To prevent widespread evictions and ensure that rental apartment providers – especially small homeowners – do not go under financially because tenants cannot pay the rent, the federal government has allocated $ 46.55 billion in ERA to tenant households1 through the Consolidated Appropriations Act of 2021 ($ 25 billion) and the American Rescue Plan Act ($ 21.55 billion). Implemented by state and local governments to expedite payout starting June 30, 2021
On average, tenants seeking help received $ 4,753 in rent, arrears, or utilities equal to 4.3 months' rent. Local governments, with a payout rate of 20%, pay out twice as quickly as state governments with a payout rate of 10%. Nationally, $ 3.01 billion, or 12.7% of the $ 23.785 billion allocated to state and local governments, was paid out through June 30, 2021. However, some states / municipalities have been more successful in reaching out to distressed tenants by partnering with grassroots organizations and businesses, using data from other existing programs to reduce reporting requirements, and using data analytics to predict communities where renters are located are in need and then specifically pursue efforts in these areas.
Since 6.5 million tenant households still have no rental income, it is important to take advantage of this rent subsidy to prevent evictions and to repay the renters the lost rent so that they remain financially viable and can continue to offer rental apartments over the long term. Of the 6.5 million tenant households that have failed to collect rent, 58.5% live in 1 to 4 units, 72% of which are homeowners.4 Landlords have had the financial burden of helping tenants, with estimates between $ 21.3 billion and $ 57.5 billion. 5
Average Rent Aid of $ 4,753, which equates to a 4.3 month rent
From January 1 to June 30, 2021, $ 3,010,261,297 of the $ 23.785 billion ERA 1 allocation was disbursed by state and local governments. A total of 633,324 tenant households were looked after. Nationally, renters who asked for help received $ 4,753.
The following map shows the average rental allowance paid by the state. Nineteen states paid over $ 5,000. The highest average rental subsidies paid out were in the states of Rhode Island ($ 8,858), Illinois ($ 8,549), Hawaii ($ 7,925), Connecticut ($ 7,432), and West Virginia ($ 6,508) paid off.
The map below shows the equivalent months of rent paid out. I estimated the corresponding months for each state by dividing the average rental allowance by the average gross rent in 2019. Nationwide, the rent subsidy paid out of $ 4,753 was equivalent to 4.3 monthly rents. In 48 countries, the aid lasted 3 months. The highest months of rent allowance disbursement were in the states of West Virginia (9 months), Rhode Island (8.5 months), Illinois (8.4 months), Michigan (7.3 months), Montana (7 months), and Kentucky (May 6) , 6 months). .
Local government scholars have paid 20% of the rent allocation, and state governments have paid 10%.
June 2021, the U.S. Treasury Department's interim report reported that the states of Connecticut, Delaware, Maine, Montana, North Dakota, Rhode Island, South Dakota, Vermont, West Virginia, and Wyoming (and the District of Columbia) were only the State governments allocated ERA 1 funding. 6
Payouts have generally been slow, especially at the state government level. Between January 1 and June 30, 2021, only $ 3.01 billion of the $ 23.785 billion ERA 1 allocation was paid out, which is a payout rate of 12.7%. Only 10% of the allocation to the state governments was paid out. Local governments pay out twice as fast, with 20% of the allocation being paid to state governments. Payout rates are likely to be faster at the local government level because local governments have ongoing programs and partnerships that they can use to target and reach tenant households and landlords.
In terms of the sum of the disbursements to the total allocation by the state and local governments, Virginia has the highest payout ratio (41.3%), followed by the state of Texas (33.9%), the District of Columbia (27.5 %); Massachusetts (27%), Alaska (24.8%), Illinois (21.3%), Kentucky (17.8%), Maine (17.5%), Nevada (17.5%), Hawaii (16, 9%) and Utah (16.2%).
At the state government level, the highest payout rates were in Virginia (42.6%), Texas (34.1%), District of Columbia (27.5%), Massachusetts (27%), Alaska (20%), New Jersey (19.8%). ), Maine (17.5%), and Illinois (16.9%).
Looking only at the local governments (cities and counties) payouts, Kentucky local governments outperform all state governments in paying out the ERA 1 allocation with 85.6% of the allocation, beating the state government’s payout of 9.5%. Next up are the Iowa local governments, which paid 62% of the ERA 1 allocation.
In 22 states, more than half of serviced tenant households received support from community allocation. In New York, all tenant households received the rent subsidy from the municipal allocation. In Florida and South Carolina, 99% of tenant households that received payments received assistance from the local government allocation.
Only 10% of tenant households that fail to catch up have received rental subsidies, with tenant households in 22 states receiving the bulk of the subsidy from local governments
As of June 30, 2021, the ERA 1 program provided rent assistance to 633,324 individual households, or 9.7% of the 6.5 million households that did not catch up on rent.7 At the federal level, the state with the highest percentage Unrecognized tenant households rent increases supported by ERA 1 are Alaska (87%), followed by the District of Columbia (56.7%), Vermont (45.4%), Maine (40.7%) and Idaho (39th percentile) ,1 %).
Best Practices on How State and Local Governments Reach Tenants and Landlords
Some states / municipalities have been more successful in reaching out to distressed tenants, and their programs can serve as a model for other states / municipalities to expedite the distribution of rental subsidies. In general, these included leveraging partnerships with non-profit organizations, particularly those capable of targeting cultural / linguistic groups, and reducing documentation requirements through the use of data already available to tenants (z), use by grassroots organizations and local companies for establishing contact, simplifying the application process and using data-driven programs to identify and prioritize aid for vulnerable households.
The state of Virginia made outreach phone calls to tenants with incomplete application forms and provided translation services to reach various cultural / linguistic groups. 8
The city of Houston and Harris County, Texas are using data analytics to support their targeted outreach strategies. The data system maps ERA applications and payments and compares the actual payments with the expected payments for a neighborhood based on the CDC's Social Vulnerability Index. The program also prioritizes applicants with an active eviction case. 9
The state of Oregon uses a similar approach by using data on household size, months of rent arrears, effects of forest fires in 2020, and whether a household lives in a census area with a high prevalence of low-income renters by renting a nationally recognized think tank uses priority index to identify tenant households for the outreach and prioritization program.
The state of Massachusetts has reduced the paperwork requirements for eligibility for income if the renter lives in a subsidized home.10 Massachusetts has also reduced the documentation requirements for applicants whose eligibility can be verified through other state health and welfare programs
The state of Alaska made the ERA application easy to use by developing a cell phone application system that split the application into segments that took only 3 to 5 minutes and uses text messaging to improve application
The state of Illinois turned to grassroots networks and local businesses such as small grocery stores, linen rugs, local religious organizations, the Latino consulates, and ethnic media outlets to network with them
The state of Kentucky and other Kentucky grant recipients proactively engaged with landlords in the area to increase landlord participation rates.
Clark County and the cities of Las Vegas, North Las Vegas, and Henderson, Nevada worked with local nonprofits to access a common data system and hire temporary workers to help process applications.
The state of Maine provides the application program and materials in eight languages. Maine has also partnered with “cultural mediators” to help local immigrants such as local immigrants. B. Somali immigrants.
The state of North Carolina works with religious organizations in predominantly African American communities and coordinates with school systems serving areas in need to identify families who may be in crisis and need assistance from the ERA program.
Richland County, South Carolina uses the county's 13 libraries, which serve as convenient support centers for tenants.
The state of Ohio runs its ERA program through 47 state nonprofits that offer a variety of services.
1 The ERA 1 program consists of a three-part aptitude test based on income level, loss of income or other financial difficulties and risk of homelessness or residential instability. Renting households must have an income of at least 80% of the local median income to be eligible. A financial emergency can be proven by receiving unemployment benefits or a written certificate of any other pandemic-related financial emergency (loss of income or additional expenses). The risk of homelessness or housing instability can be evidenced by overdue rental or supply notices (including eviction notices), unsafe living conditions, or other evidence ascertained by the fellow.
2 Congress created a $ 25 billion Emergency Rent for Emergency Relief (ERA) program in the Consolidated Appropriations Act 2021 (Division N of P.L. 116-260). A second round of ERA funding – $ 21.55 billion – was incorporated into Section 3201 of the American Rescue Plan Act (P.L. 117-2). See Congressional Research Service, https://crsreports.congress.gov/product/pdf/R/R46688#:~:text=In%20response%20to%20concerns%20about,116%2D260).
3 data sources for the analysis are the US Census Household Pulse Survey from June 25 to July 3, 2021 (week 33), the US Treasury Department's interim report on ERA 1 for the period from January 1 to June 30, 2021, and the American Community Survey 2019.
4 Author's estimate based on the US Census Household Pulse Survey June 25 to July 3 and the number of tenant households paying rent from the 2019 American Community Survey. The share of rental properties that are operated by individual owners on a daily basis is estimated from the 2018 rental apartment finance survey.
5 National Equity Atlas estimates arrears of $ 21.3 billion as of July 5; Research Institute for Housing America estimates $ 41.7 billion from April 2020 to June 2021; The Urban Institute (Zandi / Parrott) estimates $ 57.5 billion.
6 The ERA 1 allocation is allocated to the state governments, but the state governments may transfer any funds received to the local authorities as long as the funds are used for eligible purposes. Local governments (counties or cities) with a population of at least 200,000 (as measured by the US Census Bureau in 2019) can also receive assistance directly from the Treasury Department, but any payments made directly to communities reduce the allocation to the state government.
7 I estimate tenant households that failed to collect rent in the week of June 25 through July 3 based on the US Census Household Pulse Survey (I exclude respondents who did not respond or who were not referred to the question (Codes 88 and 99). And I apply the percentage to the number of tenant households with rent based on the 2019 American Community Survey.
8 U.S. Department of the Treasury, make the application process simple and easy to use, https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/emergency-rental aid program