The U.S. Department of the Treasury (Treasury) recently released additional data on voluntary reallocations from the third round of Emergency Rental Assistance (ERA1) funds; ERA1 reallocation from tribal grantees; the final round of ERA1 reallocation; and the first round of involuntary and voluntary reallocations from the second tranche of Emergency Rental Assistance (ERA2) funding. Reallocation is a process by which Treasury transfers funds from grantees determined to have “excess” funds to grantees with additional needs. Between ERA1 and ERA2 reallocation, nearly $3.7 billion of ERA funds have been reallocated since September 2021.
Of the $3.6 billion of ERA1 and ERA2 funds reallocated from state and local grantees, over 51% have been voluntarily reallocated either to another eligible grantee within the same state or to a national pool if another grantee cannot be identified (e.g., if there is only one grantee within the state). Due to the large proportion of voluntarily reallocated funds, over 60% of funds remained in the same state. Reallocated funds remaining in the same state likely helped correct for the initial allocation formula, which gave a disproportionate amount of funding to state grantees compared to local grantees.
ERA1 Reallocation: Approximately $978.6 million of ERA1 funds were reallocated between the third and final rounds from state and local grantees. Tribal grantees, which were not subject to reallocation until April 2022, had just under $35.1 million reallocated. This brings the total ERA1 funds reallocated over all three rounds to nearly $3.1 billion. Between the third and final rounds of reallocation, 60% of funds were transferred to state grantees or the District of Columbia, over one-third went to local grantees, and 3% went to tribal grantees.
ERA2 Reallocation: Just over $518.9 million of ERA2 funds were reallocated in the first round from 84 grantees (75 localities and nine states). Over three-fourths of reallocated ERA2 funds came from state grantees. While the majority of funds went to local grantees, several states received large reallocations. The grantees that received the most ERA2 funds in the first round were the State of California ($52.1 million), the State of New York ($36.4 million), Madison, Wisconsin ($33.9 million), the State of New Jersey ($30.5 million), and the State of Texas ($28.2 million).
Considering what grantees have received so far in both ERA1 and ERA2 reallocations, the grantees that have received the most additional funds are: the State of California ($459.9 million), the State of New York ($334.5 million), the State of New Jersey ($187.8 million), the State of Texas ($163.3 million), and Indianapolis, Indiana ($98.1 million).
It is anticipated that there will be three additional rounds of ERA2 reallocation. Additional information regarding the reallocation process can be found here.