ProgramCOVID-19 Federal Assistance e311
TopicsHousing & Rental Assistance, Program Administration
Would the following done in an effort to support or obtain affordable and attainable housing be eligible uses under the ARP: (i) purchasing vacant land; (ii) or conveying vacant land to non-profit entities?
Pursuant to guidance issued by the U.S. Department of the Treasury (“Treasury”), the purchase of vacant land in support of affordable housing may be permitted if the proposed housing is directly related to reducing the negative economic impacts caused by the COVID-19 health crisis, particularly where it relates to the development of affordable housing. On the other hand, the conveyance of vacant land is not addressed by the Treasury guidance.
Treasury’s Interim Final Rule (the “Rule”) states that the economic impacts of COVID-19 have “likely been most acute in lower-income neighborhoods” with concentrated areas of housing insecurity. The eligible services in the Rule include “affordable housing development to increase supply of affordable and high-quality living units.”
Treasury’s Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Frequently Asked Question (“FAQ”) #2.11 addresses how the Rule helps certain populations and geographies disparately impacted by COVID-19:
In recognition of the disproportionate impacts of the COVID-19 virus on health and economic outcomes in low-income and Native American communities, the Interim Final Rule identifies a broader range of services and programs that are considered to be in response to the public health emergency when provided in these communities. Specifically, Treasury will presume that certain types of services are eligible uses when provided in a Qualified Census Tract (QCT), to families living in QCTs, or when these services are provided by Tribal governments.
Recipients may also provide these services to other populations, households, or geographic areas disproportionately impacted by the pandemic. In identifying these disproportionately-impacted communities, recipients should be able to support their determination for how the pandemic disproportionately impacted the populations, households, or geographic areas to be served.
Eligible services under this consideration include:
Building stronger neighborhoods and communities, including: supportive housing and other services for individuals experiencing homelessness, development of affordable housing, and housing vouchers and assistance relocating to neighborhoods with higher levels of economic opportunity.
Again, the guidance does not speak directly to conveyance of land to a non-profit, but rather the transfer of funds.
FAQ #1.8 clarifies how non-profit entities may receive ARP funding as subrecipients:
Under section 602(c)(3) of the Social Security Act, a State, territory, or Tribal government may transfer funds to a “private nonprofit organization . . ., a Tribal organization . . ., a public benefit corporation involved in the transportation of passengers or cargo, or a special-purpose unit of State or local government.” Similarly, section 603(c)(3) authorizes a local government to transfer funds to the same entities (other than Tribal organizations). The Interim Final Rule clarifies that the lists of transferees in sections 602(c)(3) and 603(c)(3) are not exclusive, and recipients may transfer funds to constituent units of government or private entities beyond those specified in the statute. A transferee receiving a transfer from a recipient under sections 602(c)(3) and 603(c)(3) will be considered to be a subrecipient and will be expected to comply with all subrecipient reporting requirements.
The ARPA does not authorize Treasury to provide CSFRF/CLFRF funds directly to non-profit or private organizations. Thus, non-profit or private organizations should seek funds from CSFRF/CLFRF recipient(s) in their jurisdiction (e.g., a State, local, territorial, or Tribal government).
Based on the above, a municipality may transfer funds to a non-profit under a subaward agreement for the general development of affordable or supportive housing.
However, the recipient must bear in mind that the guidance and particularly FAQ #2.11 indicates that unless the presumption of eligibility is met where certain services are rendered in a QCT, the services or programs must be in response to the public health emergency in conjunction with any other eligibility considerations.
Last Updated: June 29, 2021
 Treas. Reg. 31 CFR 35 at 39, available at: https://home.treasury.gov/system/files/136/FRF-Interim-Final-Rule.pdf.
 Coronavirus State and Local Fiscal Recovery Funds, Frequently Asked Questions (as of July 19, 2021) — FAQ #2.11, at 7, available at: https://home.treasury.gov/system/files/136/SLFRPFAQ.pdf.
 Id., at FAQ #1.8, at 3-4.
 Id., at FAQ #2.11, at 7.