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Federal rental aid program undergoes change to meet shifting demand

The Treasury Department said it will begin redirecting more than $1 billion in untapped funds to "high performing" areas.
Image: Gene Sperling
Gene Sperling, who leads the oversight for distributing funds from President Joe Biden's $1.9 trillion coronavirus rescue package, speaks during the daily briefing at the White House, on Aug. 2, 2021.Susan Walsh / AP file

A record amount of federal rental assistance was put into the pockets of struggling renters by state and local governments in November, as the Biden administration initiates changes aimed at providing more funds to areas with high demand.

The Treasury Department said Friday that $2.9 billion was distributed to 665,000 tenants and landlords in November through the Emergency Rental Assistance program, one of the few remaining federal pandemic benefits helping keep people in their homes.

In announcing the figures, the agency said eviction filings "remain well below pre-pandemic levels," an assessment supported by data from Princeton University's Eviction Lab that shows filings in the six states and 31 cities it tracks have remained low since the federal eviction moratorium ended in August.

The $46.5 billion rental aid program was created by Congress to help low- and moderate-income households that are behind on their rent and utilities amid the pandemic. In the early months, funds were slow to find their way to those in need, but Friday's data suggests the money is being distributed at a much faster pace.

The Treasury Department estimated that roughly $25 billion to $30 billion in funds were spent or allocated by the end of December.

"The good news is that after a challenging start, a large number of places have upped their game and sped up distribution enough that up to $30 billion may have already provided or committed to 3.5-4 million families," Gene Sperling, who oversees pandemic aid in the Biden administration, said in an email to NBC News.

"The hard math that comes with this encouraging news, however, is that it also means there is going to be less excess funds available to for states who have made significant request for extra funds,” he added.

Tenant advocates who raised concerns about the pace of payments earlier in the pandemic said the November data is welcome news, while noting the short-term nature of the program.

Diane Yentel, CEO of the National Low Income Housing Coalition, said the number of payments to tenants is a good sign, "but there’s much more work still to be done."

“With back rent paid, these families have a clean slate and some housing stability to start the year," she said in a statement. "The improved distribution ... has kept eviction filings below historic levels and kept many low-income renters in their homes. But there’s much more work still to be done — many struggling renters have yet to receive needed assistance, and long-term solutions to keep families stably housed are badly needed and long overdue."

In the meantime, the Treasury Department is starting to shift more than $1 billion in unused funds from states and localities to "high performing" areas, ones that have distributed at least 65 percent of rental assistance.

Some states have also shifted funds within their borders. Georgia voluntarily reallocated $50 million to Fulton and DeKalb counties, which includes Atlanta, while Wisconsin moved $61 million to Milwaukee and Arizona redirected $39 million to Maricopa County, the state's most populous county.