Treasury says not much rental aid money will be redirected to high-demand states

Not much federal rental aid money will be redirected to high-demand states, said Gene Sperling, who is in charge of overseeing the implementation of the president’s COVID rescue package.

In a statement Friday, the Treasury Department said states and territories paid $2.9 billion in rental assistance to tenants in November, the largest amount since the federal aid program began.

The rental assistance is divided into two parts, the first tranche, known as ERA1, is $25 billion, and the second, known as ERA2, is $21.5 billion. ERA2 is meant to be spent over a long period of time.

However, the Treasury said programs in states such as New York and Texas have more than 100 grantees showing they have already used up nearly all of their ERA1 money.

Sperling, who is in charge of handling the implementation of President Joe Biden’s $1.9 trillion coronavirus rescue package, said there is little money to reallocate.

He estimated that more than $1.1 billion would be allocated in the first three rounds of reimbursement. Of that $1.1 billion, $875 million will be redirected to cities and counties that need it from state-run programs within states.

According to the Associated Press, “there won’t be a large amount of additional funding,” Sperling said. “Restoration will help but will not fill the gaps in large states like Texas, New York or California, which have largely committed their funding and still have significant needs.”

Gene Sperling estimated that more than $1.1 billion would be allocated for the rental assistance fund in the first three rounds of reimbursement. In this photo, Sperling, who is the White House US rescue planning coordinator, speaks at a press briefing in the James Brady Press Briefing Room of the White House on August 2, 2021 in Washington, DC.
Kevin Dietch/Getty Images

The latest figures show that $17.39 billion has been allocated to help cover back rents, putting the program in motion to pay or allocate $30 billion by the end of 2021. So far, over 3.1 million payments have been made.

“We’re just seeing people start their own programs, making them simpler and more efficient,” Sperling said in an email interview. “A lot of places are moving fast and you’re going to find needy renters getting big bucks quickly.”

Diane Yantel, CEO of the National Low Income Housing Coalition, welcomed the increased pace of disbursements.

“The efforts of the Biden administration, advocates, program administrators and others have significantly improved emergency rental assistance (ERA) programs and accelerated ERA distributions, keeping millions of people stable,” she said in a statement. Is.” “Nearly 10 million people in more than 3 million homes have been assisted with these vital resources. With past rent payments, these families have a clean slate and some housing stability to start the year.”

But with the improved results of the $46.5 billion program, it has come with concerns that it will not reach all tenants who need help.

A dozen states are transferring money to localities. For example, Georgia is transferring $50 million to Fulton and DeKalb counties. In Arizona, $39 million is being transferred from the state to Maricopa County.

Many places will receive funding from a pool of re-allocated funds from poorly performing states. California will receive $50.3 million, New Jersey $40.8 million, New York $27 million and the District of Columbia $17.8 million.

New York’s $27 million could end up funding only 2,177 applications, Barbara Guinn, acting deputy commissioner for the New York State Office of Temporary and Disability Assistance, filed in a state court Monday. Guinn’s filing in a lawsuit started by advocates comes days before a state judge ordered New York to reopen its application portal that was closed in November.

Tenant advocacy groups say New York should once again accept applications that temporarily offer eviction protections to applicants. However, lawyers representing New York have argued that the state should keep the application portal closed to avoid giving future applicants “false hope” due to the lack of available rental relief funds.

Guinn said it is “completely unclear” whether New York will receive more federal funding in March.

The initial rollout of the federal program was plagued by slow disbursements, with administration officials publicly blaming state and municipal partners for obstructing the process with excessive bureaucracy aimed at preventing fraud.

Until recently, the problem was that some parts of the country were spending all their money, while others, especially parts of the south, were lagging.

Entities that haven’t obligated 65 percent of their ERA1 money or find expense ratios below 30 percent by September 30 based on a Treasury formula face reallocation of funds. Grantees can avoid losing money if they submit a plan by November 15, showing how they will improve distributions or be able to get their distribution numbers above the 65 percent or 30 percent threshold.

The deadline for submitting requests for the second round of reallocated funds is January 21. By law, the process of reallocating ERA2 funds will not begin until March 31, 2022.

The Associated Press contributed to this report.

Rental Assistance, Eviction, Treasury
Many places will receive funding from a pool of re-allocated funds from poorly performing states. California will receive $50.3 million, New Jersey $40.8 million, New York $27 million and the District of Columbia $17.8 million. Above, protesters hold placards in front of the White House in Washington, DC on September 25, 2021 to cancel rents, mortgages and prevent millions of evictions amid the resurgence of the COVID-19 pandemic.
olivier doulieri