Iowa could lose millions in federal housing assistance
Iowa could lose tens of millions of dollars in unspent federal emergency rent assistance if state officials don’t reallocate the money to local housing initiatives before the end of this week, IMPACT director Anne Bacon tells Axios.
Why it matters: Some of the money could help create long-term housing for low-income families in Iowa.
- But programs in other states could receive large portions of Iowa’s share if spending and allocation deadlines are not met.
Catch up fast: Iowa was allocated $195 million in the first round of funding from the Emergency Rental Assistance Program approved by Congress in late 2020. The deadline to spend that money — known as ERA1 — was generally on Sept. 30.
- About $50 million of that portion was not spent or reallocated to local housing initiatives, Ashley Jared, a spokesperson for the Iowa Finance Authority (IFA) told Axios.
Of note: IFA hasn’t yet been directed to return the unused portion, Jared noted.
- Yes, but: Federal guidance shows that a return would be made after final reporting requirements are completed, which could be as late as Dec. 29.
Meanwhile: Iowa received an additional $149 million allocation — known as ERA 2. It expires on Sept. 30, 2025 but requires the state to meet spending deadlines.
- More than $89 million of Iowa's second allocation is in jeopardy of being forfeited if it is not allocated by the end of the year, Bacon said in referencing Treasury Department guidance sent to states.
Zoom in: Des Moines and Polk County were separately awarded nearly $15 million in ERA1 and $11.6 million in Era 2 allocations.
- The counties were also allowed to use $65 million of the State’s initial ERA1 allocations, which assisted thousands of families.
Driving the news: Polk County and DSM’s portions are nearly spent.
- IMPACT, the nonprofit group hired to distribute DSM and Polk County allocations, will stop accepting ERA rent assistance applications on Nov. 27.
State of play: Assistance will be extended if IFA officials approve a reallocation of the state’s ERA 2 portions that are subject to a federal claw back, Bacon said.
- Treasury officials have informed IMPACT that a voluntary reallocation must be submitted by Nov. 4 to meet deadlines, Bacon said.
The big picture: More than a dozen states have not yet met federal ERA program spending deadlines, according to Axios’ review using National Low Income Housing Coalition (NLIHC) projections.
- Iowa has had trouble spending large portions of its share because of bureaucracy issues, Iowa Finance Authority (IFA) director Debi Durham told the Register last year.
What we’re watching: Iowa has a shortage of more than 57,000 affordable rental homes, according to 2020 NLIHC data.
- Polk County is continuing conversations this week with federal and state officials to potentially use some of the state’s unused portions to help build low-income housing, Polk County Supervisor Angela Connolly told Axios Wednesday.
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