Mayor Lori E. Lightfoot introduced to City Council today an ordinance to raise the contract spending cap for the City’s Emergency Rental Assistance Program (ERAP) software contract by $600,0000. ERAP is a federally funded initiative designed to respond to housing instability caused by the COVID-19 pandemic and administered by the Department of Housing. In a 925 amendment passed in March 2021 (SO2021-747), the City Council authorized the Commissioner of Housing “to execute the ERAP Software Contract with Unqork Inc,” “for an amount not to exceed $600,000 for a one-year term, renewable for an optional, maximum additional one-year term if ERAP is extended.” Council justified this direct contract authority “given the deadline for the expenditure of ERAP funds,” “which grant funds may be subject to recapture by the Treasury if 65% is not used by September 30, 2021.”

DOH is requesting an additional $600,000 to cover the cost of software for the first round of ERAP or ERAP1. At the time the SO2021-747 was passed, the second round of funding, ERAP2 had been approved by Congress just days before, and its implications, such as the amount of funding Chicago would receive, were not yet clear.

DOH launched ERAP applications on May 24, 2021. DOH received nearly 27,000 applications during the three-week application window. To date, DOH has funded over 12,000 households with more than $82 million in rental and utility assistance through ERAP. As of the end of November, 100% of Chicago ERAP1 funds were obligated, and DOH began to use ERAP2 funds to cover remaining eligible applications. Due to the City of Chicago obligated 66% of its ERAP1 funds by September 30, 2021, it qualified to request additional ERAP1 funds being reallocated by the Treasury from underperforming jurisdictions. DOH has requested an additional $27 million in the first round of reallocation.

In December 2021, DOH opened another application round and received over 12,000 from Chicago tenants and landlords. In addition, beginning in October 2021, DOH began administering a court-based ERAP, with case managers embedded in eviction court zoom rooms to perform intake of tenants and landlords with active eviction filings. More than 250 evictions have been avoided with court-based ERAP grants.

While Council justified the emergency procurement authorization via SO2021-747 due to the looming ERAP1 deadline of 65% spend by September 30, 2021—which, if the City had failed to meet, could have meant federal sweeping of funds—the City finds itself in a similar position concerning ERAP2. The City must obligate 50% of ERAP2 funds—or $50 million— by March 31, 2022, or risk fund sweeping. Moreover, even after March 31, 2022, the ability to quickly process funds will be crucial to the City’s ability to claim funds swept by Treasury from other, underperforming jurisdictions. Given the demonstrated level of need, the City cannot leave these funds on the table.

With Council approval of this vendor cap increase, the “ERAP Software Contract” with Unqork will cover the funding needs for the rest of the one-year term, and a one-year extension authorized by SO2021-747 will prevent any sweeping of unallocated funds and allow DOH to continue to assist renters in need. 

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