Costa Mesa to offer pandemic-strapped residents up to $6K in rental assistance

Costa Mesa residents struggling to maintain rent payments during the coronavirus pandemic may soon have access to some financial relief, after City Council members approved on Tuesday two agreements for the administration of a citywide rental assistance program.

The city will contract with Costa Mesa’s Serving People In Need and Santa Ana-based Mercy House Living Centers to administer $668,658 in COVID-19-related community block grants granted to Costa Mesa through the federal CARES Act.

In turn, the nonprofits will have the ability to issue checks directly to landlords and property managers. Assistance is available for up to three months’ rent or $6,000 per household, whichever is less. SPIN will serve households with children, while Mercy House will serve individuals without children.

Together, the nonprofits estimate they will be able to assist up to 55 households in Costa Mesa with this first round of funding.

City staffer Mitch Nieman said funds can be applied for rent that is in arrears as far back as April 1, to help people who became unemployed or underfinanced at the beginning of the pandemic.

“We were hearing a lot from our nonprofit partners — their ears were to the street, and they were talking about rental assistance becoming a greater concern for a lot of members of our community,” Nieman said.

The program will accept households with income levels at or below 80% of the area median income. In Orange County, the 80th-percentile income is defined as $71,750 for one individual, $82,000 for a household of two, $92,250 for a family of three and $102,450 for four, according to city figures.

Individuals or households already receiving rental assistance through other means, such as Section 8, will not be eligible for this program.

The city advertised for groups to administer the grant funds and received just two bids from SPIN and Mercy House, Nieman explained, two nonprofits who already had experience operating similar programs in the area.

According to the agreements, SPIN will receive $207,000 to administer assistance, while the city will pay Mercy House $180,231.

Crunching some numbers, Mayor Pro Tem John Stephens subtracted the administrative costs from the city’s $668,658 first-round coronavirus block grant funding and determined only the remaining $281,427 would be going to families.

“Are we essentially paying well over half of the money we’re receiving from the federal government to administer the money that we’re receiving?” he posed.

Asst. City Manager Susan Price explained both organization’s proposed fees are within the 15% recommended by the U.S. Department of Housing and Urban Planning and would be applied toward the organizations’ staff time. Nieman said those staff members would not only cut checks but also audit income statements and interview landlords.

“They have to do their due diligence before they issue any payments, and what we pay in administration pays for that due diligence,” Nieman said, adding that not all households would seek the maximum level of assistance.

Staff indicated the city is anticipating a second round of funding to apply toward COVID-19 grants, but did not put forth a specific amount.

Councilwoman Arlis Reynolds said, given forecasts predicting as many as 30% of renters could be financially at risk as the pandemic continues, securing assistance funding will be critical.

“I’d love to continue to learn more about opportunities to help the much, much bigger population of people who are going to need it,” she said. “This is truly a drop in the bucket and a very, very serious issue.”

Residents can apply for rental assistance by contacting: Serving People In Need (households with children) at (714) 751-1101 or spinoc.org; Mercy House (households without children) at (714) 836-7188 or mercyhouse.net; or by dialing 2-1-1 to contact 211 OC, 211oc.org.

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