Through the 2021 American Rescue Plan Act, Congress allocated $350 billion in flexible Coronavirus State and Local Fiscal Recovery Funds (SLFRF) to state and local governments. Both the legislation and subsequent guidance from the US Department of the Treasury made clear that several housing-related uses were permissible with the funds—providing a unique opportunity to launch large-scale and innovative housing solutions.

In this brief, we use program data reported by SLFRF recipients and qualitative interviews with local program administrators to gain a deeper understanding of how localities are directing the funds to affordable housing development and preservation efforts and what challenges and opportunities they have encountered in using the funds for this purpose. Based on our findings, we highlight several implications for federal policymakers and provide recommendations for how future federal funding can be structured to reduce barriers for localities attempting to address affordable housing needs.