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Is Rental Assistance Getting to Those in Need?

Regional Matters
June 3, 2021


As we reported last fall, residential renters have been acutely impacted by the economic consequences of the pandemic. Most renters continued to make rental payments on time, but policymakers remain concerned about vulnerable renters who were already struggling with low income and high housing costs prior to the pandemic. The “eviction cliff” expected in January was temporarily avoided as the Centers for Disease Control and Prevention (CDC) eviction moratorium was extended from December to March 2020 and again to June 2021. Falling virus case counts and widespread vaccination availability have coincided with economic recovery, and federal legislation passed in December 2020 and March 2021 has designated more than $46 billion toward helping struggling renters. Still, many renters face financial instability and looming rental debt owed from missed payments. This post examines how residential renters in the Fifth District are doing and how recent emergency rental assistance funding might address household rental debt accumulated during the pandemic.

What Do We Know About Renters in the Fifth District?

Results from the U.S. Census Household Pulse Survey April 14-26, 2021, wave (Week 28), show that 82 percent of renters in the Fifth District (85 percent nationally) reported they were caught up on rent payments. This is on par with the September 16-28, 2020, wave and an improvement from the November 11-23, 2020, wave (Week 19), when 78 percent of renters in the Fifth District reported being behind on rent payments. However, there is significant variation among states in the Fifth District; eighty-eight percent of renters in the District of Columbia reported being caught up on payments, compared to only 76 percent in South Carolina. 
In contrast to the November survey, results from the April survey suggest that Fifth District renters report improved ability to meet household expenses and increased confidence in their ability to make rent payments even as respondent employment has remained relatively consistent. (See chart below.)

Respondents across the district report improved confidence since the November 2020 survey in their ability to make their next rent payment but significant variation in the share of renters reporting “high confidence” among jurisdictions. (See chart below.)

How renters are meeting their usual household spending needs, which includes housing costs, has evolved since September. (See chart below.) More than one-third of Fifth District renters reported using their latest round of stimulus payment to cover expenses, and nearly one-quarter are relying on credit cards or loans. Only 7 percent of renters relied on unemployment insurance (UI), compared with 16 percent and 17 percent in the two earlier waves. Sixty-four percent reported relying on pre-pandemic data sources, which would include household labor income, up slightly from the previous two waves.

Federal, state, and local orders have protected most renters impacted financially by the pandemic from eviction, though evictions have persisted in some areas. As the current federal eviction moratorium expiration approaches on June 30, the renewed threat of eviction and rental debt are a concern for many renters, and estimates of the scale and distribution of rental debt vary. A Stout report issued last fall projected $34 billion in rental debt by January 2021. Prior to the American Rescue Plan and CDC moratorium extension, a report from the Urban Institute and Moody’s Analytics projected that 6.8 million renters would owe more than $40 billion in back rent, late fees, and utility payments by May 2021. More recently, the National Equity Atlas estimated that 5.76 million U.S. households, or roughly 14 percent of renter households, were behind on rent payments during the two-week period from April 14-26. Combined, these households could owe more than $18.56 billion in rental debt. In Fifth District states for which estimates are available, average rental debt for households behind on rent ranges from $2,600 in North Carolina to $4,100 in the District of Columbia. Focusing exclusively on households that have lost employment income during the pandemic, researchers at the Federal Reserve Bank of Philadelphia estimated 1.8 million renter households (5.4 percent) owed almost $11 billion in back rent in March 2021. Their report notes higher percentages of households with rental debt among female-headed households, black and Hispanic or Latino households, and households with children.

The significant variation in rental debt estimates is driven by several factors, including the timing of the analysis, the population covered, the inclusion of assumptions about housing costs, and whether financial assistance programs are included in the analysis. Even if accurate data were available on the number and geography of renters who were behind on rental payments, these figures could underestimate the financial straits of renters who are only able to pay rent on time by forgoing other payments or relying on temporary financial inflows (like stimulus payments or UI) or high-interest credit cards.

What Federal Funds Are Available for Rental Assistance?

Early in the pandemic, states and jurisdictions had the option to direct CARES Act funds, in the form of the Coronavirus Relief Funds (CRF) and Community Development Block Grants (CDBG-CV), toward emergency rental assistance. Many governments did, but the amount directed toward rental assistance programs ($3.9 billion nationally) was likely insufficient in most areas. To address the need for emergency rental assistance directly, Congress allocated $46.55 billion in funds through the Consolidated Appropriations Act of 2021 (December 2020) and the American Rescue Plan (March 2021),  to financially support households who are unable to pay rent or utilities due to the COVID-19 pandemic. Funds for both programs are distributed through the Treasury Department to states and directly to local governments with more than 200,000 residents. Within the guidance set forth by the legislation, state and local governments have flexibility to distribute the funds through new or existing programs to address rental debt and renter financial instability caused by the pandemic. The American Rescue Plan included specific allocations directed to high-need areas with a high concentration of renters impacted severely by the employment losses and high housing costs. Jurisdictions in the Fifth District received a combined $4.3 billion in emergency rental assistance funds. (See chart below.)

   Consolidated Appropriations Act (ERA1)
Funds expire: September 2022
American Rescue Plan (ERA2)
Funds expire: September 2025
 Renter Occupied Households (2019)Renter Occupied Households as a Percent of Total Households (2019)State Government Allocation ($Million)Direct Local Government Allocations ($Million)Total Allocation ($Million)State Government Allocation ($Million)Direct Local Government Allocations ($Million)Total Allocation ($Million)
District of Columbia170,58259%20002001520152
North Carolina1,403,63935%547156703432124556
South Carolina587,42330%2727434620173274
West Virginia193,60727%20002001520152

Sources: U.S. Census 2019 American Community Survey 1-Year Estimates (Table S2502); U.S. Treasury Emergency Rental Assistance Program (ERA1 and ERA2)

Overall, states have been slow to operationalize the influx of emergency rental assistance funding. Several state and local initiatives to distribute emergency rental assistance program (ERAP) funds appear to have been relatively ineffectual to date. According to periodic national surveys of 4,000 renters conducted by the Philadelphia Fed’s Consumer Finance Institute in 2020, only 11 percent of the respondents applied to local or state rental assistance programs. Just 3.5 percent of those applications were approved, 5 percent were still pending processing as of January 2021, and another 2.5 percent had already been denied. Twenty-two percent of the respondents were unaware of how to apply for rental assistance, and an additional 10 percent had not applied because they were not aware these programs were available.

How Have Fifth District States Responded to the New ERA Funding?

Emergency Rental Assistance Programs - 5th District
State Administrative EntityERA 1 GrantStart Date
MD Dept. of Housing & Community Development;$258,076,805 State contracts out to each county. Counties start by May 1
WV Housing Development Fund$200,000,00018-Mar-21
DC Dept. of Health Services$200,000,000Continued state program from 2020
VA Dept. of Housing & Community Development$524,601,619Continued state program from 2020
NC Office of Recovery and Resiliency$546,596,10418-May-21
SC State Housing Finance and Development$271,774,744 5-May-21

Source: National Council of State Housing Agencies, 2021-Updated-State-Level-ERA-Administrative-Entities

According to press reports, continuing in 2021, ERAP performance in many Fifth District states and localities has also been encumbered by administrative burdens and lack of staffing resources. For example, North Carolina’s Office of Recovery and Resiliency, originally created to address hurricane damage homes, was repurposed to provide COVID-19 rental relief in October 2020. Normally staffed by 60 employees, the office had to rapidly hire more than 200 temporary employees to help distribute its $547 million share of allocated funds to assist with back rent and utilities. Overwhelmed from the start, the office struggled to meet the demand with roughly a $400,000 backlog in already approved financial assistance payments still pending to landlords. South Carolina’s state ERAP was temporarily forced to stop accepting applications after just one week of the program’s launch in February 2021 due to limited resources, and capacity were insufficient to process the surge of applications. The program has since reopened with the additional funding and staff resources.

Maryland’s rollout of ERAP initiatives in 2021 was more decentralized than neighboring states. Since 82 percent of the state’s population reside in the eight counties receiving direct funding, the state opted not to create a single statewide application portal but to require instead that local programs accept applications by May 1. West Virginia’s Mountaineer Rental Assistance Program started accepting applications in late March. Much of the news regarding the District of Columbia’s effort to prevent evictions has focused on efforts to maintain and extend the local moratorium and the legal battles that have resulted.

Virginia’s rental assistance deployment has stood out from the other Fifth District states due to its efforts to address an ongoing eviction crisis that preceded the pandemic’s outbreak. In 2018, Princeton’s Eviction Lab reported that many of Virginia’s cities, including Richmond, led the nation in higher eviction rates. A coalition of advocates and service providers launched a successful campaign to enact legislative and administrative eviction preventative measures in 2019 and 2020. Among these measures were mandates that landlords must apply for rental assistance for the tenant before an eviction may be filed and also the creation of a state eviction diversion program that impose a court ordered payment plan for delinquent tenants. Additionally, landlords were required to provide written leases, offer extended time for tenants to pay their rent, and landlords could not evict unless a tenant refused to enter into a payment plan or missed a payment in the plan.

These permanent policy changes were in progress prior to the various temporary eviction moratoriums implemented during the pandemic. Despite the presence of moratoriums in much of 2020, the Richmond Eviction Diversion Program (EDP) still diverted a total of 413 households from the imminent potential of eviction. Those households who completed the EDP were no longer at risk of an eviction lawsuit, and landlords were willing to forgo or drop eviction proceedings.


On the surface, there appears to be more than sufficient federal funding to eliminate the various projected accumulated rental debt of the total beleaguered households across the nation including the administrative costs involved in the disbursement. Yet, a mountain of back rent remains. Why? Many states and localities were forced to quickly increase staff and struggled to build the capacity to meet the immediate challenges and needs. Virginia had the lead of seizing on the Princeton Eviction Lab’s findings in 2018 as a catalyst to mobilize and focus resources and to begin to implement structural changes to their eviction assistance process just as the pandemic was shuttering the economy. Going forward, the ability to reduce the accumulated household debt will depend on the capability of state and local rental assistance programs to build their capacity and marshal resources to meet their communities’ needs.

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Views expressed are those of the authors and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.

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