The U.S. Department of the Treasury (Treasury) released new data on reallocations of Emergency Rental Assistance (ERA1) funds. The release details data from the third round of ERA reallocation, a process in which Treasury transfers funds from grantees determined to have “excess” funds to grantees with additional needs. In the third round of ERA1 reallocation, Treasury reallocated just over $464 million. In total, just over $2.59 billion of ERA1 funds have been reallocated since September 2021.
Treasury is statutorily required to reallocate ERA1 funds from grantees with “excess” funds to grantees in need of additional resources. In a press release issued earlier this year, Treasury stated it would reallocate excess funds in a way that leaves grantees with an amount of ERA1 funds equal to what grantees had spent in their strongest quarter. Grantees must spend any funds from their initial ERA1 allocation by September 30, 2022, so this approach aims to ensure that ERA1 funds will not go unused.
In the third round of reallocation, 35 grantees – 25 localities, six states, and four territories – had funds reallocated. In the third round, 61% of funds were reallocated from state grantees, with two state grantees reallocating over $60 million each. Territories, which were not subject to reallocation prior to April 2022, had $115 million reallocated, or approximately 25% of all funds reallocated in the third round.
Since ERA1 reallocation began, seven state grantees have either voluntarily or involuntarily reallocated over 50% of their initial ERA1 allocation. In most instances, at least a portion of these funds were transferred to local or tribal grantees within the same state.
In the third round of reallocation, over $401 million was transferred to grantees in a different state and $63 million was given to grantees within the same state. More than 78% of funds went to state grantees and the District of Columbia, one-fifth of funds went to local grantees, and just under 2% of funds went to tribal grantees.
Considering what grantees received over the three rounds of ERA1 reallocation, the five grantees that received the most funds are: California ($310.8 million); New York ($245.8 million); New Jersey ($128.9 million); Texas ($96.2 million); and the City of Indianapolis ($91.5 million). Grantees that received reallocated ERA1 funds have until December 29, 2022, to use them.
In March of this year, Treasury modified ERA1 reallocation guidance to state that after June 30, 2022, Treasury would consider whether additional reallocation of unobligated funds was appropriate to ensure ERA1 funds were distributed by the statutory deadline of September 30, 2022. It is unclear whether these data include those additional reallocations, or whether a final round of reallocation data will be released in the coming weeks.