ERA Program Surpasses 2.5M Payments, Unused Funds to Be Reallocated
The Treasury Department recently released new federal emergency rental assistance (ERA) data. The data shows that several large states and cities have exhausted their ERA allocations. Also, according to the latest data, states and local governments distributed more than $2.8 billion in ERA funds to more than 521,000 renters in October. Since being introduced, the program has seen more than $2.8 billion in funds distributed to over 2.5 million people. The Treasury Department is forecasting that $25 billion to $30 billion in rental assistance funds will be spent or obligated by the end of the year.
The context: Congress has authorized $46.5 billion in emergency rental assistance in a bid to thwart what was expected to be a wave of pandemic-related evictions. The first tranche of emergency rental assistance funds, known as ERA1, is for $25 billion and the second, known as ERA2 and meant to be spent over a longer period of time, is $21.5 billion.
One level deeper: The initial rollout of the federal program was plagued by slow disbursement. The more recent problem has been some parts of the country expending all their money while others, especially in parts of the South, are lagging behind.
According to the Treasury Department, several large states and cities are running out of rental assistance monies. Texas has stopped accepting new applicants because it has allocated all its funds, while Oregon has stopped taking new applicants for now, the Treasury Department said. The State of New York has spent or committed nearly all of its money, as has Philadelphia. California has indicated it will soon exhaust its funds, while Atlanta has closed its program to new applicants. And more than 100 other state and local entities have indicated they have gone through almost all their ERA1 money and are beginning to spend down their ERA2 funds, Treasury said.
What’s next: The Treasury Department will begin reallocating funds from grantees that have unused ERA funds. The initial reallocation, set to be revealed soon, could exceed $800 million. Officials have not specified which jurisdictions would lose and gain funds, but states with large amounts of unused ERA include rural states like Montana and North Dakota. More populous states, including New York and Texas, are expected to exhaust their ERA allocations over the coming week and months.