New Relief Coming From Washington – What Does This Mean For Rental and Utility Assistance?

Through the new Emergency Rental Assistance Program, Governors and local officials are providing emergency rental and utility assistance for effected individuals and families.


by Jordan Hynes and Michael Bonino-Britsch

Throughout the pandemic, Governors worked to protect the health of their constituents while providing economic assistance to those whose livelihoods have been disrupted. Through the new Emergency Rental Assistance Program, Governors and local officials are providing emergency rental and utility assistance for effected individuals and families.

The Coronavirus Response and Relief Supplemental Appropriations Act 2021, which became law Dec. 27, 2020, included $25 billion for Governors and local officials to assist residents struggling to pay their rent and utilities.. The law also extends the Centers for Disease Control and Prevention’s eviction moratorium, which took effect in September, through Jan. 31, 2021.

On Jan. 5, the Treasury Department announced a fast-approaching funding application deadline and released additional guidance for the new Emergency Rental Assistance Program. States, territories and local governments had to certify their eligibility by Jan. 12, 2021 to receive part of the $25 billion. State and local governments that have certified should expect to receive funds by Jan. 26.

As with the CARES Act’s Coronavirus Relief Fund , the Treasury Department will distribute the funds to states, tribes, territories, the District of Columbia and units of local government with populations exceeding 200,000. The commonwealth of Puerto Rico, the United States Virgin Islands, Guam, the commonwealth of the Northern Mariana Islands and American Samoa will share $400 million of the funds. Indian tribes eligible for last fiscal year’s Native American Housing Block Grant program can also apply for a total of $800 million of the funds.

As with the Coronavirus Relief Fund, local governments with populations of 200,000 or more can apply for funding directly from the Treasury Department. State allotments are reduced by the sum of all local awards, and the portion of a state’s allotment that can be provided directly to local governments is capped at 45 percent.

With this new funding, Governors will have the ability to stand up critical assistance initiatives for up to 12 months, plus an additional three months, if necessary, to ensure housing stability. Any funds not obligated by the state, territory or local government by the end of this fiscal year will be reclaimed by the Treasury Department.

This new federal emergency rental and utility program builds on the Governors’ efforts during the pandemic to support stable housing for working families.

Nearly 440 mortgage, rental and utility assistance programs supported by CARES Act funds have been established across all states, including 68 state-level programs in 43 states, and 310 local programs. States had utilized a combination of three main funding streams to provide rental assistance: Community Development Block Grants for short-term housing assistance; Emergency Solutions Grants (ESG-CV) for eviction prevention; and the Coronavirus Relief Fund. For example, Arkansas partnered with local governments, nonprofits and other organizations focused on homelessness prevention in order to distribute $23 million in CARES funding. New Hampshire also set aside $35 million in Coronavirus Relief Funds to provide relief to New Hampshire renters and landlords.

As unpaid utility bills mount as a result on the pandemic, 36 states issued temporary moratoriums on utility disconnection and late bill collection. As moratoriums expire, Governors are exploring how best to support households in need with utility support. For example, Governors in states such as New Mexico and Michigan are leveraging CARES Act funding to supplement the Low-Income Home Energy Assistance Program (LIHEAP) with additional payments for those households unable to pay bills due to COVID-19. Of note, Governor Andy Beshear of Kentucky leveraged federal stimulus funding to establish a $15 million Healthy at Home Utility Assistance Fund that expands bill assistance to water and sewer utilities, which are otherwise eligible for LIHEAP payments.

As need has outpaced available resources in recent months, many COVID housing assistance programs have closed. This new infusion of federal dollars can jumpstart these needed community supports. Whereas eight out of 10 rental assistance programs created or expanded in response to COVID-19 had supported limited short-term (one to three months) assistance, new funding available through the Emergency Rental Assistance Program can support households for up to one year.

As the COVID-19 pandemic continues, state and local programs will remain essential for providing housing stability. New, abundant resources through the Emergency Rental Assistance Program enable Governors to take the reins on determined and collaborative action with local leaders to help alleviate rental and utility insecurity for individuals and families.

Program Guidelines

Eligibility

Households below 80 percent of the area median income with an obligation to pay rent, WITH:

  • a household member who has a reduction of income or other financial hardship due to COVID-19; or
  •  a household member who has experienced or is at risk of experiencing homelessness or housing instability.

Administration

  •  Agencies must expend at least 90 percent to pay for rent and rental arrears, utilities and home energy costs including arrears, and other housing expenses resulting from the pandemic.
  • Required prioritization for
    • – Households at or below 50 percent of area median income
    • – Households with one or more members currently unemployed for at least 90 days.
  •  Rental assistance payments are dispatched directly to landlords or utility providers, with exceptions for landlords who do not agree to accept such payments.
  •  Required submission of quarterly reports to the Treasury Department and the U.S. Department of Housing and Urban Development, detailing the uses of funds.