After months of negotiations, Congress approved a COVID-19 relief package that extends the national eviction moratorium until January 31, 2021. It also provides $25 billion in funds for emergency rental assistance, funded through the Coronavirus Relief Fund and administered by the US Department of the Treasury. The funding will be distributed to state and local governments, and then eligible renter households and landlords can apply for assistance to cover past and future rent arrears and other associated housing costs.

This assistance has the potential to reach the many millions of renter households who were cost burdened before the pandemic and financially squeezed even tighter during this crisis. Back rent estimates alone range from $7 billion to more than $70 billion, so $25 billion is not nearly enough to cover all renters’ needs and keep them protected from housing instability and eviction. That’s why effectively targeting this funding will be critical. If state and local leaders want to implement emergency rental assistance equitably and efficiently, they should adopt these three principles.

Principle 1: To curb the public health risks of housing instability, distribute rental assistance to renters most vulnerable to COVID-19’s health and economic impacts.

Black, Native American, and Latinx households have suffered tremendously during the crisis. These communities already bore disproportionate and immense housing cost burdens and housing instability, stemming from decades of structural racism and discriminatory housing practices. They also have higher COVID-19 transmission rates than the average population, suggesting the pandemic is widening these disparities. To ensure funding gets to the households who need it most, state and local leaders should consider the following actions:

1. Target the populations most at risk. The Urban Institute’s Emergency Rental Assistance Priority Index estimates the level of need in a census tract based on risk of housing instability and homelessness and can help governments prioritize emergency rental assistance to keep renters in their homes.
2. Prioritize the lowest-income households instead of allocating funds on a first come, first served basis. The bill says funding can be used for renter households currently making up to 80 percent of area median income, and it prioritizes households with incomes below 50 percent of area median income. A similar program that distributed emergency rental assistance during the Great Recession found (PDF) many local governments provided assistance to higher-income households more often because they were easier to serve quickly. Renter households with the lowest incomes have the greatest housing needs and greatest risk of eviction and homelessness, and research shows that targeting assistance towards lower-income households prevents these households from experiencing homelessness.
3. Consider not capping the amount of back rent.  Data from the Eviction Lab show that median eviction claim amounts are higher in recent months than in the beginning of the year, suggesting the crisis is causing renters to fall even further behind on rent. Capping the amount of back rent each household could receive might leave these households at risk of eviction after moratoria lift.

Although the Treasury Department must send funding to state and local governments within 30 days, it also can improve impact by implementing simple guidance. A good example is a requirement that no state can restrict funding based on immigration status.Latinx households have the highest number of hospitalizations and death rates in the US and are the most likely to be working in person and close to others. Ensuring assistance can reach households with undocumented family members not only ensures support reaches those with critical housing needs but also helps stem the spread of the coronavirus. The Treasury Department may also wish to clarify whether funds can be used to rapidly re-house people who have lost their homes during the crisis.

Principle 2: Administer funding through existing channels and set aside money for small landlords.

According to research from the National Low Income Housing Coalition, more than 500 state and local governments have established rental assistance programs in response to the COVID-19 pandemic. Collectively, they have distributed billions of dollars to qualifying landlords and households. Instead of creating additional mechanisms, state and local governments should consider using existing channels, such as the rental assistance programs used to distribute Emergency Solutions Grants, to administer the new tranche of rental assistance funding.

Whatever channel they choose, state and local leaders should also consider setting aside a portion of funding for small landlords. Reduced rental collections have increased financial pressures on small landlords, especially those who own fewer than 10 properties. Targeting small landlords can help avoid some of the pitfalls of the Paycheck Protection Program, when resources flowed to businesses that had the capacity and understanding to apply for the program—not always those in greatest need of support.

Ten percent of funds can be used for housing stability services, and state and local governments could use a portion of that 10 percent to conduct outreach to small “mom and pop” landlords who may otherwise miss the opportunity. Local leaders should also streamline applications to make accessing the funding as simple as possible, removing cumbersome documentation and hardship requirements for renters.

Principle 3: To ensure long-term stability, couple relief dollars with other supportive services.

Holistic services for renters, such as rental counseling, are important to keeping families stably housed into the future. State and local governments could couple these services with relief dollars to help families negotiate with landlords and understand their rights, again using the 10 percent set-aside. Housing counseling for homeowners was implemented widely in the Great Recession and significantly lowered foreclosures and reduced delinquency for clients. Some states have already implemented renter counseling that provides financial and eviction prevention supports, based on the success of homeownership counseling.

The new emergency rental assistance package is a down payment to begin addressing housing needs resulting from the COVID-19 crisis. Because the need far outpaces the amount of relief dollars, states and localities will need to be intentional to achieve impact. They should apply lessons learned from past relief efforts, and if they follow the evidence, they can deliver relief equitably and efficiently to the most vulnerable, most affected renters.