Treasury Rewards Efficient Rent Aid Programs

Programs that worked fast will get more cash at the expense of slower ones

Consultant standing holding a digital tablet, client on background
•••

FG Trade/Getty Images

If you’re behind on rent and live in an area that has already used up much of its federal rental aid, you may be in luck—more help is on the way. If you live in a state that hasn’t moved quickly to distribute the aid, though, your prospects for assistance could dwindle.

An additional $13 billion from government coffers is being made available to “high-performing” jurisdictions including Philadelphia, Houston, and New Orleans, which are among 495 state and local programs responsible for distributing Emergency Rental Assistance funds to help tenants weather the pandemic’s economic downturn, the Treasury Department said Tuesday. Jurisdictions that were slow to give out the money received a warning from the Treasury: “Use it or lose it.” The department said it’s prepared to take money away from low performers and give it to the higher-spending jurisdictions.

Congress created the unprecedented rental assistance program in December and proceeded to fund it with nearly $47 billion between two pandemic relief bills. The program pays for up to 18 months of back rent for financially struggling renters, but red tape has slowed down the process of distributing the aid, in some places more than others. The federal government has pointed to the program as a last line of defense against eviction since the Supreme Court overturned the nationwide eviction ban in August.

“While Treasury’s strong preference is for each jurisdiction to have the opportunity to use the full amount of its original ERA allocation, the department is prepared to reallocate funds from state and local programs that are not quickly dispersing funds to programs that are effectively getting funds out the door,” the department said in a statement.

So far, $34 billion of the $47 billion program has been released to local programs, and nearly 50 programs had spent 70% or more of their funding as of July 31, the Treasury Department said. On its list of high-performing jurisdictions was Philadelphia, for example, which the department praised for quickly setting up a website for tenants to apply, and for working with the city’s court system to prevent evictions.

The Treasury did not specify which slow-moving programs were at risk of losing funding, but according to data from the National Low Income Housing Coalition, a nonprofit advocacy group, some programs are doing much better than others. Alabama, for example, had spent just 2.2% of the $263 million it was given as of Sept. 13, while New York state had already spent its entire allocation of $1.2 billion, according to the coalition’s spending tracker.

Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com.