With many Oahu residents continuing to struggle financially, the Honolulu City Council agreed Wednesday to distribute $25 million of the city’s dwindling federal pandemic relief funding to low-income families who have fallen behind on their rent and utility payments.

The money will be dispersed to private landlords where renters are behind on their rent and to public utilities, including Hawaiian Electric Co. and Hawaii Gas.

Households can receive a maximum of $2,500 a month for up to 18 months, although no household is guaranteed 18 months of benefits.

But at a budget committee meeting on Jan. 10, City Council members expressed serious concerns about whether the city is creating a pool of people who have come to expect continuing government largesse and may not realize that federal Covid money is coming to an end.

The money will be distributed by Catholic Charities Hawaii and the Council for Native Hawaiian Advancement, two nonprofits that have helped the city channel Covid-related financial assistance to local residents over the past several years.

Kuhio Lewis, president and chief executive officer of the Council for Native Hawaiian Advancement, told the council that the money was desperately needed.

“Simply put, our community’s need far exceeds the current relief funding available,” Lewis told the council.

In a statement, Rob Van Tassell, president and chief executive officer at Catholic Charities, said the organization was “pleased and grateful for the City Council’s approval for additional funding.”

The $25 million is coming from the state and local recovery funds established by the American Rescue Plan of 2021, which was enacted to help families cope with the financial pressures caused by the Covid pandemic shutdown. Honolulu has kept that money in two separate tranches; this money comes from the second, and final, tranche.

People who receive the money will not have to prove any Covid-related hardship, unlike earlier relief programs. The vast majority, city officials said, are female-headed households who earn less than $64,000 for a family of four.

For some families, the money will allow them to fend off evictions, which officials said are beginning to rise. Inflation is making it harder for poor families to buy food, while gas prices remain high as well. Amy Asselbaye, executive director of the city’s Office of Economic Revitalization, said the biggest emerging problem is people unable to pay for utilities.

The Blangiardi administration approached the council in early January for $33 million to give the money to households that Asselbaye said was needed “to continue to keep our neighbors safely housed.” The relief, she said, will go to “the households that need it the most.”

The council reduced the amount to $25 million and found some of the money by restricting proposed expenditures in other parts of the city budget.

Council Chair Tommy Waters said he feared the money would be a “band-aid” on a much bigger problem.

“One of my concerns is what is the long-term strategy because at some point this money is going to run out,” Waters asked city administrators.

Council member Calvin Say said the city may be looking at financial problems in the next few years and that residents will be shocked to realize the money is gone. He called the situation “a very sobering dilemma.”

Say and other council members wrestled with the same topic on Feb. 7.

“When do we start the process of weaning these people off the funding?” Say asked.

It is projected that the $25 million will be divided among 4,242 households, including $3.1 million for District 1; $1.9 million for District 2; $1.2 million for District 3; $2.9 million for District 4; $5.4 million for District 5; $3.4 million for District 6; $3.1 million for District 7, $1.7 million for District 8 and $2.3 million for District 9.

Editor’s note: The story has been updated to clarify the amount each household may be eligible to receive and for what time period. The funding levels for each district are currently estimates only.