Federal government distributes $1.5bn in rental aid as eviction crisis looms for millions of Americans

Of more than $46bn approved by Congress to help renters, only 6.5 per cent distributed in first half of 2021, while CDC eviction moratorium expires 31 July

(REUTERS)

The federal government distributed more than $1.5bn in rental assistance in the month of June alone, more aid than was distributed in the previous five months combined, for a total of roughly $3bn, according to the US Department of Treasury.

But that total represents only 6.5 per cent of the more than $46 billion in rental aid approved by Congress during the coronavirus pandemic, and housing advocates have repeatedly warned that prematurely ending federal, state and local eviction bans without getting that assistance to vulnerable households could endanger millions of Americans who have fallen behind on rent.

More than 11 million renters are behind on rental payments, according to the Center on Budget and Policy Priorities.

More than 2.5 million of those households have annual incomes of less than $25,000, and another 1 million earn less than $35,000, according to US Census Bureau data collected by the National Low Income Housing Coalition.

A federal moratorium on evictions through the US Centers for Disease Control and Prevention is set to expire on 31 July.

“I can understand why taxpayers would be concerned if they are at risk of being evicted. There’s no question about that,” US Housing and Urban Development Secretary Marcia Fudge told a House committee on 20 July.

“The money was held up because they didn’t have the assistance or the capacity to get it out fast enough,” she said. “Personally, I have been calling mayors and governors and others to say, ‘We’ve got to get the money through the system’ ... What we’re seeing today is that the number of resources that are getting out is increasing exponentially every month.”

The number of households receiving assistance grew by 85 per cent in June from May and nearly tripled since April, the Treasury Department reported on Wednesday. Last month, 290,000 households received aid.

“This represents significant progress, but there is still much further work to go to ensure tenants and landlords take advantage of the historic funding available to help cover rent, utilities, and other housing costs and keep people in their homes,” the agency said in a statement from the White House.

Despite a rising number of households receiving assistance to pay off months of rent and housing costs following the economic fallout from the public health crisis, state and local governments have struggled to get it into their hands.

The administration has urged state and local governments, legal aid organisations, court systems and community groups to help raise awareness of available aid and speed up relief.

“Funds are still not flowing fast enough to renters and landlords,” the Treasury Department said. “Treasury is continuing an all-out effort, in coordination with the White House and interagency partners, to get the word out about the availability of rental assistance and to support grantees in ramping up their efforts.”

An assessment by Eviction Lab from the moratorium’s first six months reported more than 163,000 eviction filings from September through February – a 44 per cent spike from what the organisation would report in a typical year.

Those filings also include cities and states with strong protections against evictions during the pandemic. At least 1.55 million fewer eviction cases were filed nationwide in 2020 than in a typical year, according to Eviction Lab.

But in the six states and 31 cities the group tracks, landlords filed for more than 444,000 evictions during the pandemic, including more than 6,000 within the second week of July, according to its status report.

“If the CDC eviction moratorium expires or is overturned before those funds are expended, millions of renters would be at immediate risk of losing their homes,” Diane Yentel, president of the National Low Income Housing Coalition said in a statement last month. “The result would be an historic wave of evictions, with tremendous, harmful consequences to individuals, communities, and our nation’s public health.”

The CDC measure applies to individual renters making $99,000 or less and couples earning less than $198,000 or living in “congregate housing” who must declare that they are unable to pay for housing because of Covid-19-related hardships and risk homelessness if evicted.

Joe Biden’s American Rescue Plan – a $1.9 trillion package to combat the crisis – extended the moratorium and provided billions of dollars in rental and housing assistance, although housing advocates and progressive lawmakers have sought permanent or long-term solutions to the housing crisis and have revived calls to cancel rent and mortgage payments.

The moratorium was extended several times during the pandemic. A federal judge recently argued that the order does not have the legal authority to impose a nationwide moratorium on evictions, a ruling challenged by the US Department of Justice.

On 24 June, the CDC extended the moratorium for a “final” time.

While the freeze on evictions has halted an immediate crisis, lawmakers, housing advocates and a group of bipartisan mayors in 33 cities, among others, have warned that temporary fixes cannot address the lasting impacts of the nation’s affordability crisis.

While the Emergency Rental Assistance programme is “helping develop a new national infrastructure for rental assistance and eviction prevention that did not previously exist” and is scaling quickly, available data has shown an uneven response.

Illinois, the Treasury Department, notes, “went from reporting zero assistance deployed in May to being the second highest provider of rental assistance among all grantees in June”, according to the Treasury Department.

Emergency Rental Assistance programmes in Texas and Virginia have helped distribute more than $137m and $155m in assistance, respectively, while Rhode Island did not disperse any funds until May, when it paid out $100,000 to assist six households, according to agency data.

Last month, New Orleans officials reported that the $42m it was set to receive in rental aid covered only half the number of applicants.

While home sales have surged during the pandemic despite higher prices, the boom has locked in existing racial disparities and higher cost burdens, according to a recent report from the Harvard Joint Center for Housing Studies.

More than 80 per cent of renters who earn less than $25,000 spent more than 30 per cent of their income on housing, and a majority spent more than half of their income on housing, the report found.

Meanwhile, nationwide rates of homelessness have grown for the fourth consecutive year, the Housing Department found.

On a single night in January 2020, two months before the declaration of the pandemic, roughly 580,000 people – or about 18 of every 10,000 people in the US – were experiencing homelessness, a more than 2 per cent increase from 2019.