The U.S. Department of the Treasury (Treasury) released data on the third round of allocations from the second tranche of Emergency Rental Assistance (ERA2) funds. Reallocation is a process in which Treasury transfers funds from grantees determined to have “excess” funds to grantees with additional needs. This round of reallocation was based on spending through September 2022. In the third round of ERA2 reallocation, Treasury reallocated just over $521 million. In total, over $4.8 billion of ERA1 and ERA2 funds have been reallocated since September 2021, the majority of which have remained in the same state. This trend has prevented Treasury from fully addressing disparities between states’ initial ERA allocations.
Eighty-seven grantees – 73 local grantees and 14 state grantees – received reallocated funds in this round. Approximately 53% of funds were reallocated to local grantees. The amounts received by local grantees ranged from $51,000 (Reno, Nevada) to $51.4 million (Columbus, Ohio). The vast majority of funds reallocated to Columbus were redirected from the State of Ohio. Funds reallocated to state grantees ranged from $512,000 to $68.1 million. Across the three rounds of ERA2 reallocation, the grantees receiving the most funds are the State of California ($195.9 million), the State of New York ($167.7 million), and the State of New Jersey ($112.3 million), representing a 9%, 14%, and 40% increase in their initial ERA2 allocations, respectively.
In this round of reallocation, 63 grantees – 52 local grantees, 10 state grantees, and Puerto Rico – were subject to reallocations by Treasury. Nearly 70% of the reallocated funds were taken from state grantees, ranging from $60,000 (Lake County, Ohio) to $120.5 million (the State of Ohio). The State of Ohio accounted for 23% of all funds reallocated in this round. All the funds taken back from Ohio’s state grantee were reallocated to local grantees within the state.
As required by statute, initial ERA allocations were largely based on population, with no state receiving less than $352 million between the two tranches of funding. This procedure resulted in some states receiving a disproportionately small allocation of ERA funds per cost-burdened, low-income (CBLI) household. The reallocation process gave Treasury the opportunity to address these disparities. Nearly six out of every ten reallocated dollars have remained in the same state, resulting in disparities being addressed in limited ways. For example, the three states that received the lowest initial ERA allocation per CBLI household are New York ($1,667), California ($1,940), and Nevada ($1,990). Thus far – between both ERA1 and ERA2 reallocations – New York’s allocation per CBLI household has increased by 18%, California’s allocation has increased by 12%, and Nevada’s allocation has increased by 2%. The District of Columbia has seen the largest increase in allocation (19%), from $5,814 to $6,913 per CBLI household. The state with the largest decrease in allocation per CBLI household is South Dakota, which had an initial allocation of $9,078 but now has an allocation of $2,448 per CBLI household, after the reallocation of nearly $183 million.
Judging from the most recent Treasury guidance, NLIHC anticipates an additional round of ERA2 reallocation based on spending through December 2022.
Data on reallocations to the general pool can be found at: https://bit.ly/3GXN1u3.
Data on voluntary reallocations to designated entities can be found at: https://bit.ly/43PjpZu.