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Subject: ECO

As Emergency Rental Assistance Programs Ramp Up, Abt Study Finds the Allocation Formula Is a Main Driver of Underspending


ROCKVILLE, Md., Jan. 19, 2022 /PRNewswire-PRWeb/ -- With eviction moratoriums expiring and the cost of housing soaring, the failure to spend federal Emergency Rental Assistance (ERA) funds was understandably a major concern of policymakers and the media in the summer and fall of 2021. Research released by Abt Associates and the National Council of State Housing Agencies (NCSHA) documents two main reasons for this underspending. The first was the complicated process of creating and implementing a new federal program. The second was a congressionally mandated allocation formula that provided a disproportionate share of funding to states with smaller populations. As states and localities have completed the process of implementing and scaling their programs, the allocation formula remains a key driver of underspending.

Abt's studies, commissioned by NCSHA, look at the causes of early delays and apparent underspending, as well as the effectiveness of the formula used to distribute funding to grantees.

Findings
In July 2021, Abt held individual discussions with program staff managing emergency rental assistance programs in eight states: California, Illinois, Kansas, Maine, Oklahoma, South Dakota, Tennessee, and Virginia. These states were selected by NCSHA to reflect programs that differed in several ways, including geographic and population diversity, the sizes of the first round of ERA funding (ERA1) allocations they received, and ERA1 spending rate as of May 2021, among other characteristics.

To better understand the need for emergency rental assistance in different states, Abt reviewed 10 estimates of rental debt published at different times during the pandemic and compared the estimates to Congress' appropriations and allocations for the first and second rounds of ERA funding.

Abt's review determined that the model published by the Federal Reserve Bank of Philadelphia offered the most comprehensive and realistic analysis of the overall need for rental assistance during the pandemic. The model uses state-level unemployment levels to estimate the number of renters financially impacted by the pandemic, and then estimates their total rental debt based on income (including COVID-specific benefits like enhanced unemployment insurance and stimulus payments) and housing costs. Application of the Federal Reserve Bank of Philadelphia's model to the state level confirms that many states with smaller populations received a disproportionately high share of funding.

"Our research underscores that creating a new program like ERA entails a range of implementation challenges that take time to address," said Abt Project Director Stephen Whitlow. "As we've seen in recent months, ERA spending has accelerated as states and localities have completed their start-up and scaling phases and ramped up to meet the need."

"It's clear that the ERA1 allocation formula did not equitably reflect states' emergency rental assistance challenges," added Abt's Director of Housing and Community Initiatives, Jeffrey Lubell, who was also involved in the research. "In the future, it may be advisable to consider alternative allocation models. For example, emergency rental assistance could be allocated based on the number of extremely low-income households in each state or locality and adjusted to reflect variation in rent levels."

"NCSHA engaged Abt Associates to conduct this important research to shed light on the practical realities of estimating emergency rental assistance need and implementing effective programs to meet it," said NCSHA Executive Director Stockton Williams. "The research provides context for efforts to date and an analytic foundation for future policy development at all levels of government."

Read the full reports online.

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About Abt Associates

Abt Associates is a global consulting and research firm that combines data and bold thinking to improve the quality of people's lives. We partner with clients and communities to advance equity and innovation?from creating scalable digital solutions and combatting infectious disease, to mitigating climate change and evaluating programs for measurable social impact?and more.

Media Contact

Eric Tischler, Abt Associates, 301-347-5492, [email protected]

 

SOURCE Abt Associates


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