New Treasury Data Shows That the Rollout of Emergency Rent Relief Continues to Be a Hot Mess

Congress approved $25 Billion in emergency rental assistance in December. Only 6 percent of that money has been spent so far.

States and localities continue to struggle with getting billions in federal rent relief funds out the door, frustrating both tenants and property owners while fueling demands for continued eviction moratoriums.

On Friday, the U.S. Treasury Department released new data showing that as of May 31, recipient jurisdictions have spent only about $1.3 billion, or 6 percent, of the $25 billion in Emergency Rental Assistance (ERA) funds approved by Congress in December 2020 to help renters cover rent, rent debt, and utilities.

That federal money was given in the form of grants to states and territories and to local governments with populations over 200,000.

That number obscures a lot of variation between states. Virginia has spent about 30 percent of its ERA award, compared to California's 2 percent. The pace of spending is also increasing. States and localities spent $774 million in May, compared to the $443 million spent in April, and the $272 million spent from January to March. About 345,000 families have received ERA-funded assistance.

That's far short of the 1.3 million households who self-report that they're "very likely" to be evicted in the next two months in Census surveys, reports Politico.

A second, $21 billion round of ERA funding was included in the relief bill Congress passed in March 2021. The new data released from the Treasury Department doesn't cover that money. Some $8.6 billion of it has been released to grantees as of early May.

The dispersal of funds has faced a number of problems. For starters, most state and local governments have had to set up their own rent relief programs from scratch.

"Prior to this year, few governments had robust programs for delivering this type of rental assistance, and none were operating at the scale now made possible by ERA resources," notes the Treasury in a report accompanying its data release, saying that jurisdictions with pre-existing rent relief programs have been able to scale up their ERA programs faster.

Some 60 percent of respondents in a recent survey of ERA administrators said that a lack of staff was preventing them from dispersing rental aid. Another 49 percent said that their technical ability to scale up programs was responsible for the trickle of relief provided thus far.

Nevertheless, housing advocates say that even with these front-end logistical difficulties, ERA grantees should still be managing to spend emergency rental assistance like there's actually an emergency on.

"This data is extremely alarming," said Dianne Yentel, president of the National Low-Income Housing Coalition (NLIHC), in a statement. "Setting up rental assistance programs from scratch is a major and time consuming undertaking, but by now that's no excuse for the abysmally slow pace of spending—this is entirely avoidable with the abundant resources yet to reach families in need."

These logistical struggles have fed into another problem facing the ERA program: a lack of participation from both landlords and tenants. Many who've tried to apply for aid have been met with crashing websites, requests for information they don't have, or lengthy applications (California's is 32 pages long, the Los Angeles Times reports).

The Treasury Department has tried to address to boost participation and smooth the application process by publishing outreach materials, letting grantees use "fact-based proxies" for vetting applicants' eligibility (such as using a neighborhood's average income to determine an individual applicant's income), and listing "promising practices" of successful ERA programs on its website.

The effective dispersal of government assistance is probably not a top policy priority for most libertarians. But libertarians should care about it in this case. After all, the snail's pace at which rent relief has been distributed is providing politicians with another reason to extend eviction moratoriums enacted during the pandemic.

"Removing eviction protections now, while billions of rent relief dollars are still available, would be a disaster and exacerbate our homelessness crisis," said California Assemblymember David Chiu (D–San Francisco) in a statement, after lawmakers in that state reached a deal to extend an eviction moratorium into September.

Progressive Democrats last month argued that the federal government's eviction moratorium should be extended beyond the end of June (when it was set to expire) to give ERA funds more time to reach renters and landlords. The Biden administration acquiesced to that demand, extending the moratorium through the end of July.

The various federal COVID relief bills appropriated huge amounts of money to address the fallout from the pandemic, often without much consideration for how to get that money to its intended beneficiaries.

The rollout of rent relief is a good example of what happens when Congress spends first and asks questions later.