Volume 31

A Review of ARPA: How Some States Are Using the Funds for Political Goals, And Ways to Prevent this Misuse in the Future

by Karina Pereira

Access to affordable housing in the United States is a significant and growing challenge, exacerbated by recent economic trends and the COVID-19 pandemic. Issues like supply chain disruptions and rising interest rates have worsened the shortage of affordable housing for both renters and homeowners. This crisis disproportionately affects low-income individuals and communities of color, who were already grappling with housing instability and high housing costs before the pandemic. Structural racism continues to play a role in these disparities. Notably, no state or major metropolitan area has sufficient affordable housing for extremely low-income renters, particularly those from marginalized racial backgrounds. The federal government allocated $350 billion through the American Rescue Plan Act to address economic impacts, and some localities used these funds creatively to increase affordable housing supply. However, some misused the funds, including building correctional facilities, which were later deemed ineligible. The Treasury Department has the authority to investigate and recoup misused funds to redistribute them elsewhere in the nation. This Note analyzes data on fund usage and offers recommendations for federal policymakers to ensure future funding effectively addresses affordable housing needs.

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