Millions of renters across the country are facing unprecedented instability, owing $12–$17 billion in back rent as of mid-September.
Though the Centers for Disease Control and Prevention’s national moratorium halts evictions through the end of 2020, this temporary fix has already faced multiple challenges in federal court (PDF) and still leaves an estimated eight million renter households vulnerable. Eviction risk is highest for women of color, who are more likely to be primary financial providers for a household than their white counterparts, hold lower-paying and riskier jobs in essential industries, and were already facing eviction at alarming rates.
Rental assistance is needed fast, but with limited progress toward more federal COVID-19 relief, state and local governments are largely responsible for finding the funds. COVID-19 response has left states strapped for cash and forced to make difficult decisions about how to use the additional Coronavirus Aid, Relief, and Economic Security (CARES) Act funds for housing and homelessness programs—which still isn’t enough to keep renters in their homes.
States, counties, and local governments can look beyond competitive and underfunded US Department of Housing and Urban Development programs to fill gaps in rental assistance funding.
Under TANF’s flexible guidelines, states can play a larger role in supporting renters
Temporary Assistance for Needy Families (TANF), a fixed federal block grant of $16.5 billion distributed to states yearly, is most commonly associated with cash welfare. But cash assistance is just one of many TANF-funded programs and makes up a small portion of state spending.
In 2018, states only spent 21 percent of state and federal funds on cash assistance. Flexible federal spending guidelines give states the power to determine spending priorities and regulations, making TANF well positioned to fill funding gaps in rental assistance programs and giving states broad discretion in spending priorities (though the latter has allowed some states to divert TANF dollars to programs that do not benefit families facing the greatest financial need and impose regulations that exacerbate racial disparities in welfare access).
During the COVID-19 pandemic, states’ policymakers can loosen TANF regulations, such as work activity requirements and income thresholds, to reach more renter families. But broadening eligibility for cash assistance alone is still not enough to cover housing costs; the monthly TANF benefit for a family of three covers fair market rent in just two states.
Nonrecurrent, short-term benefits are best equipped to meet renters’ needs
Evidence suggests nonrecurrent, short-term (NRST) benefits, often called TANF diversion payments, are better suited than cash assistance to help renters avoid eviction. NRST benefits are usually a lump sum equal to around four months of cash assistance payments and address short-term needs, including rent delinquencies, court fees, and utilities.
Although federal NRST requirements are less restrictive than cash assistance requirements, it’s still up to states whether NRST benefits can provide sufficient financial assistance for renters. States that set maximum payments below the four-month federal standard, count NRST benefits toward the 60-month lifetime cash-assistance limit, and create long periods of TANF ineligibility can increase financial instability for renters and reduce the program’s effectiveness at preventing eviction.
States can expand NRST benefits using TANF reserves, which totaled more than $5.1 billion in 2018. In Georgia, a coalition of more than 60 organizations have called on the governor to use TANF reserves and unobligated NRST funds for rental assistance and eviction prevention.
Though public data on TANF reserves and spending during the pandemic are not available, 2018 data suggest states that commit accumulated reserves and NRST funds to eviction prevention can make a huge dent in rental assistance funding gaps.
Three ways states can ensure TANF funds are used to prevent evictions
How can state and local housing policymakers, practitioners, and advocates assess the viability of TANF for rental assistance? Our new brief offers a few suggestions.
1. Assess and change state restrictions so NRST benefits can help more at-risk renters
NRST regulations differ widely by state. In 2018, Virginia offered four months of diversion benefits or a maximum payment of $2,560, but New Jersey provided a maximum payment of $750. In four states, people could receive the maximum payment as often as needed, but people living in Kentucky could only obtain benefits once in a 24-month period and twice in their lifetime. This variation suggests states could open up NRST for emergency assistance to prevent more people from facing an eviction.
The only federal rule governing state changes is that states must notify the Office of Family Assistance at the US Department of Health and Human Services within 30 days. States can choose to align their regulations with inclusive federal guidelines.
2. Prioritize cross-departmental collaboration
State and local governments can work across departments to assess which rental assistance programs TANF can support to scale up or expand. This can help existing programs adapt to the current crisis, share resources, and ensure consistency in marketing and public communication.
Montana was one of the first states to develop a new emergency rental assistance program for at-risk renters who lost income because of COVID-19. The state repurposed TANF funds marked for down payment loans for multifamily housing, instead offering one month of rent or security deposit assistance for low-income families for as long as they showed a need.
The state housing financing agency worked closely with the Montana Department of Public Health and Human Services, which manages TANF, to identify best practices for assistance administration and ensure rental assistance efforts were not duplicated.
By tapping into TANF to offer emergency housing assistance, Montana was able to prioritize the most at-risk families before the state received any CARES Act funds.
3. Ensure emergency rental assistance reaches renters facing the biggest eviction risk
One of Montana’s biggest implementation challenges was balancing the need to distribute funds quickly and the importance of identifying the people most at risk of eviction.
The Emergency Rental Assistance Priority Index and mapping tool can help local decisionmakers facilitate targeted program outreach and allocation of limited resources to the neighborhoods that need it the most.