NLIHC released on May 26 a new research brief, Balancing Act: An Analysis of Remaining Emergency Rental Assistance Funds, Reallocation, and Outstanding Need. The brief analyzes emergency rental assistance (ERA) spending trends, projects when state and large local grantees may exhaust their ERA1 and ERA2 funds, and estimates the amount of funding the U.S. Department of the Treasury (Treasury) could reallocate from slow-spending to fast-spending grantees. The brief finds that by December 2022, 23 state grantees and the District of Columbia could exhaust their ERA1 and ERA2 funds if current spending trends continue, despite remaining need among renter households. Read the brief here.
In recent months, the pace of ERA1 and ERA2 spending has slowed nationally. The decrease in spending rates reflects two distinct spending patterns among grantees: many slow-spending grantees are continuing to spend a combination of ERA1 and ERA2 funds slowly, while fast-spending grantees have nearly exhausted both their ERA1 and ERA2 allocations. To determine when grantees may exhaust their ERA funds, NLIHC evaluated ERA1 and ERA2 spending trends for all state grantees and the local grantee within each state that received the largest direct allocation from Treasury. NLIHC estimates that 22 state grantees, the District of Columbia, and 60% of local grantees included in the analysis will exhaust their current ERA1 funds by the end of May 2022 unless they receive additional ERA1 funds through reallocation. Even if a grantee’s funds are not exhausted, some programs have chosen to close their application portals, having obligated a significant share of their funds. Thus, eligible households that have yet to apply may be left without assistance at an even earlier date than that predicted by NLIHC for the exhaustion of ERA funds.
The report finds significant disparities in grantees’ resources and abilities to satisfy outstanding need in their states as indicated by the U.S. Census Bureau’s Household Pulse Survey. According to ERA spending data through March 2022, the amount of ERA funds remaining per renter household behind on rent ranges from $39,000 in Vermont to just over $1,370 in New York. The impact of the discrepancy in resources and outstanding needs is made clearer when one considers the low cost of housing in states like Vermont compared to the high cost of housing in many areas of New York.
To an extent, Treasury can better balance grantees’ remaining funds with outstanding needs through the reallocation of ERA1 and ERA2 funds. Thus far, Treasury has reallocated over $2.1 billion of ERA1 funds, and a third round of ERA1 reallocation, as well as the first round of ERA2 reallocation, will occur soon. Based on NLIHC's analysis, between $4.1 billion and $5.1 billion of ERA1 and ERA2 could be reallocated based on current guidance and available data. The current reallocation process will only be able to address the disparities between grantees’ remaining funds and the continued need for assistance among renters in limited ways.
The brief recommends that Treasury quickly reallocate ERA to ensure that the finite amount of remaining funds are distributed to those grantees with the highest needs. Furthermore, while assistance has been impactful for millions of households, ERA was designed to provide only short-term financial assistance during the COVID-19 pandemic and cannot be used to address the long-standing housing crisis in America. Thus, Congress should draw on lessons learned through the implementation of ERA to authorize and fund a permanent program to support households experiencing financial shocks, such as the program envisioned in the “Eviction Crisis Act” co-sponsored by Senators Michael Bennet (D-CO) and Rob Portman (R-OH).
Read the brief at: https://bit.ly/3PJ3Ewg