States and localities may have to give back emergency rent aid if they don't start distributing more of it; only 11% so far

Estimated percentage of renting households in arrears, June 23 to July 5, based on Census Bureau's Household Pulse Survey. Surgo Ventures map; click the image to enlarge, or click here for an interactive version.

Nearly 6.2 million households owed $16.8 billion in back rent in August, according to The National Equity Atlas. Congress authorized $46.5 billion in emergency pandemic rent aid, but state and local programs have only distributed 11 percent of that to renters facing eviction. If they don't start disbursing more aid soon, some agencies may have to give money to areas doing a better job.

"The Biden administration put grantees on notice through new guidance issued Wednesday that the Treasury Department is prepared to claw back unspent funds and reallocate the money to other jurisdictions," Andrea Noble reports for Route Fifty. "If grantees, including state and local governments, have not dispersed their first round of allocated funds by Sept. 30, the department is required to 'recapture excess funds that have not been obligated … and reallocate those resources to high-performing jurisdictions that have obligated at least 65% of their original allocation.'"

Half the emergency assistance was distributed to state and local governments in December and the second half in March. "Only about $5 billion of the first tranche of funding has been spent, according to Treasury Department data detailing payments through the end of July," Noble reports. "The pace at which money is being distributed to renters hasn’t drastically improved over the summer, even as the nationwide eviction moratorium expired and was replaced by a new moratorium that covers only some jurisdictions with high rates of coronavirus transmission."

The Treasury's new guidance included recommendations for how to speed up aid distribution. That includes streamline the application process by dropping documentation requirements that have significantly slowed things down. Applicants can self-attest to some things such as financial hardship, risk of homelessness or household income when documentation isn't available, the Treasury recommended. "The guidance also indicates that state and local grant programs can provide advance bulk rental assistance payments to large landlords and utility providers based on an estimated amount of eligible debt," Noble reports. "In addition, the guidance allows state and local programs to partner with nonprofits to provide assistance to renter households at risk of eviction while their applications are being processed."