ERA2 Spending Picks Up; Treasury Reallocates First Round of ERA1 Funds

The U.S. Department of the Treasury (Treasury) released updated Emergency Rental Assistance (ERA) spending data through November 30, 2021, revealing that an additional $1.5 billion in ERA1 and $1.35 billion in ERA2 was spent in November of last year. Overall, $16.9 billion from ERA1 and ERA2 has been spent, including funds for assistance to households, housing stability services, and administrative costs. In total, ERA assistance has reached over 3.2 million renter households. Treasury also released data on the first round of reallocations, including data on recaptured funds and voluntarily reallocated funds. Treasury reallocated $1.1 billion in this first round of reallocation, including $875.5 million in voluntarily returned funds and $239.9 million in recaptured funds.

October 2021 was the first month in which ERA1 spending decreased, and this trend continued into November. Despite this decrease, ERA2 spending doubled between October and November. This trend highlights the still-uneven performance of ERA programs. While around 150 programs have spent most of their ERA1 allocation and are transitioning to ERA2, other ERA1 grantees continue to spend slowly, with approximately 60 grantees still having spent less than one-third of their ERA1 allocations. This group includes several state grantees with high numbers of low-income renter households, such as Georgia, Ohio, and Arizona.

The Treasury data also include updated quarterly ERA1 data through the end of September 2021. In Quarter 3, 1.9 million households received ERA1 funding, 66% of which were extremely low-income households. Twenty-one percent of households served had incomes between 31% and 50% of their area median income (AMI), and 13% had incomes between 51% and 80% AMI. These data show that renters with the lowest incomes continue to be the most in need of ERA funding. The quarterly data also point to a continuing lag in application processing: while nearly 3.6 million applications were completed and submitted between the start of the program and the end of the third quarter in 2021, only 1.5 million households were served during the same period.

In addition to spending data, Treasury also released information on the first round of ERA1 reallocation. Per Treasury’s reallocation guidance, grantees needed to reach an expenditure ratio of 30% by the end of September 2021 to avoid recapture, though grantees had the chance to significantly decrease the amount of funds recaptured if they submitted a program improvement plan. Grantees also had the opportunity to voluntarily reallocate funds to other grantees within their states during this period.

During the first round of reallocation, $875.5 million was voluntarily reallocated, with most funds flowing from state grantees to local grantees and Tribal grantees. The states of Wisconsin, Indiana, Louisiana, and Tennessee all reallocated more than $100 million of their ERA1 allocations. An additional $239.9 million was recaptured from grantees that did not meet the required expenditure ratio, though Treasury data do not indicate from where these funds were recaptured. One hundred and twenty-five programs received reallocated funds, including five states, 91 localities, and 29 Tribal entities. (This group includes programs that received recaptured and voluntarily reallocated funds.) States receiving the most reallocated funds include California ($62 million), New Jersey ($42 million), and New York ($27 million). Several cities and counties also received significant fund reallocations, including Indianapolis, IN ($91 million); Milwaukee, WI ($61 million); Maricopa County, AZ ($39 million); and New Orleans, LA ($37 million).

The next round of ERA1 reallocations will be based on the recently released November spending data. For this round of reallocations, grantees will need to reach an expenditure ratio of 40% to avoid recapture. NLIHC tracks ERA spending on the ERA Dashboard and Spending Tracker. Our tracking integrates Treasury data with real-time data from program dashboards and program administrators to provide a closer estimate of how much ERA funding has been obligated to date.

Treasury’s November ERA data can be downloaded at: https://bit.ly/3thUwWD (Please note: NLIHC’s analysis of these data corrects for a presumed ERA2 Quarter 1 data reporting error in the State of Texas.)

Data on Treasury’s first round of ERA1 reallocations can be downloaded here: https://bit.ly/3JWF8Vp and https://bit.ly/31GljjY