Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

Local governments scramble on U.S. home rental aid after 'use it or lose it' order

Economy Nov 05, 2021 01:52PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
3/3 © Reuters. FILE PHOTO: A "For Rent" sign is posted outside a residential home in Carlsbad, California, U.S. on January 18, 2017. REUTERS/Mike Blake 2/3

By David Lawder

BETHLEHEM, Pa. (Reuters) - Dozens of state and local governments are scrambling to explain how they plan to distribute billions of dollars in home rental aid funds in coming months as the U.S. Treasury pursues plans to reallocate unspent funds from lagging communities.

U.S. Deputy Treasury Secretary Wally Adeyemo told Reuters that every underperforming jurisdiction has contacted the department to explain how they will improve their performance under the $46.6 billion Emergency Rental Assistance Program.

Adeyemo has set a Nov. 15 deadline for state and local governments to submit formal plans to the Treasury, which will help determine which locations lose funds and which get more.

The program, aimed at preventing housing evictions during the COVID-19 pandemic, was created by Congress in December 2020 and expanded in March. It got off to a slow start, due partly to local difficulties in launching procedures to approve applications, with only $10.3 billion spent through the end of September https://www.reuters.com/world/us/us-treasury-says-distributed-nearly-28-billion-rental-aid-september-2021-10-25.

Adeyemo said in an interview that the threat of losing funds has pushed state and local governments to make better use of Treasury rules, such as reduced documentation requirements. "It's forced them to start thinking about, 'How can we use these flexibilities to keep this money?'" Adeyemo said.

Some 22 states and more than 100 local government grantees fall into that category, having spent less than 30% of their initial allocation based on Sept 30 Treasury data https://home.treasury.gov/system/files/136/September-ERA-Data.xlsx.

Those with an expenditure ratio above 65% are eligible to gain reallocated funds. (SEE graphic https://tmsnrt.rs/3GS1CW3 for state expenditure ratios).

PENNSYLVANIA SPENDING

Three jurisdictions in Pennsylvania illustrate the wide variations in spending rates - and economic needs.

The Treasury has repeatedly cited Philadelphia as a star performer, with nearly all of its $70 million in local allocations spent, thanks to innovative measures like requiring residents or landlords to apply for program funds before courts approve evictions.

Philadelphia Mayor Jim Kenney told reporters last week the city was eager to get more funds to help more residents, 23% of whom live in poverty, according to U.S. Census Bureau data https://www.census.gov/quickfacts/fact/table/lackawannacountypennsylvania,northamptoncountypennsylvania,philadelphiacountypennsylvania,PA/PST045219.

Lackawanna County, Pennsylvania, home to President Joe Biden's original hometown of Scranton, has spent only 2% of its initial $6.2 million local allocation. It could lose funds to other jurisdictions even though it has spent $2.1 million from funding allocated to the state.

Eileen Wilson, Lackawanna County's housing resources coordinator, said the county will detail plans in a Nov. 15 submission to spend the remainder its allocation. After a City of Scranton rent relief program ends, she expects a bigger pool of applicants for the county-wide program as rents increase.

"Our biggest mistake was not switching over to using the federal funds sooner," Wilson told Reuters.

Northampton County, home to Bethlehem and Easton, met an expenditure target of 51%, enough to keep the rest of its $9.1 million initial allocation, but not enough to receive reallocated funds.

Bethlehem's location, a two-hour bus ride west of New York City, has drawn an influx of residents during the pandemic, creating a very tight housing market that is pushing up rents and squeezing some local residents into homelessness, county officials said.

With homeless shelters still closed due to the COVID-19 pandemic, they plan to use funds to house more homeless people in hotels this winter - an expense allowed under the Treasury's program rules.

"I anticipate this winter burning through that money much faster when our social services agency partners identify somebody that needs to go to a hotel," said Stephen Barron, the county's fiscal affairs director.

Local governments scramble on U.S. home rental aid after 'use it or lose it' order
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email