Treasury Department Outlines the ERA Reallocation Process

September 27, 2021
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The Treasury Department released new data on the Emergency Rental Assistance (ERA) program that shows “significant growth” in the number of households receiving this aid. But not everywhere is getting ERA out fast enough, and this week, the department will begin the process of identifying and reallocating excess funds.

“While many jurisdictions have more work to do to meet the urgent demand for this relief in their communities, grantees saw significant growth in August—particularly among state and local agencies that adopted the Treasury’s recommended best practices ,” the department stated in a press release.

More than 420,000 households received ERA in August —up from 340,000 in July, and previous Treasury data showed that more than 60% of the renters being served are the most at risk of eviction, with incomes at or below 30% of area median incomes. Since January, more than $7.7 billion has been distributed from the $46 billion made available by the Consolidated Appropriations Act of 2021 (ERA1) and the American Rescue Plan (ERA2).

“When the Emergency Rental Assistance Program launched earlier this year, there was little state and local infrastructure to deliver emergency rental assistance—most rental assistance grantees needed to start programs virtually from scratch. Nonetheless, many programs have proven an ability to accelerate aid effectively, with 119 state and local agencies having expended more than half of their first rental assistance funding allocation (ERA1) ,” according to the department.

The federal agency highlighted several programs that it deems a success:

  1. Albuquerque, New Mexico
  2. Gwinnett County, Georgia
  3. Los Angeles
  4. Miami-Dade County
  5. City of Nashville and Davidson County, Tennessee
  6. New Jersey
  7. New York
  8. North Carolina

For grantees that have not used the majority of their ERA, Deputy Secretary Wally Adeyemo wrote in a new letter that there would be “escalating consequences if a state or locality fails to demonstrate progress in using its ERA1 funds or implementing the flexibilities Treasury has made available.”

Adeyemo said the framework of Treasury's approach to reallocation will include:

  1. Making additional funds available to high-performing grantees based on demonstrated need;
  2. Identifying “excess funds” for reallocation through a fair approach based on transparent benchmarks;
  3. Providing grantees with advance notice and a fair process;
  4. Striving to keep reallocated funds within the same state;
  5. Implementing reallocation gradually over a period of months;
  6. Collaborating with grantees on voluntary reallocations; and
  7. Consulting with tribes and territories.

“Treasury anticipates releasing detailed reallocation guidance in the coming days.”

Read the full announcement.

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