89% of federal rent assistance unspent as eviction crisis looms

WASHINGTON – About 89% of federal rent assistance approved by Congress remains unspent, despite President Joe Biden’s efforts to encourage states and cities to withdraw money faster amid a crisis of potential eviction is looming.

The Treasury Department released updated payment figures on Wednesday that show states and cities distributed $ 1.7 billion to homeowners and tenants in July, a modest 10% increase from the 1.5 billion dollars distributed in June.

In total, states and cities have spent $ 5.2 billion of the $ 46.5 billion in rental relief allowed by COVID-19 rescue programs since December – of which $ 4.7 billion has gone directly to households and the rest to administrative costs. About 11% of the total federal funding allocation has now been dispersed.

One of the six tenants is estimated to be behind on rent, according to the US Census Bureau’s Household Pulse Survey.

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Yet in many states, landlords and tenants have struggled to get approval for funds designed to help tenants unable to make payments during the pandemic.

Several states hired third-party vendors to lead the programs, necessitating lengthy procurement processes that delayed the initial deployment of funds. Computer systems in several states malfunctioned, preventing tenants from applying. Some states require tenants to provide more documents than required by federal law, which experts say has created unnecessary barriers to obtaining money.

Distressed tenants were granted a reprieve this month when the Centers for Disease Control and Prevention issued a targeted moratorium on evictions in areas hardest hit by the coronavirus. But the new directive, which bans evictions in counties with high COVID-19 transmission rates, expires on October 3 and the freeze is facing legal challenges.

The Treasury Department called the latest figures “continuous progress,” noting that the funds have helped nearly one million households. About 341,000 households received rental assistance in July, up from 293,000 households in June. The ministry also announced new guidelines to try to speed up the release of the money.

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This includes allowing applicants to self-certify, rather than providing documents, to prove their financial hardship, risk of homelessness or housing instability, and income. States and cities can also partner with nonprofits to offer cash advances to households facing eviction and make additional payments to landlords who hire tenants who face major hurdles in securing a lease.

Campaigners protest against evictions near City Hall on August 11 in New York City.  New York State's current moratorium on evictions is set to expire on August 31.  The Emergency Rent Assistance Program, which was created in the state budget and is intended to cover one year of rent and utility bills for tenants of 80% or less of the square footage.  median income, has struggled to cope with the thousands of cases of tenants facing eviction.

About $ 25 billion in federal money was poured into states and cities in February to help tenants unable to make payments amid the pandemic, followed by approval in March of $ 21.55 billion more in Biden’s US bailout.

To receive money from the Emergency Rent Assistance Program – first funded by Congress in December – tenants must apply in tandem with their landlords. Larger cities or counties in most states typically run their own rental assistance programs in addition to those run by the states.

Eligible tenants, according to federal law, must have suffered a loss of income due to the pandemic, be at risk of losing their home, and have a family income of 80% or less than the median income for the region. The money usually goes directly to the owner.

Contact Joey Garrison on Twitter @joyegarrison.

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