Air assistance

This state just turned down $120 million in federal rental assistance funds

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Millions of Americans lost their jobs at the start of the COVID-19 pandemic, when local restrictions forced many businesses to temporarily shut down. Many people who suffered a loss of income at the time and had no savings to fall back on fell behind in paying their rent.

Lawmakers have implemented a federal eviction ban in 2020 to prevent a homelessness crisis. But that ban expired last year, and since then tenants have been scrambling to catch up on their rent arrears.

The last two stimulus packages enacted have allocated a total of $46 billion in federal rent assistance funds to help tenants catch up on rent arrears and avoid eviction. This money was then distributed to the states, which were tasked with distributing it individually.

At this point, many states have used up their share of that $46 billion pot. And while some are still processing existing rent relief requests, they are unwilling to accept new ones.

That said, there is additional rent relief funds available to some states – but only if they agree. And one state recently made the decision to let that extra funding go, much to the dismay of housing advocates.

Nebraska says no to additional aid

The $46 billion that has been allocated to states for rent relief has been split into two allocations. The first $25 billion allocated was known as ERA1 and the second $21.5 billion was known as ERA2.

At this point, many states have spent their ERA1 funds, and even their ERA2 funds. But some states still have the right to lease relief funds under the latter.

Nebraska is one of them. The state had the potential to access an additional $120 million in federal rent relief funds. But Republican Gov. Pete Ricketts expressly doesn’t want the money, so he declined the option to take it.

The logic behind the move, according to Ricketts, is that the state has already received and distributed an unprecedented amount of federal funding to help struggling Nebraska tenants catch up on rent. But now, he says, those handouts should stop since the storm has passed.

Specifically, Ricketts doesn’t want Nebraska residents pressured out of work, thinking they’ll be bailed out by federal aid. But housing advocates in the state warn that the decision to withhold $120 million in rent relief funds will leave many renters vulnerable in a situation where they risk losing their homes. This especially applies to renters residing in rural parts of the state, as they tend to have access to fewer resources to begin with.

A subject of debate

Last month, Nebraska lawmakers passed a bill requiring the state to seek more rent relief funds. But Ricketts vetoed that bill. And unless lawmakers can override that veto, Nebraska will lose that funding.

The silver lining is that the money Nebraska passes on could be allocated to other states that need additional funds for rent relief. But that’s not helping Nebraska tenants who still need a lifeline.

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