Update From Washington, D.C.
Treasury Department Releases Guidance on Local Recovery Fund, Emergency Rental Assistance
May 13, 2021
On May 10, the U.S. Department of Treasury released guidance that governs the implementation of the American Rescue Plan Act’s (ARPA) Coronavirus State and Local Fiscal Recovery Funds. Pursuant to ARPA, every county in the country will receive direct, flexible aid to help meet ongoing pandemic response and economic recovery needs. Funds may be used to support public health expenditures, address the negative economic impacts caused by the public health emergency, replace lost public sector revenue, provide premium pay for essential workers, and invest in water, sewer, and broadband infrastructure. Within these broad expenditure categories, states and local governments have the flexibility to decide how best to use the funding to meet specific community needs.
In total, California counties are in line to receive nearly $7.7 billion. The recovery dollars will be deposited in two tranches, with 50 percent of the funds provided this month and the balance distributed roughly 12 months later. Additional information regarding the implementation of the Recovery Fund, including the Interim Final Rule, a Fact Sheet, and a Frequently Asked Questions (FAQ) document, can be found here.
The revised FAQ includes these new provisions:
- Direct-to-Tenant Assistance: Programs will be required to offer assistance directly to renters if landlords choose not to participate. This will ensure that renters do not lose their homes when landlords act in bad faith. The guidance also reduces (by half) the time programs must wait to provide assistance directly to renters after landlords refuse to participate. Furthermore, programs will be able to offer assistance to renters without first conducting outreach to their landlords.
- Self-Attestation: The new guidance strongly discourages ERA programs from establishing burdensome documentation requirements that would make it more difficult for the lowest-income and most marginalized renters to receive aid. It also provides alternative ways to verify eligibility. High documentation barriers prevent renters – often those with the greatest needs – from receiving assistance.
- Prioritizing Households with the Greatest Needs: ERA programs must report on how they will meet the statutory requirement to prioritize households with the lowest incomes. This requirement enforces greater accountability to help ensure state and local governments serve those households most at risk of eviction
- Federally Assisted Households: The new guidance prohibits ERA programs from denying assistance to federally assisted households, noting that failure to do so may violate civil rights laws. Individuals living in federally assisted housing typically have extremely low incomes and are particularly vulnerable to losing their homes.