Most Rental Assistant Funds Not Yet Distributed, Figures Show

Just $1.7 billion in funds intended to prevent eviction were disbursed in July as the White House braces for a Supreme Court decision that could strike down its eviction moratorium.

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The $46.5 billion rental aid program created to pay rent accrued during the pandemic continues to disburse money at a slow pace, as the White House braces for a Supreme Court order that could strike down a new national moratorium on evictions.

The Emergency Rental Assistance Program, funded in the two federal pandemic relief packages passed over the last year, sputtered along in July, with just $1.7 billion being distributed by state and local governments, according to the Treasury Department, which oversees the program.

The money meted out was a modest increase from the prior month, bringing the total aid disbursed to about $5.1 billion, figures released early Wednesday showed, or roughly 11 percent of the cash allocated by Congress to avoid an eviction crisis that many housing experts now see as increasingly likely.

That cash was slated to be spent over three years, but White House officials — who have spent months pressuring local officials and tweaking the program to make access easier — had hoped states would have spent much more by now.

“About a million payments have now gone out to pay back rent for families — it is starting to help a meaningful number of families,” said Gene Sperling, who oversees the operation of federal pandemic relief programs for President Biden.

“It’s just not close to enough in an emergency like this to protect all the families who need and deserve to be protected. So there is still way more to do and to do fast,” he added.

Data released by the Census Bureau on Wednesday illustrated the magnitude of the eviction risk.

An estimated 1.2 million households are very likely to face eviction for nonpayment of rent over the next two months, according to the bureau’s periodic Pulse survey, which extrapolated national totals from a pool of about 70,000 respondents who answered a survey this month.

Of the roughly 2.8 million households that have applied for aid, only about 500,000 reported receiving assistance — another 1.5 million are waiting for approvals, while nearly 700,000 have been rejected, according to the estimates.

And those are just the tenants who have tried to get access to the program: Over 60 percent of vulnerable renters have not even applied.

To speed things up, Treasury announced another round of changes to the program, including a directive to local officials that they allow tenants to use self-reported financial information on aid applications as a first, rather than a last, resort, while granting permission for states to send out bulk payments to landlords and utility companies in anticipation of federal payouts to tenants.

They are also expanding existing initiatives to prevent evictions at properties funded by the Department of Housing and Urban Development, the Agriculture Department and the Department of Veterans Affairs.

Mr. Biden’s domestic policy staff has mapped out policy contingencies if the Supreme Court strikes down the moratorium, which is the administration’s principal safeguard for hundreds of thousands of low-income and working-class tenants hit hardest by the pandemic. White House lawyers expect a court decision this week.

Mostly, the response will entail doubling down on existing efforts to speed up flow of the aid. But officials are likely to switch to a triage model, focusing on a handful of states and cities that have weak tenant protections, high backlogs of unpaid rent and low use of the federal rental assistance fund.

The moratorium was initially put into effect by the Centers for Disease Control and Prevention in September under President Donald J. Trump. Mr. Biden extended it several times this year, but allowed it to briefly expire earlier this month. He reinstated it, in a slightly modified form, on Aug. 3 under pressure from congressional Democrats.

That final 60-day extension, enacted over the objection of White House lawyers, was intended to buy more time to distribute the emergency rental assistance.

The program is administered by the federal government, but it is up to states to build out a system to deliver aid to struggling renters and landlords, and that has been the main source of its problems.

Treasury Department and White House officials acknowledged on a conference call Tuesday evening that the program was not ramping up fast enough to entirely prevent a wave of evictions, even if the justices allow it to remain in place until its scheduled expiration on Oct. 2.

[Read more on why it’s been so challenging getting aid to renters.]

But they also cited progress. State and local agencies have begun to steadily increase payments to hundreds of thousands of households that were at risk of eviction, with most of those going to low-income tenants. They also believe the pace of payments has continued to accelerate in August.

Administration officials continue to blame the program’s struggles on local officials, many of whom are reluctant to take advantage of the new fast-track application process, which allows tenants to self-certify on applications, freeing them from the need to provide detailed documentation.

The new guidance emphasized that applicants can “self-attest” to declare their eligibility for rental aid without the need for additional documentation. The Treasury Department believes that this will expedite the process by reducing cumbersome paperwork requirements.

The Treasury Department also took action to empower nonprofit organizations to more quickly provide relief to tenants who are facing eviction.

In recent weeks, local officials have complained that moving too fast on aid applications could lead to errors, fraud and audits; the White House has countered by telling them that those risks are insignificant compared with a wave of evictions hitting tenants who did not get their aid quickly enough to keep a roof over their heads.

“They can and should use simpler applications, speedier processes and a self-attestation option without needless delays,” Mr. Sperling said.

Several states, including Texas, have been particularly effective in ramping up their aid distribution systems, officials said. But many others — especially New York, Florida, Tennessee, Ohio and South Carolina — have been sluggish, making tenants especially vulnerable to displacement once the moratorium is lifted, they said.

But there are signs that things might be changing: New York released only a minuscule portion of its funding by Aug. 1, but has spent about $200 million in the last few weeks, according to a spokesman for the state agency that disburses the aid.

Gov. Kathy Hochul of New York, who was sworn in this week, has said speeding up the system is one of her top priorities.

States that have not used much of their money by the end of September could see their funds reallocated to other states that have been able to distribute it more effectively.

It will take local housing courts weeks to clear the backlog of eviction cases delayed by the moratorium. But many owners, especially small landlords, have rejected the federal aid, arguing that evicting nonpaying tenants is not only their right but the most effective way of ensuring their revenue is not interrupted in the future.

Last week, Wally Adeyemo, deputy Treasury secretary, traveled to Hyattsville, Md., to talk to landlords, tenants and administrators of a rental assistance program that has had success by using self-reported applications and census data to determine eligibility.

Administration officials, worried that a new moratorium could be struck down at any time, are also turning to state courts — which adjudicate tenant-landlord disputes — to help deliver aid, by pressuring landlords to accept federal payments instead of proceeding with evictions, and educating tenants, who often have no legal representation in court, on their right to apply for assistance.

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