In a bold but necessary move, the United States government allocated $46.5 billion in rent relief funds to prevent millions of struggling renters from being abruptly evicted. At the time, it seemed the perfect method to combat homelessness by way of eviction. Once the social safety net of the moratorium (which temporarily banned eviction nationwide) was removed, this new net was fastened underneath the American people to prevent them from falling into the desolate state of homelessness.
From a purely numerical standpoint, this was the perfect plan at surface level. However, real-life application proved difficult. States initially struggled to distribute the money, leaving much of the federal funding in limbo – far from the pockets of renters and landlords that needed it.
In August, the New York Times reported that 89% of all funding had not yet been distributed, leaving a paltry 11% for the swarths of at-risk renters in the country. By October, that number increased a little utilizing about a quarter of the total funding, which amounts to approximately $12.1 billion.
The good news is that with a little over a quarter of the total funding finally in distribution, approximately 2.5 million renter households have been helped.
Diane Yentel, CEO of the National Low Income Housing Coalition, told CNN Business:
“With back rent paid, these families have a clean slate and some housing stability to help get through the next wave of the pandemic. But many struggling renters have yet to receive assistance, through no fault of their own, and remain at risk of losing their home this winter.”
How Much Money (and Time) is Left for Rent Relief?
According to numbers released by Forbes, approximately half of the first installment of funding had been distributed at the beginning of November. As the calendar year ended, government representatives vowed to have 80% of that first installment out to renters. Now, with 2022 already upon us, no word has been released as to whether that target was reached.
What is known is that rules and regulations regarding this financial aid were not initially put in place. For this reason, many advocates who genuinely wanted to help were confused. Add to this a complex application system, and you find renters desperately in need of aid who are also confused.
In the beginning, almost 500 local, state, and tribal governments were tasked with distributing financial aid to at-risk renters. What we already see, with almost three-quarters of the funding still untouched, is a call for “reallocation of unspent aid.” This could make money harder to follow and even more challenging to receive.
In addition to the complexity of this change, there is another component to be considered, which is time. According to the Congressional Research Service reports, the first round of ERA funding initially had a deadline of December 31, 2021. Further contemplation led to an extension. However, governments still must distribute that first round of rent relief by the end of September 2022.
Reallocation of Rent Relief: A Double-Edged Sword for At-Risk Renters
On October 4, the US Treasury moved to allow excess funding and redistribution to regions that needed more assistance. Again, at surface level, this is an excellent plan.
CNN Business points out that “high-need” states will be able to access more funding for struggling renters. This means more money in landlord pockets and the economy at large and less debt and red tape for vulnerable renters who might otherwise lose their homes to eviction.
On the other hand, needy individuals residing in regions where funds are leaving could find themselves in a debacle.
Part of the reallocation process is the examination of grantees (i.e., the renters for whom the conveyance was made) for excess funds. If the government determines that a grantee exhibits insufficient expenditure ratios or unobligated funds, it reserves the right to recapture those funds.
In an interview with Forbes, Doug Ryan, VP at Prosperity Now, summarized this concept with the following quote:
“Some states may say, ‘We don’t want this money, you can take it back.'” It’ll get allocated to other states, but that means families in states that haven’t gotten money out [to renters] will be punished.”
With so many billions of dollars moving across borders and shifting into new territories, another strategy to be considered is the reallocation of funds to departments not related to renters.
We find a harrowing example of this in Philadelphia, where in February of 2021, the Inquirer reported that the city had spent $96 million in COVID relief funding to “plug gaps in the state budget, primarily for the payroll of the state Department of Corrections.”
In December of 2021, Spotlight, PA projected certain parts of Pennsylvania (including but not limited to Philadelphia) would entirely run out of rental assistance funding by the end of the month. This left households vulnerable as the winter cold set in.
In the midst of this, there is no word as to whether the City of Philadelphia took back that initial $96 million they took from renters and filtered into the police department and then still ran out of money, or if this deficit is due to that original mismanagement of funds.
Get Involved by Getting in Touch with Your Legislators
What is clear is that approximately 5.7 million adult renters living with children are deemed at risk for homelessness by way of eviction. There is currently $34.4 billion left in the rent relief fund. If $12 billion helped 2.5 million renters, then the remaining $34.4 billion should help approximately 5.6 million more.
By the numbers, we have just enough. This means we cannot afford to make mistakes with distribution.