Most rental aid went unspent in August, Treasury says

The Treasury Department said Friday that state and local officials had disbursed less than 17 percent of federal rental aid as of the end of August, as bottlenecks plagued the $46.5 billion eviction prevention program eight months after its creation.

The White House pandemic relief office projected that the total amount of assistance delivered by the end of this year would total $16.5 billion at the current pace of distribution — enough to help between 60 percent and 65 percent of households at significant risk of eviction. About 2.6 million tenants are at risk of imminent eviction without aid, according to the Urban Institute.

State and local governments that have struggled to distribute the funds face a Thursday deadline to disburse 65 percent of their allocations or risk having Treasury redistribute the money elsewhere. Already, Treasury has signaled that it will provide additional funds to a handful of programs — including those in Houston, Philadelphia and New Orleans — that have proven to be the most adept at getting aid into the hands of renters and landlords.

The slow pace of aid distribution indicated that the United States still faces a potential eviction crisis stoked by the Covid-19 pandemic. The Biden administration has limited tools to stop tenants from being kicked out of their homes after the Supreme Court in August halted a federal eviction ban, a legal blow that made expediting rental aid even more urgent. Goldman Sachs economists estimated at the end of last month that renters owe between $12 billion and $17 billion to landlords, with about 2.5 million to 3.5 million households behind on rent.

With rental aid delivery not expected to accelerate in a significant way, the Biden administration is attempting to lower expectations for the performance of the assistance program in the near term.

Administration officials on a call with reporters Thursday pushed back on the idea that the percentage of funding spent is a meaningful gauge of a program’s efficacy. They noted that Congress made $25 billion of rental aid available until September 2022 and a second $21.5 billion batch of funds available until September 2025.

“To simply take the amount of money that has gone out in the first five or six months, and then compare that to what was allocated for four or five years, is just a meaningless number,” an administration official who declined to be named said.

Administration officials also told reporters Thursday that the long runway Congress established gives them flexibility to use the program beyond the emergency needs of the pandemic.

“There was an eviction crisis in this country prior to Covid,” an official said. “The timelines clearly make it possible to do something that’s more durable over time to actually make this system work better, more economically, efficiently and certainly more humanely than it did prior.”

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The Treasury Department said Friday that state and local officials had disbursed less than 17 percent of federal rental aid as of the end of August, as bottlenecks plagued the $46.5 billion eviction prevention program eight months after its creation.

The White House pandemic relief office projected that the total amount of assistance delivered by the end of this year would total $16.5 billion at the current pace of distribution — enough to help between 60 percent and 65 percent of households at significant risk of eviction. About 2.6 million tenants are at risk of imminent eviction without aid, according to the Urban Institute.

State and local governments that have struggled to distribute the funds face a Thursday deadline to disburse 65 percent of their allocations or risk having Treasury redistribute the money elsewhere. Already, Treasury has signaled that it will provide additional funds to a handful of programs — including those in Houston, Philadelphia and New Orleans — that have proven to be the most adept at getting aid into the hands of renters and landlords.

The slow pace of aid distribution indicated that the United States still faces a potential eviction crisis stoked by the Covid-19 pandemic. The Biden administration has limited tools to stop tenants from being kicked out of their homes after the Supreme Court in August halted a federal eviction ban, a legal blow that made expediting rental aid even more urgent. Goldman Sachs economists estimated at the end of last month that renters owe between $12 billion and $17 billion to landlords, with about 2.5 million to 3.5 million households behind on rent.

With rental aid delivery not expected to accelerate in a significant way, the Biden administration is attempting to lower expectations for the performance of the assistance program in the near term.

Administration officials on a call with reporters Thursday pushed back on the idea that the percentage of funding spent is a meaningful gauge of a program’s efficacy. They noted that Congress made $25 billion of rental aid available until September 2022 and a second $21.5 billion batch of funds available until September 2025.

“To simply take the amount of money that has gone out in the first five or six months, and then compare that to what was allocated for four or five years, is just a meaningless number,” an administration official who declined to be named said.

Administration officials also told reporters Thursday that the long runway Congress established gives them flexibility to use the program beyond the emergency needs of the pandemic.

“There was an eviction crisis in this country prior to Covid,” an official said. “The timelines clearly make it possible to do something that’s more durable over time to actually make this system work better, more economically, efficiently and certainly more humanely than it did prior.”

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