Rural States Refusing Federal Housing Aid

“Governor Pete Ricketts, a Republican, has declined to spend $120 million in federal housing assistance funds, claiming the aid risks turning Nebraska into ‘a welfare state,’” according to an article in the Boston Globe by Pranavar Baskar [potential paywall].

Nebraska isn’t the only state to pass on federal funding in recent months—“hundreds of millions of that money is going unused,” according to Baskar, despite the $46 billion Emergency Rental Assistance Program's track record of success. The funding has helped stave off an estimated 1.3 million evictions, according to housing experts cited in the article. A similar redistribution of the program's funding was threatened in January 2022, as states like Georgia, Arizona, Wisconsin, and Louisiana were slow to spend their share, according to a New York Times article published at the time.

Despite the obvious need for housing assistance in rural parts of the country, the Biden administration is now responding to three states' refusal to spend their share of the program's funding by redirecting the funding to more populous parts of the country.

“In March, the Treasury reclaimed $377 million in rental aid, including $11 million from Nebraska, $45.3 million from Montana, and more than $39 million from West Virginia. North Dakota returned nearly half its funds. The federal government then sent that money to New York, California, and New Jersey — states that clamored for more help to weather a severe housing crises,” according to the article.

This isn’t the first time in history that Republican leadership at the state level has refused the largesse of economic stimulus spending. Then-Florida Governor Rick Scott (R) infamously rejected federal funding for high-speed rail during the Obama administration in 2011. That money was eventually redirected to California.