Emergency Rental Assistance Payments Are Ramping Up, But States Must Do More to Accelerate Aid to Low-Income Communities
Recently released data from the Treasury Department shows that state and local governments are ramping up Emergency Rental Assistance (ERA) payments. However, these agencies need to do more to accelerate the aid to low-to-no income communities.
According to the data, over 160,000 households utilized ERA programs in May, representing a 60 percent increase from the previous month. Still, the U.S. Census Bureau’s Weekly Pulse Survey for the week ending on June 21 shows approximately 1.2 million people reported being “very likely” to face eviction within the next two months.
“Money is available in every state to help renters at risk of eviction – and the urgency has never been greater,” the Treasury Department said in a statement. “The [Biden] Administration is calling for an all-hands-on-deck effort by state and local governments, courts, community organizations, and the legal community to prevent evictions, including moving more quickly to get emergency rental assistance to families in need.”
Since last year, the federal government allocated more than $4.5 trillion to economic stimulus programs through the CARES Act, the American Rescue Plan, and supplemental legislation. Additionally, the government provided over $900 million in tax relief, for a total value of about $5.4 trillion.
In turn, Treasury reported dispersing the total $25 billion available in the first round of ERA to state, local, and Tribal governments. Treasury also made $8.6 billion in additional funds available in early May. These funds are earmarked for grants, loans, and other assistance programs.
Even though Treasury says it is also sending out a record number of ERA and economic impact payments (EIP) to households across the country, low-income households in several states are struggling to receive any stimulus funds at all.
For example, a study by the Public Policy Center of California found that nearly one in five Californians did not receive a stimulus payment. One of the biggest impediments for these families was access to banking.
People earning the lowest 10 percent of incomes—less than $22,000 for a family of four—frequently do not have relationships with banks because they do not have to file taxes. However, this caused nearly 65 percent of families to miss out on stimulus payments, according to the study.
By comparison, 95 percent of “middle class” families—those with annual incomes between $50,000 and $176,000—received stimulus payments.
California recently announced a plan to reimburse low-income earners who did not receive all of the stimulus payments they qualified for.
According to the Washington Post, the state will pay “the overdue rent of all lower-income tenants affected by the coronavirus pandemic and extend a soon-to-expire moratorium on evictions, despite landlord opposition, through September.”
The program is expected to cost around $5.2 billion and is the single largest allocation at the state level in California’s history. Governor Gavin Newsome said the program includes $2 billion to help low-income families pay overdue utility bills as well.
“California is coming roaring back from the pandemic, but the economic impacts of COVID-19 continue to disproportionately impact so many low-income Californians, tenants, and small landlords alike,” Newsome said.
Diane Yentel, Executive Director of the National Low Income Housing Coalition, described the plan as “good news,” adding that local leaders should have prioritized low-income households from the beginning.
“Glad to see the course correction, better late than never,” Yentel added in a tweet.
This is good news, but it’s what California should have done with its emergency rental assistance allocation when they first launched their program months ago. Glad to see the course correction, better late than never. https://t.co/s7N8yv4AAx
— Diane Yentel (@dianeyentel) June 22, 2021
Another reason many needy families are not receiving payment is that several agencies delayed opening local ERA programs despite the urgency to reach households under threat of eviction.
According to data from the Treasury, state and local grantees have provided about $1.5 billion in relief through May 31. However, several grantees didn’t open their programs until late May or June. Additionally, more than 80 governments reported having no spending on household assistance at all.
On the bright side, over 70 percent of ERA payments made during Q1 2021 reached low-income households, the Treasury said. All of these households made up to 30 percent of an area’s median income.
“Because these households often face significant financial insecurity and risk of eviction, reaching them is a key step to preventing evictions,” Treasury said in a statement.
At the same time, states with rental assistance programs that predate ERA are scaling up faster than other states. Virginia has distributed more than $155 million in rental and utility payments.
The Center on Budget Policy and Priorities (CBPP) estimates that 68 percent of Virginians receiving these payments are elderly. Another four-in-10 live in low-income families.
Similarly, Texas has dispersed more than $450 million in rent and utility payments. These payments have supported over 631,000 households, 70 percent of which are elderly, CBPP reported.
“Before this year, few governments had robust rental assistance programs, and none at the scale now made possible by ERA,” Treasury said in a statement. “This means that once grantees make the investments needed to set up ERA programs, funds can be effectively deployed where they are needed most. It also means that if grantees invest the time and resources required to more quickly set up their infrastructure for ERA programs, they will be able to deliver critical lifelines to renters sooner.”