Rental Assistance in 2021: Impact & Eviction Risk in 2024

With states running out of funding, it's unclear as to what happens next.

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Key points

• Federal rent relief funds prevented a massive wave of evictions as intended.
• Now that many states have lost or exhausted their funds, evictions could pick up.

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When the COVID-19 pandemic first erupted, it caused a widespread wave of job and income loss. Not surprisingly, a lot of people quickly fell behind on their housing payments, including renters and homeowners alike.

Protections were put into place in 2020 to prevent a homelessness crisis. These included a federal eviction moratorium and the option for mortgage borrowers to put their home loans into forbearance for up to 18 months.

Those protections have since run out. In their place, mortgage loan servicers have been pressured by watchdog agencies like the Consumer Financial Protection Bureau to work with struggling borrowers to help them stay in their homes, and $46 billion in federal rental assistance funds were allocated to help tenants catch up on past-due payments.

So far, those rent relief funds have done what they were intended to -- prevent an eviction crisis. In 2021, an estimated 1.36 million tenants avoided eviction as a result of that aid.

At this point, though, many states have already distributed all of their rental assistance funds. And those that haven't may have had those funds clawed back by the federal government and redistributed to states with a greater need that managed to move more quickly in getting that aid out. It therefore raises the question -- will eviction activity pick up this year now that many states are out of money for rent relief?

There's still some money to go around

While some states are no longer accepting applications for rent relief, aid is available in some parts of the country, most commonly at the city or county level. And so tenants who have not managed to catch up on past-due rent should contact their local housing offices and see what options are available to them.

It's also worth noting that while many states have closed their rent relief portals for applications, they're still working through a backlog of existing applications. Once processed, more tenants could be in line for relief.

But still, at some point, the $46 billion allocated to rental assistance is going to run out on a national level, and local programs will cease to be able to offer up funds to help tenants get caught up on rent. And once that happens, an uptick in evictions could ensue.

That said, there's reason to be hopeful that things won't be so bad. For one thing, the economy is much stronger now than it was back when those federal rent relief funds were first put into place. It may be more feasible now for tenants behind on rent to boost their income and make their landlords whole.

Also, some landlords may opt to not move forward with evictions for unpaid rent if their tenants are now paying steadily. Eviction can be a costly, time-consuming process for landlords. And it's one that some may try to avoid -- if not out of the goodness of their hearts, then out of a desire to avoid a hassle.

Tenants should seek out relief

Many cities and counties have managed to free up money for rent relief. Those who are still behind on rent payments shouldn't hesitate to see what options they have.

The same applies to homeowners who are struggling to make mortgage payments. Some local housing relief programs aren't limited to rental assistance, but rather, also have funds available to help cover mortgage obligations. Anyone struggling on the housing front should research local options before giving up.