5 ways pandemic money helped, and failed, those in need

5 ways pandemic money helped, and failed, those in need

Illustration: Aïda Amer/Axios

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As the coronavirus caused economic ruin, lawmakers from the city to the federal level scrambled to deploy billions of dollars to help stave off some of the worst harm.

Financial assistance programs were created for small businesses, the entertainment industry, restaurants, foster youth, renters and others. And of course, there were the stimulus checks that helped keep millions of Americans afloat.

  • Undoubtedly, without that relief, the economic harm would have been far greater.

Why it matters: Still, the rapid pace at which aid was distributed often meant it failed to reach those who needed it most.

  • Truth is, while national headlines often capture the moment when huge spending bills are signed, it’s only the start of the process of making sure that money gets to those who need it.

This year, we’ve covered a lot of the ways the pandemic recovery efforts have left people behind. But we know it can be tough for anyone to follow all of the government programs that are out there. So, here’s a brief overview of how the programs have played out.

1. Rent relief

What’s happening: The federal government sent money to cities and states across the country to distribute to renters to help prevent a wave of evictions and homelessness.

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  • In Charlotte, nonprofit DreamKey Partners has been handling the rental assistance program. Since it started in 2020, they’ve handed out $84 million in aid to 20,832 households, according to Noelle Bell, a spokeswoman for the nonprofit.
  • Just under 3,000 households are still waiting on funds, she said in an email.

Yes, but: Housing advocates charge that the money has been flowing too slowly to tenants. I spoke with a woman in July who was nearly evicted before finally receiving rental aid five months after she applied.

The other side: The organization has ramped up staffing, and is prioritizing tenants who have been served an eviction notice and those at the lowest income levels. DreamKey has also noted that it is disbursing funding faster than other cities and states, many of which have struggled.

The bottom line: It came down to what was a common issue across all of the aid programs there was little existing infrastructure to disburse billions to people in need.

2. Paycheck Protection loans

Flashback: The Paycheck Protection Program launched in April 2020, and while it helped a bunch of small businesses survive, it also immediately was dogged with problems.

The money ran dry in 13 days, and some lenders initially would only process applications for existing customers. Business owners in Charlotte that I spoke to for the Charlotte Observer at the time were scrambling to figure out how to stay afloat.

  • Then, news emerged that national chains like Potbelly and Ruth’s Chris Steakhouse received loans (many of those companies, including Axios, returned the loans later).

Ultimately, the program did bring aid to many small businesses, providing just under $800 billion by the end. Local business owners like the owner of Blackhawk Hardware described the money as a godsend. In many cases, it helped prevent closures and layoffs.

But disparities persist: Black and Latino business owners were less likely to receive assistance than their white counterparts.

3. Foster youth

The stimulus package Congress approved last December allocated $9 million to states for direct payments to young adults currently or formerly in the foster care system.

  • North Carolina distributed the money to counties, which then handed out stimulus checks to young adults aged 18 to 26 who had been in the system. Those aged 18 to 20 were eligible for $2,500, and those 21 to 26 were able to receive $5,000.
  • But Mecklenburg County ran out of money to help all 813 youth who were eligible. As of November, only 155 were able to receive checks.

What they’re saying: The county says the state gave them just two weeks to distribute the money to youth before the federal deadline.

  • The state said it had to clarify how the money could be used with its federal partners. By the time that happened, there was little time left before the deadline.

The big picture: The majority of foster youth in Mecklenburg County, a group hit disproportionately by the pandemic, missed out on aid that could have made a big impact in their lives.

4. Arts and culture

The arts and entertainment sector was shut down longer than most. As a result, both the local and federal government designed programs to help shuttered theaters, concert venues, museums and other cultural institutions.

  • The city of Charlotte gave out more than $800,000 to independent music venues like the Neighborhood Theatre and the Evening Muse to cover their rent or mortgage payments.

Between the lines: Federal relief was disbursed more widely. Charlotte venues took in nearly $60 million from the Shuttered Venue Operators Grant program, according to an Axios analysis of the data in October.

  • Some in the industry, though, questioned whether the funding was distributed fairly. A corporate entity that appears to be affiliated with a music festival and the owner of several businesses that were kicked out of the EpiCentre received the most of any Charlotte company, at $10 million.

Meanwhile, others faced difficulties receiving funds altogether. Larry Farber, owner and founder of Middle C Jazz, told me in October that his application was denied without explanation.

  • When I reached Farber last week, he said the company did finally obtain money from the program, but not without going through an an exhaustive appeal process.

5. Prevalence of fraud

The speed that the programs were rolled out also gave fraudsters an opportunity to take advantage of them.

  • A study found that more than 15% of Paycheck Protection Program loans could have been fraudulent.

EatWorkPlay, a now defunct Charlotte event company, received $50,000 in Shuttered Venue Operators Grant money, despite appearing not to be eligible based on the program criteria. The company has a questionable history.

The bottom line: Government aid was limited, and money that ended up in the wrong hands took away opportunities for those who truly needed it.

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