How Can Federal Coronavirus Relief Help State and Local Governments Prevent Evictions?
As part of the Urban Institute’s exploration of policies to protect people and places from the impacts of COVID-19, researchers are examining how state and local governments can respond to the tremendous rental housing challenges presented by COVID-19. In this Housing Matters blog series, we present evidence-based ideas for how state and local leaders can stabilize housing for renters affected by the pandemic and job loss. You can find the framing post with links to each post in the series here.
About twenty million people have lost their jobs since March, and economists warn that many jobs won't come back. Eviction moratoria, federal stimulus checks, and unemployment insurance have undoubtedly helped low- and moderate-income households pay their rent and avoid losing their housing. But these are temporary patches, and moratoria have already begun to expire.
Before COVID-19, limited housing assistance funding meant many low- and moderate-income renters—especially renters of color—faced housing instability or homelessness without a safety net. Our research suggests that existing emergency rental assistance programs are not suited for this economic crisis and that state and local governments need longer-lasting, more flexible, and targeted eviction prevention programs to help renters stay housed.
Why current federal eviction prevention is not enough for states and localities during this eviction crisis
Renters often turn to local social service or homelessness prevention organizations when eviction looms. Depending on the jurisdiction, emergency financial assistance programs may have philanthropic, state, or local support, but they often depend on federal Emergency Solutions Grants (ESG) or Temporary Assistance for Needy Families (TANF). Neither program is explicitly designed or sufficiently funded to keep rent affordable for extended periods of time or to reach all households at risk of losing their housing. These limited funding streams face competing demands, and eviction prevention is often a lower-level priority than other urgent housing and financial assistance needs.
ESG funds support a range of services and can be spent on eviction prevention, but they often are not. Some local governments use ESG for emergency rent payments or other services to help people avoid eviction and retain their housing, but other governments do not believe these services are the best use of ESG funds given the pressing unmet needs among people experiencing homelessness. For example, as of 2018, ESG funds could only provide temporary beds for about 70 percent of people in need of emergency shelter. As a result, local governments often focus ESG funds on people experiencing homelessness before serving people who are housed but at risk of losing it.
TANF, which provides time-limited cash assistance and work supports to low-income families with children, has a lifetime 60-month eligibility period and is a potential source for emergency rental assistance, but it’s not explicitly designed for this use. There is no comprehensive accounting of how many states use TANF funds to help families pay rent, but 42 states plus the District of Columbia record spending on “nonrecurrent short-term benefits” (NRST), which may include a wide range of uses for families in temporary crisis, including housing assistance. In fiscal year 2018, states spent about $1.3 billion in NRST out of $28.7 billion in total expenditures. The US Department of Health and Human Services has provided states with guidance on NRST, including for housing assistance in response to COVID-19.
States and localities use both ESG and TANF funds for eviction prevention but typically for only short-term and relatively modest assistance. Federal TANF rules limit NRST benefits to four months, and though federal ESG rules are more generous, state and local governments may place shorter limits to maximize funds. Assistance is often intended to resolve short-term economic shocks, such as temporary job loss, illness, or family disruption, and may be limited to a few months’ rent or a single check per year. The new state and local programs emerging in response to COVID-19 tend to include similar elements. Given the uncertainty about how long the current crisis may last, this may be an unrealistic expectation. It may also place a disproportionate burden on people of color. For example, Black women experienced a slower recovery from unemployment after the Great Recession compared with white women.
The CARES Act also leaves state and local governments struggling to fund eviction prevention
The three main Coronavirus Aid, Relief, and Economic Security (CARES) Act resources that can help states and localities prevent evictions all have other important primary purposes that compete with rental assistance. An infusion of $4 billion to ESG was intended to help local governments lease hotels or other housing to get people off the streets and out of crowded shelters or to obtain emergency supplies. The $5 billion invested in Community Development Block Grants (CDBG) came with a waiver allowing them to be used for rent—but CDBG can also fund critical infrastructure for coronavirus testing (PDF). The most flexible CARES Act funding is the Coronavirus Relief Fund (PDF), which provides $150 billion for a broad range of uses. But eviction prevention competes with other urgent needs, such as emergency medical equipment, public health activities, or costs associated with distance learning.
For COVID-19 and beyond, longer-lasting, dedicated, flexible, and well-targeted eviction prevention funds could help state and local governments
State and local governments’ experience with pre-COVID-19 housing assistance resources and CARES Act funds provide some insights for future federal relief packages.
First, to avoid asking states and local governments to choose among different populations in crisis and competing public health needs, the federal government could consider dedicating federal funding to target eviction prevention and rental assistance at a scale that meets both COVID-19-related housing needs as well as prepandemic unmet need. This means providing extended assistance to help people pay back rent owed and stay on top of coming payments, which will be especially important given possible long-term, pandemic-related unemployment.
Second, for state and local governments to provide more robust emergency rental assistance programs, federal COVID-19 housing relief would also need to respond to housing system capacity constraints. As noted elsewhere, the housing assistance system has been depleted by years of budget cuts that reduced staff capacity and presents a challenge to rapid expansion. State and local governments are already working to modernize and expand in response to COVID-19 but will need additional waivers, guidance, and technical assistance to stand up new programs, enable remote procedures, and get funds to families and landlords quickly.
Third, for state and local governments to ensure racial equity, their rules, application processes, outreach, and spending on eviction prevention assistance would need to acknowledge the disproportionate impact that COVID-19 has had on communities of color. Black and Latino households have been disproportionately hit by the pandemic’s housing, economic and health impacts, and will undoubtedly be more vulnerable to eviction and homelessness after the pandemic. Funding and program models should affirmatively serve communities of color to ensure resources reach them quickly and equitably, with state and local governments held accountable for doing so. Current resources, however, leave critical gaps that can worsen racial disparities when the nation needs to dismantle structural racism, not perpetuate it.
Millions of renters were already in crisis before the pandemic, with nearly half spending more than 30 percent of their income on housing and well over two million eviction cases filed annually. At last count, more than half a million people experienced homelessness on a given night. The pandemic adds new urgency to meeting these existing housing needs while stabilizing households newly threatened by eviction.
Samantha Batko provided substantive contributions to this blog post; Jorge Morales-Burnett provided research assistance.
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