5 ways pandemic money has helped – and failed – those in need

Illustration: Aïda Amer / Axios

As the coronavirus wreaked economic ruin, city lawmakers at the federal level rushed to deploy billions of dollars to help avert some of the worst damage.

Financial aid programs have been created for small businesses, the entertainment industry, restaurants, host families, renters and others. And of course, there were the stimulus checks that helped keep millions of Americans afloat.

  • Without a doubt, without this relief, the economic damage would have been much greater.

Why is this important: Yet the rapid pace at which aid was distributed often meant that it was not reaching those who needed it most.

  • The truth is, while national headlines often capture the moment when huge spending bills are signed, this is only the beginning of the process of making sure the money gets to those who need it.

This year, we’ve covered many ways that pandemic recovery efforts have left people behind. But we know that it can be difficult for anyone to keep up with all the government programs that are out there. So here’s a quick rundown of how the programs went.

1. Rent relief

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

  • In Charlotte, the nonprofit DreamKey Partners manages the Rental Assistance Program. Since its launch in 2020, they have distributed $ 84 million in aid to 20,832 households, according to Noelle Bell, spokesperson for the association.
  • Just under 3,000 households are still awaiting funds, she said in an email.

Yes, but: Housing advocates accuse the money has flowed too slowly to tenants. I spoke with a woman in July who was almost evicted before finally receiving rent assistance five months after applying.

The other side: The organization has increased its staff and is prioritizing tenants who have received an eviction notice and those with the lowest incomes. DreamKey also noted that it disburses funds faster than other cities and states, many of which have struggled.

The bottom line: It boiled down to what was a problem common to all aid programs. there was little existing infrastructure to pay billions to those in need.

2. Paycheck Protection Loans

Go back: The Paycheck Protection Program was launched in April 2020, and while it has helped a bunch of small businesses survive, it was immediately in trouble as well.

The money ran out in 13 days, and some lenders would initially only process requests from existing customers. The business owners in Charlotte I spoke to for the Charlotte Observer at the time were scrambling to find a way to stay afloat.

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

Ultimately, the program has helped many small businesses, providing just under $ 800 billion in the end. Local business owners like the owner of Blackhawk Hardware have described the money as a godsend. In many cases, this has helped prevent closures and layoffs.

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

3. Favor young people

The stimulus package approved by Congress 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 distributed stimulus checks to young adults between the ages of 18 and 26 who had been part of the system. People aged 18 to 20 were eligible for $ 2,500 and those aged 21 to 26 were eligible for $ 5,000.
  • But Mecklenburg County ran out of money to help the 813 eligible young people. In November, only 155 were able to receive checks.

What they say : The county says the state only gave them two weeks to distribute the money to young people before the federal deadline.

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

The big picture: The majority of young people placed in Mecklenburg County, a group disproportionately affected by the pandemic, have not received assistance that could have had a significant impact on their lives.

4. Arts and culture

The arts and entertainment sector has been shut down longer than most. As a result, local and federal governments have designed programs to help closed theaters, concert halls, museums and other cultural institutions.

  • The City of Charlotte has given more than $ 800,000 to independent concert halls like the Neighborhood Theater and the Evening Muse to cover their rent or mortgage payments.

Between the lines: Federal aid has been paid more widely. The Charlotte sites received nearly $ 60 million from the Shuttered Venue Operators Grant, according to an Axios analysis of the data in October.

  • Some in the industry, however, questioned whether the funding was distributed fairly. A corporation that appears to be affiliated with a music festival and the owner of several businesses that were kicked out of the epicenter received the most from any business in Charlotte, at $ 10 million.

During this time, others had difficulty receiving funds. Larry Farber, owner and founder of Middle C Jazz, told me in October that his request was denied without explanation.

  • When I contacted Farber last week, he told me that the company had finally secured money from the program, but not without going through an extensive appeal process.

5. Prevalence of fraud

The speed with which the programs were deployed also allowed fraudsters to take advantage of them.

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

EatWorkPlay, a now defunct Charlotte-based event company, received a $ 50,000 Shuttered Venue Operators Grant, although it appears not to be eligible based on the program’s criteria. The company has a questionable history.

The bottom line: Government support was limited, and the money that ended up in the wrong hands cut off opportunities for those who really needed it.

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