Progress Still Lacking in Distribution of ERAP Funds

person A.J. Johnson today 11/21/2021

The National Low Income Housing Coalition (NLIHC) has released findings from the organization’s latest survey of state use of funding from the federal Emergency Rental Assistance Program (ERAP). As of late September, of the approximately $25 billion made available by the federal government in the first tranche (ERA1) of emergency rental assistance, states have expended or obligated only $8.4 billion (33.7%).

While this is still indicative of weak performance by many states, the use of the funds has picked up in recent months. Grantees spent $550 million more in August than they did in July, while from June to July the increase was only $196 million.

A total of $46 billion has been provided in ERA1 and ERA2. Percent of the money spent by reporting period is as follows:

  • January - March: 1.1%
  • April: 1.9%
  • May: 3.1%
  • June: 6.1%
  • July: 6.9%
  • August: 9.1%

18 states spent less than 10% of their ERA1 allocations as of the end of August. Several of these did show progress in August, however, especially Florida and South Carolina. The states with the lowest allocations are -

  • Florida: 9%
  • Vermont: 9%
  • Indiana: 9%
  • Montana: 9%
  • Iowa: 9%
  • Rhode Island: 8%
  • Delaware: 7%
  • Idaho: 7%
  • South Carolina: 7%
  • Tennessee: 7%
  • Georgia: 6%
  • Alabama: 6%
  • Arkansas: 4%
  • Nebraska: 4%
  • Arizona: 3%
  • North Dakota: 3%
  • South Dakota: 2%
  • Wyoming: 2%

The highest performing states are -

  • New Jersey: 78%
  • District of Columbia: 70%
  • Virginia: 63%
  • Texas: 56%
  • North Carolina: 48%
  • Illinois: 43%
  • Alaska: 43%
  • Massachusetts: 41%

Despite noticeable improvement, the overall rate of spending remains too low. States like NJ, VA, and TX have proven that it is possible to get this money to the tenants and landlords who need it. The high performance of these and a few other states calls into question the poor performance of so many others.

In some cases, the fault lies with state legislatures or local governments. Congress is also partly to blame for a faulty allocation formula, which provided some grantees with more funding than needed. In some cases, landlords are refusing to participate in the program. But the primary reason for the lack of distribution is that many program administrators are not following clear Treasury guidance and are not willing to adopt proven best practices.

These poor performers often do little (if any) outreach, do not hire enough staff to process the applications, and have complex and burdensome application procedures. Very few of the slow spenders allow renters to self-attest eligibility, despite federal guidance that has urged it for months. Less than a third of programs allow assistance to go directly to tenants, despite it being permitted and critical to keeping residents housed when landlords refuse to participate. The best and fastest spending programs are doing all these things.

There are signs that some weaker performing states are taking steps to improve - South Carolina and Arkansas are examples. Hopefully, others will follow suit and this important resource will further improve the desperate housing situation that many tenants and landlords are facing.

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