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New Report Released on Unspent Emergency Rental Assistance Funds, How They Should be Reallocated, and Outstanding Need

A descriptive summary of emergency rental assistance spending (ERA) trends, Treasury Department reallocation, disparities between grantees’ remaining ERA funds and their outstanding need

WASHINGTON, DC– The National Low Income Housing Coalition (NLIHC) released today a new report, Balancing Act: An Analysis of Remaining Emergency Rental Assistance Funds, Reallocation, and Outstanding Need. The report provides a descriptive summary of emergency rental assistance (ERA) spending trends, projects when state and large local grantees may exhaust their two rounds of ERA (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.

“Emergency rental assistance has been a critical lifeline for millions of renter households, assisting the lowest-income, most marginalized renters at grave risk of eviction during the pandemic,” said NLIHC President and CEO Diane Yentel. “But many states and jurisdictions are running out of ERA with stark unmet needs. The program was designed to provide short-term assistance and keep people stably housed during the pandemic, but does not address long-term housing needs. Congress must enact targeted affordable housing investments in any final reconciliation bill targeted to ensure long-term housing stability for the lowest-income people.”

The report shows that during the remainder of 2022, many state grantees will exhaust their ERA funds despite continuing need among renters, and, in 22 of the 40 states with local grantees, local grantees will exhaust their direct ERA allocations before the state grantees. This situation could leave eligible households in some jurisdictions with few options for assistance, particularly if a state grantee does not serve jurisdictions that received a direct allocation.

The report also shows that Treasury is limiting the power of the ERA2 reallocation process to address disparities in need by prohibiting grantees from voluntarily reallocating more than 60% of their ERA2 allocations. In effect, this prohibition could result in low-spending grantees having at least 40% of their ERA2 allocations for use until 2025 – much longer than was intended by the program.

The data make clear that reallocation cannot fully address the disparities between grantees’ remaining ERA funds and their outstanding need for assistance. In addition to advancing other long-term housing solutions, 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).

Balancing Act: An Analysis of Remaining Emergency Rental Assistance Funds, Reallocation, and Outstanding Need is available at: https://bit.ly/3PM1w79

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About the National Low Income Housing Coalition

The National Low Income Housing Coalition is dedicated to achieving racially and socially equitable public policy that ensures people with the lowest incomes have quality homes that are accessible and affordable in the communities of their choice. NLIHC educates, organizes, and advocates to ensure decent, affordable housing for everyone. For more information about NLIHC, please visit www.nlihc.org.