House GOP Financial Services Members Call on Yellen to Testify About Billions in Undistributed Rental Assistance

Treasury Secretary Janet Yellen testifies before a Senate Appropriations Subcommittee hearing in Washington on June 23, 2021. Greg Nash/Pool via AP

Republicans on the House Financial Services Committee want Secretary of the Treasury Janet Yellen to testify before the panel to explain why billions in federal aid have failed to reach the majority of tenants and have created billions in backlog owed to landlords.

“Many of us also believe that Secretary Yellen has failed to take responsibility for the program’s failures and shortcomings, disregarding requests to have opportunities to have these questions addressed to her by this committee and by others, and by allowing her to bypass the statutory obligations to testify,” said Rep. Bill Huizenga (R-Mich.) during a hearing on Friday.

The Treasury Department did not immediately respond to a request to comment.

According to data released by the Treasury Department at the end of July, close to 90 percent of the federal rental money allocated to state and local governments has not been distributed, which translates into almost $40 billion not reaching the intended recipient.

Huizenga and his colleagues say that the legislation introduced by Chairwoman Maxine Waters (D-Calif.), while good in its intent, might negatively impact landlords and create more red tape in getting the rental assistance to renters.

“And, frankly, many of us believe that instead of fixing the program, the proposed changes would create even more bureaucracy, add new burdens, and will scare off more landlords, steer funds away from COVID impacted low-income households, and remove protections to combat fraud,” added Huizenga.

However, Waters said her legislation will help hasten the distribution of rental assistance.

“I’m very concerned about data showing that state and local governments have only used 11 percent of the $46.6 billion in emergency rental assistance funds that are available. There’s no question that the funds are not reaching landlords and renters quickly or widely enough,” said Waters at the hearing Friday.

Waters has put forth legislation in an effort to expedite payments getting to renters and landlords. Waters said in a Dear Colleague letter that her legislation—which will be put before the committee for a vote on Sept. 13—would require grantees “to accept the self-attestation of a tenant and to provide assistance directly to tenants in certain circumstances.”

Waters also said her bill would permit landlords to “directly apply for back rent after providing notice to their tenants that they intend to apply” and instruct the Treasury Department and “grantees to conduct additional outreach to prospective tenants and landlords.”

(L-R) Rep. Patrick T. McHenry gives an American flag that flew at half-mast during his memorial to Franklin Graham as the casket of American evangelist Billy Graham exits the East Steps out of the U.S. Capitol after Lying in Honor in the Capitol Rotunda, in Washington, D.C., on March 1, 2018. Tasos Katopodis-Pool/Getty Images

Both Democrat and Republican lawmakers have called on states, municipalities, and local agencies to speed up the distribution of the aid to prevent thousands from being evicted. The Finance Services Committee hearing Friday was an attempt by lawmakers to find out how they can streamline the distribution process going forward.

Ranking Member of the committee Rep. Patrick McHenry (R-N.C.) said he has filed a discharge petition so that his bill H.R. 3913, the Renter Protection Act, can get on the House floor for a vote because the bill would otherwise be blocked by Democrats.

“Due to the Biden Administration’s mismanagement and Congressional Democrats’ inaction, American families have been left twisting in the wind. Republicans have been offering a commonsense solution for months—the Renter Protection Act—to fix the ERA (Emergency Rental Assistance) programs, make mom-and-pop property owners whole, and end the threat of eviction,” said McHenry in a press statement.

McHenry’s bill would require the treasury to disburse all remaining ERA program funds within 30 days of the bill becoming law; require that all unused ERA money is used for back-rent by those impacted by the pandemic, and reinstate the Dec. 31, 2021 deadline for cities and states to distribute all ERA funds.

Gerald Winn, the CEO of Winn Companies, laid out four points that would help alleviate the financial burden landlords are facing because of undistributed rental money.

“It would be informed consent as opposed to signatures by the tenant to apply on behalf, it would be bulk applications that landlords are able to submit, and that are mandated to be approved by the ERAP administrators, rather than just encouraged, a combining of the two programs to cut out bureaucracy,” Winn told the committee at the hearing Friday.

Winn continued, “And I would say really the fourth one, would be to make sure that when a unit is vacated that, that unit is still eligible for rental assistance because that is where a lot of the outstanding delinquencies are.”