This State Gave Out All of its Rental Assistance Funds -- and Is Now Getting $87.3 Million More

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  • New Jersey has exhausted its $625 million in federal emergency rental assistance funds.
  • Now, the state is getting another $87.3 million to help tenants who still need financial aid.

Tenants in need of aid aren't out of luck.

Many people lost their jobs in the course of the COVID-19 pandemic. And those who landed in that boat and didn't have money in savings to fall back on quickly got behind on essential bills, including rent.

Early on in the pandemic, a federal eviction ban was put into place to prevent a massive homelessness crisis. Specifically, landlords could not remove tenants on the basis of non-payment as long as that moratorium was in place. But that ban expired last year, and now tenants who are behind on rent face eviction once more.

In some states, that's more of an issue than others due to having a larger percentage of renters. New Jersey is one of them.

Recently, New Jersey used up its initial allocation of federal emergency rental assistance funds. But now, it's getting another round of funding -- albeit at other states' expense.

A lifeline for New Jersey tenants

New Jersey has already given out the initial $625 million it received in federal emergency rental assistance funds. On a positive note, the state has doled out aid to nearly 68,000 households.

But there are still tenants in the state who are behind on rent and need assistance. And so now, New Jersey is getting another $87.3 million in funding.

That extra money will now be used to process rent relief applications from the state's waiting list. New Jersey is also rolling out a $500 million eviction prevention program, which is designed to help tenants pay their rent for up to two years.

Obviously, this is good news -- for New Jersey, that is. But it's not great news for the states that are losing money due to not having dispersed it quickly enough.

That's right -- the federal government has given out all of its emergency rental assistance funds. And so these new rounds of funding are coming as a result of the government taking back funds allocated to states that haven't yet used it up.

Some of those states may have a much smaller percentage of renters than New Jersey, so they may not have as pressing a need for funding. But that doesn't mean those states don't need some of the money being taken away from them.

An imperfect system

For months, many states came under criticism for not rolling out rent relief programs quickly enough. Part of the problem, though, was that they had little time to put those programs into place.

In fact, it's easy to argue that once lawmakers approved a total of $46 billion for rent relief purposes, the federal government should've stepped in to oversee the process of giving that money out, just as it was tasked with distributing stimulus checks. Instead, it sent money to states and made the rollout of rent relief programs their problem.

Now, some states are losing funding they might actually still need. And while renter-heavy states are benefiting from that system, it's an imperfect solution to the problem at hand.

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