The Coronavirus Response and Relief Supplemental Appropriations Act of 2021 provided $25 billion for an emergency rental assistance program as well as an extension on eviction moratoriums until January 31, 2021. The American Rescue Plan Act of 2021 provided an additional $21.6 billion for the emergency rental assistance program and established a $10 billion homeowner assistance fund.

Emergency Rental Assistance

Through the emergency rental assistance program, the Department of the Treasury will distribute funds to states, tribes, territories, the District of Columbia, and units of local government with populations exceeding 200,000. Agencies responsible for administering the program must allocate 90 percent of the funds for the payment of current and past-due rent, current and past-due utilities, and home energy costs, and other housing expenses resulting from the pandemic. The assistance can last up to 12 months, with an additional 3 months available if necessary, to ensure housing stability. The payment of past-due housing-related costs that could result in evictions of eligible households must be provided before the household may receive assistance for future rent payments. The remaining 10 percent of program funds can be used by agencies for administrative costs.

The administering agencies will make payments to landlords and/or utility providers on behalf of eligible households. If a landlord or utility provider is unwilling to participate, the agency may provide funding directly to eligible households.

In the NIPAs, the distribution of funds to qualified applicants for rental, utility and home energy arrears are classified as capital transfers from government to persons; this treatment recognizes that the payments are for liabilities incurred for services received in prior periods. Funds that are distributed for current period rent, utilities and home energy costs will be recorded as government social benefit payments to persons as these payments are linked to the current period production of services. The rental assistance payments are classified as transfers to persons regardless of whether the payment is provided to the landlord or the tenant to recognize the direct benefit to the tenant who has incurred the liability.

For the first quarter of 2021, BEA will record all support payments from the emergency rental assistance program, approximately $41.8 billion ($167.2 billion at an annual rate), as government capital transfers recognizing that the majority of payments will be for arrears. Payments to qualified applicants who live in the 50 states and the District of Columbia will be recorded as capital transfers to persons; payments to qualified applicants who live in the U.S. territories will be recorded as capital transfers to the rest of the world.

Data on the allocation of payments for arrears vs current period costs are currently unavailable. However, the rental assistance program prioritizes payments for arrears, which are generally expected to be higher than the currently available funding for the program. If more information becomes available in the future, BEA may revise the classification of these program payments to include government social benefits to persons.

The distribution of funds to state and local governments to cover administrative costs associated with the program are recorded as grants to state and local governments.

Homeowner Assistance Fund

The homeowner assistance fund provides funding to states, territories, and tribes to provide support to homeowners experiencing hardship due to the pandemic. The program has a mandate to prioritize socially disadvantaged households using criteria based on local and national income indicators. Funds may be used for expenses such as delinquent mortgage payments.

Consistent with the treatment of the emergency rental assistance program for tenants, payments used for delinquent mortgage payments by homeowners will be classified as government capital transfers to persons or to the rest of the world. For the first quarter of 2021, about $8.9 billion ($35.6 billion at an annual rate) will be recorded as a government capital transfer payment.

Moratorium on Evictions

A moratorium on evictions was extended until June 30, 2021. In the NIPAs, the moratorium has no direct impact on personal consumption expenditures, as housing services including tenant rents are recorded on an accrual basis.