have a presence in the communities and have the confidence of those living there, and of those organizations which have experience distributing public funds? These questions led him to the city’s community center network, which had experience administering benefits from the Low Income Home Energy Assistance Program, a federally funded program through the U.S. Department of Health and Human Services that helps eligible households with heating and cooling costs.

While the energy assistance team had no experience with eviction prevention, it did have a template for fund distribution. Running on limited time, as the city wanted to assist renters and landlords as quickly as possible, Bennett and his team built an application using the template from the energy assistance program that relied on 13 community centers and other partners to help spread the word about the available eviction assistance. The city concentrated on high-eviction ZIP codes, Bennett said, in order “to bring additional on-the-ground resources and targeted outreach to those tenants that lived in those ZIP codes.” Between the June 2020 City Council appropriation and July 13, when the city launched its IndyRent Assistance Portal, the team worked tirelessly to adapt the energy assistance model and spread the word around the designated communities. Consequently, Indy quickly distributed more than $33.8 million to nearly 16,000 families in just five months.

Of course, distribution also depends on how cumbersome the application process is, which ties into both risk tolerance and screening procedures. One factor affecting all emergency aid programs involves the risk of fraud and the accompanying media embarrassment. Bureaucracies face difficult challenges in balancing the need for speed in distribution with the need for appropriate documentation. So how does government get the money out as quickly as Indy did while minimizing possible fraudulent claims?

Here again, the model of using well-respected neighborhood intermediaries, coupled with a procedure that required limited but necessary documentation, was highly effective. Indianapolis erred on the side of action. “We could not let the risk of an occasional issue get in the way of our need to react quickly to the massive community need,” Bennett said. “We decided to act quickly but we do utilize behind-the-scenes fraud prevention measures as best we can to ensure integrity.”

In an imaginative government, crises are also an opportunity to get in front of an issue, which in this case meant preventing eviction in the first place. As Bennett noted, “The further out front of an eviction filing or hearing, the more opportunities we have to reach the vulnerable tenants with rent and legal assistance to prevent that loss of housing.” In Indianapolis, city leaders worked on sharing data across agencies to identify neighborhoods with high numbers of evictions. The process was helped along by the early successes in 2020, which served, in Bennett’s words, “as proof of concept, which has led to robust data sharing” from the small claims courts that deal with eviction proceedings.

Indy and other cities need access to ever more precise information to help identify families behind on payments and headed for trouble. In many cases, for example, utility companies can identify families in high-risk areas who are 60 days or more and behind on their payments. With this more precise data shared across agencies and organizations, local workers can reach out in advance of a potential eviction to families that would benefit from rental resources, credit management and legal assistance. In Indianapolis, Bennett said, tenants are notified by the city “sending a postcard that says, ‘It’s come to our attention that you may be the subject of an upcoming eviction proceeding. Go to indyrent.org and apply for rental or other assistance.’”

Leaving money on the table, particularly funds meant to aid those in critical situations, is a failure of good governance, but also an ethical issue. Too often city lawyers make it difficult to access such information, but workarounds exist. And urgency requires creative approaches that streamline processes and work across departments to find allies and examples, both of models that move quickly and ones that minimize abuse. Cities are able to fight a snowstorm by deploying workers and sharing data from multiple agencies, so they should take this lesson to the emergency of evictions.

About the Author

Stephen Goldsmith 

Stephen Goldsmith is the Derek Bok Professor of the Practice of Urban Policy and the Director of the Innovations in American Government Program at Harvard's Kennedy School of Government. His latest book is Growing Fairly: How to Build Opportunity and Equity in Workforce Development.

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