Texas Housers, an Austin non-profit that has tracked the U.S. Treasury’s Emergency Rental Assistance (ERA) program across the state, has advised that the City of Laredo and a dozen other jurisdictions could have to return up to $103 million in unspent funds at the end of March 2022.
Of the federal allocation of $2 billion for Texas, $1.3 billion went to the State’s Texas Rent Relief (TRR) program, while the remaining $639 million was distributed to 36 Texas cities and counties to disburse ERA funds to qualifying families in peril of eviction during the COVID-19 pandemic.
Texas Housers is urging citizens and the media to contact public officials in cities and counties that have not spent the rental assistance allocations, asking that the funds go to the State’s Texas Rent Relief program, which is administered by the Texas Department of Housing and Community Affairs (TDHCA.)
Julia Orduña
According to former Laredoan Julia Orduña, who is the Southeast Texas regional director of the Texas Housers office in Houston, “The only way to ensure that these unspent funds stay in Texas to help tenants and landlords who need it, is for the City of Laredo and the other jurisdictions to enter into a voluntary reallocation agreement with TDHCA.”
Orduña said the TDHCA is prepared to accept the voluntarily reallocated funds and disburse them.
“TDHCA has the resources to do so. The only hurdle is the prompt action of the community leaders of Laredo and other cities and counties that have unspent funds,” she said, adding, “By volunteering their funds to TDHCA before the end of March, this money can remain in the Texas economy for rent relief.”
Of the 36 Texas cities and counties that received funds from the Treasury, Laredo appears sixth on a short list of 13 jurisdictions that are at risk of losing up to a total of $103,445,833 to an involuntary recapture of funds by the federal government.
The City of Laredo received its rent relief allocation in two installments, an initial $7.9 million in ERA1 and an $8.3 million allocation in ERA2.
Per the federal guidelines, all jurisdictions were required to have spent 30% of their ERA1 award by September 30, 2021, though by this date Laredo had only spent 7%, prompting the Treasury to capture $586,728.56 and reallocate it to higher performing rental relief programs in Houston/Harris County and San Antonio.
By the next ERA1 spending deadline at the end of November 2021, jurisdictions had to have spent 40% of their ERA1 award. At that point, the City of Laredo had spent only 14%. The City has continued spending ERA1 funds and has not begun to spend ERA2 money.
According to Texas Housers research analyst Erin Hahn, “Using the Treasury’s formula, we estimate that Laredo lost $1,659,701.88 in that second round of re-allocation.”
Erin Hahn
She continued, “The third round of re-allocation will be based on ERA1 spending through the end of January 2022. Jurisdictions had to have spent 50% of their ERA1 award by this date to avoid recapture. However, we do not have access to January spending data yet, so we cannot estimate what was lost in round three.”
On March 31, 2022 the U.S. Treasury will recapture all unobligated ERA1 funds.
“Based on expenditure data through December 2021, Laredo could lose ERA1 funds of up to $5,986,166,” Hahn said.
The City of Laredo disbursed $1,358,560.97 from ERA1 to 308 families.
“My colleagues have had a difficult time communicating with the City of Laredo about how the program was being implemented,” Orduña noted.
Hahn said there were no replies to correspondence twice sent from Texas Housers to individual Laredo City Council members and the Mayor that apprised them what could be done to keep ERA funds in Texas.
“We requested a meeting with them, but the only information received from the City of Laredo was through its online Open Records Portal,” she said, adding, “The conversation we have wanted to have with the City of Laredo and other entities that have large unspent ERA allocations is to advise what they can do with those balances before the Department of the Treasury reclaims them at the end of March.”
(For further information on Texas Housers’ analysis to determine that ERA rent relief funds were disbursed equitably and timely, visit texashousers.org. The site includes evaluations of the efficacy of cities and counties in terms of accountability, administrative capacity, legally obligated documentation, and communication.)
