Several major states and cities have exhausted their federal rental subsidies, the Treasury Department said Monday, as a sign that spending on a massive evictions program has picked up speed.
The federal government forecasts that more than $ 30 billion, or about two-thirds of the funding allocated for rental subsidies, will be disbursed or allocated by the end of the year. That’s a dramatic change since this summer, when housing officials complained about the slow pace of distribution.
But with the improved earnings of the $ 46.5 billion program, concerns have arisen that some tenants are not getting help. The first tranche of the Emergency Fund for Rent, known as ERA1, is $ 25 billion and the second, known as ERA2, which is expected to be spent over a longer period, is $ 21.5 billion.
Texas has stopped accepting new applicants because it has allocated all of its funds, while Oregon has stopped accepting new applicants for the time being, the Treasury Department said. New York State has spent or tied up almost all of its money, as has Philadelphia. California has announced that it will use up its funds soon while Atlanta has closed its program to new applicants.
More than 100 other state and local entities have indicated that they have used almost all of their ERA1 money and are starting to spend their ERA2 funds, the Treasury Department said.
“There is still a lot of work to be done to raise funds in a timely manner to prevent avoidable evictions, but we are in a new phase.” Gene Sperling, who is tasked with overseeing the implementation of President Joe Biden’s $ 1.9 trillion coronavirus rescue package, said in an email interview.
“We now have the three largest states and a lot of cities saying they have or will soon be all of their ERA funds,” he continued. “The Treasury Department is using the redeployment process to encourage weak performers to improve their game and put more money into the hands of those who can help the weakest the fastest.”
Texas officials said its program had paid out $ 1.5 billion and an additional $ 109 million was about to be paid out. Over 263,000 households have received the funds and another 21,000 have payments that are on the way.
“We have not received notice that additional funds have been sent to us for distribution, but we have asked the Treasury Department for funds that can be redistributed from those that have not been disbursed through other state, county or city programs,” Kristina Tirloni , a spokeswoman for the Texas Department of Housing and Community Affairs, said in an email.
Oregon Housing and Community Services announced earlier this month that nearly all of $ 289 million in federal emergency aid had been allocated for rentals.
During a recent Senate Interim Housing and Development Committee, Margaret Salazar, director of Oregon Housing and Community Services, said the “hard reality” is that Oregon “just doesn’t have enough resources to meet the needs of the state,” to respond to the immediate crisis.
Although officials say all of the rental assistance has been requested, a significant portion of the funding – $ 159 million – has yet to reach tenants. The state has received nearly 51,000 complete rental grant applications, but so far only 43% of applicants have received funding.
New York has spent or pledged $ 2 billion out of $ 2.4 billion after spending nearly $ 200 million as of August.
But it also faces the challenge of getting money into the hands of tenants as nearly $ 1 billion is still being held back for missing papers. One major problem is that the state is struggling to match tenant applications with the landlords who own the property.
Congress has $ 46.5 billion
The initial rollout of the federal program was plagued by a slow payoff, with administrative officials publicly accusing state and municipal partners of obstructing the process with excessive red tape, often aimed at preventing fraud.
The problem recently has been that some parts of the country are spending all their money while others, particularly in parts of the south, are lagging behind.
“Although the overall rate of emergency spending on rental housing has improved, many programs are still too slow to provide assistance to tenants in need,” said Diane Yentel, CEO of the National Low Income Housing Coalition, in a statement. “Most funders and service providers are unnecessarily delayed because they refuse to use flexibilities and best practices to expedite aid.”
The Treasury Department announced in October that it would begin reallocating unspent funds shortly.
Those companies that have not committed 65% of their ERA1 funds or that have a spending ratio of less than 30% as of September 30th based on a Treasury formula will face a reallocation of money. Scholars can avoid losing the money if they submit a plan by November 15 that shows how they can improve distribution or be able to get their distribution numbers above the 65% or 30% threshold.
There will also be the option for institutions to voluntarily return the money with the aim that it could be redistributed to the same state, territory or tribal area. Tax officials have not identified any places where money could be lost.
Associated Press authors Jamie Stengle in Dallas and Sara Cline in Portland, Oregon contributed to this report.