U.S. Treasury says on pace to exhaust most rental aid funds by mid-2022

March 30, 2022

WASHINGTON (Reuters) – U.S. Treasury officials are urging municipalities to divert part of their shares of $350 billion in state and local COVID-19 aid to help struggling renters stay in their homes as the Emergency Rental Assistance runs short of funds this summer.

The Treasury said on Wednesday that the $46.6 billion program aimed at preventing evictions has disbursed or obligated over $30 billion to renters and landlords through the end of February, and is on pace to exhaust the “vast majority” of its funding by mid-year.

The program, launched in January 2021, struggled for the first few months to get up and running as communities did not previously have infrastructure to prevent evictions and counsel renters facing job loss.

To avoid an abrupt cut-off in rent and utility assistance, the Treasury said some state, local and tribal governments have allocated some $3.75 billion from their allocation of State and Local Fiscal Recovery Funds to replenish exhausted local rental assistance programs.

That separate, $350 billion COVID-19 aid program allows for broad spending discretion and is emerging as a significant social policy tool.

The rental assistance program, enacted in two tranches in December 2020 and in March 2021, has kept eviction rates during the pandemic well below historical averages, Deputy U.S. Treasury Secretary Wally Adeyemo said in a statement.

“As these emergency funds run out, now is the time for state and local governments to leverage this infrastructure to provide services like right-to-counsel programs and housing counselors that will help families avoid economic scarring long after COVID-19 is in the rear-view mirror”.

(Reporting by David Lawder; Editing by Chizu Nomiyama)