Effective Deployment of Louisville’s ERA Funding: Lessons Learned

In January 2021, with a looming eviction crisis caused by the COVID-19 pandemic, the first U.S. Emergency Rental Assistance (ERA) program made funding available to assist households with rent and utilities. The challenge: how to ensure that those resources reach the people who need them the most.

By August 2021, eight months after the ERA program was launched, local governments had distributed only about 30% of the allocated funding. To address this slow deployment of funds, the Department of the Treasury developed new policies that would make it easier to get the money to vulnerable families. It also started highlighting promising practices to support local entities.

Although these policies are vital, it is important to understand the resources needed to implement them. As Clare Wallace, the executive director of South Louisville Community Ministries, noted, “What we put together is a shed of two-by-fours and duct tape, and what we really need is a house with a foundation.”

In this two-part series, we first describe the problem of eviction and then use the case of Louisville, Ky., to identify key strategies needed to provide rental assistance, such that people don’t get displaced.

Evictions

Evictions are often thought of as associated with having a lower and more volatile income. In his book Evicted: Poverty and Profit in the American City, author Matthew Desmond argues that evictions, for many, can be a beginning of hardships that trap families and individuals. An eviction results not only in losing one’s home, but also losing possessions; having a court record, which makes finding other residences more difficult; having difficulty maintaining a job; having to switch children’s schools; adding stress; and affecting mental health. The pandemic has also shown that having a home and access to clean water are cornerstones of people’s well-being.

It has been two years since the pandemic started, and data from the Census Bureau's Household Pulse Survey (week 42: Jan. 26-Feb. 7, 2022) suggest that housing stability and evictions still present a challenge.

• Nearly 16% of adults (older than age 18) living in renter-occupied housing units were not caught up on rent payments. Although this number is lower than the peak of 20% in January 2021, it has remained (above 14%) throughout the pandemic.
• Of those who were not current on payment, 43% said they were either very likely or somewhat likely to have to leave the house in the next two months because of eviction. The graph below shows the likelihood of evictions for the seven Eighth District states, with Kentucky having the highest response for “very likely” to be evicted.
• Of adults (older than age 18) living in renter-occupied housing units, 11% said they had no confidence in their ability to make the following month’s payment. By comparison, 12% said the same in April 2020 when these data were first collected.

Emergency Rental Assistance Programs

With millions of people without jobs and at risk of eviction, the federal government initiated two Emergency Rental Assistance programs. The first, ERA1, was enacted on Dec. 27, 2020, under the Consolidated Appropriations Act of 2021 and provides up to $25 billion for housing assistance. The second, ERA2, was enacted on March 11, 2021, under the American Rescue Plan Act of 2021 and provides up to $21.5 billion.

Funds are provided to states, U.S. territories, local governments, and (for ERA1 only) American Indian tribes and Tribally Designated Housing Entities to distribute to households. Local entities determine who is eligible, what to fund and how to distribute funds based on federal guidelines. Local entities may have their own additional ERA funds and existing programs.

According to data released by the U.S. Treasury, by December 2021, $14.8 billion had been disbursed to support more than 3 million unique households across the country. Of those households, 87% had a household income equal to or less than 50% of their area’s median income.Area median income is the household income of the middle household in a region, often calculated for every metropolitan area in the country. A breakdown by type of assistance suggests that 53% of the households received money toward rental assistance, 55% toward rental arrears, 11% toward utilities and 24% toward utility arrears.These percentages add up to greater than 100 because a household might receive multiple types of assistance. Assistance was directly provided either to the tenant or to the landlord and utility companies providing services.

Lessons from Louisville

Reflecting on data made available by the Treasury, the graph below shows the cumulative share of dollars disbursed by Louisville and Jefferson County, three additional local governments within the Eighth District, and the national average. Although Louisville was allocated the highest amount of funding relative to the three other localities, it was able to design a system to disburse the dollars more quickly.

How did Louisville design this system of rent relief? Here are some key lessons learned so far:

• Community-based organizations play a key role in implementing ERA fund distributions and in ensuring relief reaches those with the greatest needs. For example, South Louisville Community Ministries oversees the rent application process for Louisville, which is complicated and time-consuming for tenants. It also launched the StopMyEviction.org website as a place to post the most up-to-date information on resources for avoiding eviction.
• Collaboration among community-based organizations and state and local entities, along with frequent communication, is vital to recognizing and overcoming barriers. In Louisville, both governmental and non-governmental stakeholders attended weekly virtual meetings to discuss their goals and approaches to deploying ERA funds.
• Relevant information is not always available, so organizations need to be innovative. For example, many Louisville residents were unaware of, or unable to attend, eviction hearings. A local volunteer visited the court to gather information about daily evictions and communicated that information to others who could reach out to citizens being affected to inform them about their impending evictions.

In part two of this series, we will highlight more lessons from Louisville. We will also discuss ongoing challenges to sustaining its efforts and potential solutions for preventing evictions.

Notes and References

1. Area median income is the household income of the middle household in a region, often calculated for every metropolitan area in the country.
2. These percentages add up to greater than 100 because a household might receive multiple types of assistance.