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HUD Posts Second Round ESG-CV Supplemental Allocation of $2.96 Billion from CARES Act

HUD’s Office of Community Planning and Development (CPD) on June 9 posted amounts allocated to states and localities from the second round of CARES Act supplemental funding for the Emergency Solutions Grant (ESG) program (ESG-CV). A total of $2.96 billion was allocated based on a formula created by HUD as required in the CARES Act. Another $40 million is committed to technical assistance recipients. CPD has now allocated the entire $4 billion Congress appropriated for supplemental ESG funding. Additionally, HUD posted an explanation of the formula HUD created to make the allocations.

The purpose of the supplemental ESG funding is to prevent, prepare for, and respond to the coronavirus among individuals and families who are homeless or receiving homeless assistance, and to support additional homeless assistance and homelessness prevention activities to mitigate the impact of the coronavirus.

Of the $4 billion supplemental allocation, up to $2 billion was to be distributed using the same formula used to distribute the regular, annual FY20 ESG allocations. Only $1 billion was allocated on April 1 (see Memo, 4/6).

The CARES Act requires the funds not allocated using the regular FY20 formula to be allocated directly to a state or unit of local government by a formula to be developed by HUD. That formula must allocate amounts for the benefit of unsheltered homeless, sheltered homeless, and those at risk of homelessness, to geographic areas with the greatest need based on factors to be determined by HUD. These factors may include risk of coronavirus transmission, high numbers or rates of sheltered/unsheltered homeless, and economic and housing market conditions.

The formula devised by HUD uses four variables:

  1. The share of all homeless people. HUD used the Total Homeless Count from the 2019 Point-in-Time count, which is a sum of sheltered and unsheltered homeless people. HUD gives this variable 50% of the formula’s weight.
  2. Share of unsheltered homeless. HUD notes that this double counts the unsheltered population in the variable above but provides additional funding to help places with particularly high numbers and percentages of unsheltered homeless people. This variable has a weight of 10%.
  3. Share of at risk for homelessness, based on the total number of very low-income (VLI) renter households. HUD defines a community’s rate of VLI renter households as total VLI renter households divided by all households in the community. HUD states that this variable is intended to identify poorer communities in metropolitan areas where an economic downturn is likely to leave the most households at-risk for homelessness. However, HUD states that it does not necessarily identify the places with the greatest risk of having unsheltered homeless households. This variable is given a weight of 15%.
  4. Share of at risk for unsheltered homelessness, as measured by VLI renters living in an overcrowded home or in a home that does not have a kitchen or complete plumbing. HUD explains that it wanted to identify economically strong locations with an at-risk population, and that in such locations VLI renters make ends meet by living in overcrowded homes. HUD assigns this variable a weight of 25%.

The second round allocations of ESG-CV are at: https://bit.ly/2AVgK7U

Methodology for Round 2 allocations of ESG CARES Act funds is at: https://bit.ly/2Ao5wZq  

More information about ESG is on page 4-82 of NLIHC’s 2020 Advocates’ Guide.