The U.S. Department of the Treasury (Treasury) released new data on reallocations of the initial appropriation of Emergency Rental Assistance (ERA1). The release of the data marked the second of several rounds in which Treasury will reallocate “excess” ERA1 funds from grantees that did not meet required expenditure benchmarks to grantees with additional needs. In the second round of reallocation, just over $1 billion was reallocated, with 53% of reallocated funds remaining within the same states to which the funds were originally awarded. Between the first two rounds of reallocation, four state grantees voluntarily or involuntarily reallocated more than 50% of their initial ERA1 allocations.
Treasury is statutorily required to reallocate ERA1 money from grantees with “excess” funds to grantees in need of additional resources. Grantees that did not meet a 40% expenditure ratio by November 30, 2021, were determined to have “excess funds.” Treasury calculates a grantee’s expenditure ratio by dividing the grantee’s total expenditure of ERA1 funds on assistance by 90% of the grantee’s ERA1 allocation.
Treasury released updated reallocation documents that detail which grantees had funds involuntarily reallocated and which grantees voluntarily reallocated funds and that identify the recipients of these funds. In the second round of reallocation, more than $1 billion was reallocated; about 62% of funds ($623 million) were voluntarily reallocated and 38% of funds ($384 million) were involuntarily reallocated. About $534 million was reallocated to grantees within the same states to which the funds were originally awarded. Of the funds reallocated to grantees within the same states, $455 million was voluntarily reallocated and $78 million was involuntarily reallocated. Just under $473 million was reallocated to grantees in different states.
Thirty-eight grantees had a portion of their ERA1 funds reallocated in this round. Three grantees voluntarily reallocated over $100 million of their allocations, including Georgia ($148 million), Wyoming ($107 million), and Ohio ($100 million). Between the first two rounds of reallocation, four state grantees reallocated more than 50% of their ERA1 allocations: Wisconsin reallocated 51% of its initial ERA1 allocation; Nebraska reallocated 61%; North Dakota reallocated 76%; and Wyoming reallocated 84%.
One hundred and twenty-seven grantees received reallocated funds in this round. The five grantees that received the most reallocated funds were California ($149 million); New York ($119 million); Cuyahoga County, OH ($51 million); Texas ($48 million); and New Jersey ($45 million).
Treasury will likely base a third round of reallocations on January spending data that was released in early March. Another reallocation of ERA1 funds will occur at some point after March 31, 2022, at which point Treasury may recapture any unobligated ERA1 funds.