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Real EstatePolitics & Money

Rental assistance isn’t reaching at-risk tenants

The Treasury Department warned grantees that if they are unable or unwilling to effectively allocate funds, the money will be reallocated

The Emergency Rental Assistance Program, created to help renters quash their missed payments, is disbursing the $46.5 billion allocated to the program at a snail’s pace.

The month of July saw a mere $1.7 billion made available to eligible households by state and local agencies, and though this marks an increase from the $1.5 billion allocated in June, the speed of distribution needs to improve, according to the Treasury Department.

New York has spent only about 0.3 percent of its allotted funds, the lowest rate of any state, followed by South Carolina at 0.9 percent, Wyoming at 1.2 percent and Florida at 1.8 percent, according to an analysis by the National Low Income Housing Coalition, a national tenant advocacy group.

Overall, $5.1 billion has been disbursed, and close to one million payments have been made to households at risk of eviction since January, the department said.

(The ERA program’s coffers were lined by two federal pandemic relief packages passed this year.)

In a statement published on its website, the Treasury listed out a few clarifications for state and local agencies to help in divvying up cash to renters and landlords in need. The department stressed that “many grantees need to do more to urgently accelerate efforts to prevent harmful evictions of vulnerable families.”

“One of the biggest challenges many state and local government programs continue to face in getting assistance to renters and landlords is application processing delays,” the Treasury said in a statement. “According to public dashboards, hundreds of thousands of applications are in the pipeline beyond those that have already been paid.”

One of clarifications announced by the department is for grantees to use self-attestation to document household eligibility to help speed up the processing of applications for rental assistance. This includes allowing grantees to rely solely on self-attestation of income when applicants are unable to provide other documentation of their income.

The Treasury also announced that it is establishing guidelines for “providing a portion of bulk payments to landlords and utility providers in anticipation of the full satisfaction of application and documentation requirements” and that this should assist households served by larger landlords.

Additionally, to help households who may have outstanding debt and thus are facing issues in securing new housing, the department said that at an eligible tenant’s request, agencies should provide assistance to cover remaining rental or utility arrears at a previous address.

In a letter to all grantees, Wally Adeyemo, deputy secretary of the Treasury, said that the department “strongly encourages jurisdictions to follow the lead of states and cities that are putting in place added protections against evictions” and that the Treasury, in coordination with its partners, is prepared to send out “ a next round of technical assistance providers to help ERA grantees strengthen their programs.”

Adeyemo warned that if grantees are unable or unwilling to deliver resources, the Treasury is prepared to reallocate funds.

“Beginning September 30, 2021, the ERA1 statute requires Treasury to recapture excess funds that have not been obligated by a state or other grantee and reallocate those resources to high-performing jurisdictions that have obligated at least 65% of their original allocation,” Adeyemo said.

On a brighter note, data provided by the Treasury shows that funds have started to reach low-income tenants and that 60% of the households served fell at or below 30% of the area median income.

The department also said that many grantees have shown the ability to aid vulnerable households, with 70 states and local agencies disbursing more than half of funds allocated to eligible households at the end of July.

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