Feds take millions in rent relief from Montana and give it to California and other states

Beth Torres

The California Department of Housing and Community Development (HCD) announced it received an additional $136 million from the federal government for the state’s rent relief program. This is on top of the $2.36 billion the HCD has already paid out in rent relief to assist over 206,000 low-income renters across the state. By the time the program is over, the HCD estimates it will have paid more than $4 billion in rental assistance.

Back in January, the East Bay Times reported that California’s rent relief program was running short on funds. Demand was surging as more Californians facing eviction were applying to beat the March 31, 2022 deadline to receive rental assistance.

Funding from 11 states goes to California, New York, New Jersey

One source of additional funding comes from those states that fail to spend their share of federal emergency rental assistance money by the time prescribed by the U.S. Treasury. Starting last September, the Treasury began taking back money it had originally given to some states in a reallocation process.

In this “use it or lose it” system, states that did not obligate at least 65% of their emergency rental funds were at risk of losing some of their federal money. The Treasury would then distribute the clawed back money to other states that showed a continued need for assistance and had developed systems to distribute the money.

For example, The Independent Record reported that Montana lost $53 million of its rental assistance funds when the federal government took back some of its funding. Montana’s money was “involuntarily reallocated” to states with larger populations that had been requesting more assistance, such as California, Illinois, New York, and New Jersey.

According to the article, it’s been a challenge for Montana to quickly set up the systems needed to process its huge number of applicants and distribute the sudden influx of money. This appears to be one of the reasons why the state was not able to meet the federal requirements and lost some of its rental assistance.

Montana is not alone in this dilemma. As of March, the Treasury has taken back emergency rental assistance from 11 states and 26 counties or cities and redistributed the money to other states.

Rent relief program deadline approaches

Californians interested in applying for rent relief must apply before the March 31, 2022 deadline. Financial assistance is available to both landlords and tenants. For more information, see the California Department of Housing and Community Development website.

What are your thoughts on rent relief programs?

Are these government programs doing enough to help renters and landlords? Are there better solutions to the nation’s housing problems? Let us know your thoughts in the comments section and please follow me for updates on housing, the economy, and personal finance.

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