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U.S. Treasury says it is on pace to exhaust most rental aid funds by mid-2022 – Metro US

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

Residential homes in the Magnolia neighborhood are visible under the
Residential homes in the Magnolia neighborhood are visible under the backdrop of the Olympic Mountains and low fog over Smith Cove in Seattle

By David Lawder

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 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 of rental aid funding, the Treasury said some state, local and tribal governments have allocated some $3.75 billion from their allocations of State and Local Fiscal Recovery Funds for rent, mortgage and utility assistance as well as other eviction and prevention services.

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.”

The Emergency Rental Assistance Program reported about $1.93 billion spent on rent, utilities and arrears in February, compared to $1.94 billion for January and $2.45 billion in December 2021. It aided 462,552 households in February.

(Reporting by David LawderEditing by Chizu Nomiyama and Chris Reese)

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