Large cities and counties have committed approximately 11% of their total State and Local Fiscal Recovery Funds (SLFRFs) to housing projects, according to a new analysis.

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Part of the American Recovery Plan Act of 2021 (ARPA), the flexible funds are intended to help localities and states support economic recovery after the COVID-19 pandemic and can be used in a variety of ways, ranging from supporting health programs to investing in infrastructure.

As of the end of December, local governments with populations greater than 250,000, have used the SLFRF program to invest $6.7 billion toward housing projects, accounting for about 11% of the $58.8 billion appropriated to date.

Roughly two-thirds of these investments have been focused on homelessness services and affordable housing developments, reveals an analysis from Brookings Metro, National League of Cities, and National Association of Counties.

The update reflects data from 15,283 projects reported by 92 cities and 244 counties to the Treasury Department.

“One of the largest and longest-running investments that we’ve been seeing are investments targeting homelessness,” says Glencora Haskins, senior research analyst and applied research manager at Brookings Metro, citing how families became at risk of homelessness, the housing market became more unaffordable, and shelters had to reduce their capacity to help people in need during the pandemic.

Initially, many communities used the SLFRF program to alleviate some of these immediate pressures. Later, cities and counties began to look at broader uses and solutions.

“Across the board, we’ve classified most of funds that have been deployed over the last couple of years as going into two main buckets: We have rescue versus revitalization,” Haskins says. “At the beginning of the program in 2021 and 2022 when the pandemic was still very top of mind and the health crisis was still raging, most of the investments were going to very acute specific relief programs like rental assistance and homeless shelter assistance. As it’s gone on, cities and counties have become a little more forward looking and put money into longer-ranging, long-term investments like affordable housing.”

The study shares examples of the different ways communities have deployed their funds. In Travis County, Texas, officials have worked with local nonprofits on a supportive housing collaborative to build housing and provide services for people experiencing homelessness. In Cook County, Illinois, officials have invested in providing full-time behavioral health support for residents in properties managed by the housing authority.

According to the new report, about $2.24 billion has gone toward homelessness programs, $2.18 billion to affordable housing, $1.64 billion to rental assistance, and $616.6 million for other housing investments.

While the appropriations represent a major commitment to addressing the affordable housing crisis, the funding has been slow to reach projects, according to researchers.

“Though obligations for affordable housing projects have largely kept pace with appropriations—meaning local governments have been making headway in selecting contractors and service providers to deploy these committed funds—expenditures have lagged,” says the report. “As of the end of 2023, affordable housing accounted for one-third of all dollars committed to housing projects, but just over a fifth of expenditures made toward these projects.”

Long-term projects such as affordable housing can be very transformative for communities, but they take time to execute because they require community partnerships and infrastructure improvements, Haskins says.

Local governments have until the end of this year to obligate their allocated funding. The expenditure deadline is the end of 2026.

There’s likely not a huge risk of housing projects running against the obligation deadline, but there’s still urgency, according to Haskins.

“The housing crisis is becoming worse,” she says. “These investments are designed to target real pressures that have emerged in the housing market that are not going away anytime soon. As local governments continue to think about how they are going to get this funding out the door, the speed imperative is making sure that the people experiencing homelessness or at risk of eviction in their communities are receiving relief.”