[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
PROTECTING RENTERS DURING THE
PANDEMIC: REVIEWING REFORMS TO
EXPEDITE EMERGENCY RENTAL ASSISTANCE
=======================================================================
VIRTUAL HEARING
BEFORE THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 10, 2021
__________
Printed for the use of the Committee on Financial Services
Serial No. 117-45
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
__________
U.S. GOVERNMENT PUBLISHING OFFICE
45-862 PDF WASHINGTON : 2021
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HOUSE COMMITTEE ON FINANCIAL SERVICES
MAXINE WATERS, California, Chairwoman
CAROLYN B. MALONEY, New York PATRICK McHENRY, North Carolina,
NYDIA M. VELAZQUEZ, New York Ranking Member
BRAD SHERMAN, California FRANK D. LUCAS, Oklahoma
GREGORY W. MEEKS, New York BILL POSEY, Florida
DAVID SCOTT, Georgia BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri ANN WAGNER, Missouri
ED PERLMUTTER, Colorado ANDY BARR, Kentucky
JIM A. HIMES, Connecticut ROGER WILLIAMS, Texas
BILL FOSTER, Illinois FRENCH HILL, Arkansas
JOYCE BEATTY, Ohio TOM EMMER, Minnesota
JUAN VARGAS, California LEE M. ZELDIN, New York
JOSH GOTTHEIMER, New Jersey BARRY LOUDERMILK, Georgia
VICENTE GONZALEZ, Texas ALEXANDER X. MOONEY, West Virginia
AL LAWSON, Florida WARREN DAVIDSON, Ohio
MICHAEL SAN NICOLAS, Guam TED BUDD, North Carolina
CINDY AXNE, Iowa DAVID KUSTOFF, Tennessee
SEAN CASTEN, Illinois TREY HOLLINGSWORTH, Indiana
AYANNA PRESSLEY, Massachusetts ANTHONY GONZALEZ, Ohio
RITCHIE TORRES, New York JOHN ROSE, Tennessee
STEPHEN F. LYNCH, Massachusetts BRYAN STEIL, Wisconsin
ALMA ADAMS, North Carolina LANCE GOODEN, Texas
RASHIDA TLAIB, Michigan WILLIAM TIMMONS, South Carolina
MADELEINE DEAN, Pennsylvania VAN TAYLOR, Texas
ALEXANDRIA OCASIO-CORTEZ, New York PETE SESSIONS, Texas
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
NIKEMA WILLIAMS, Georgia
JAKE AUCHINCLOSS, Massachusetts
Charla Ouertatani, Staff Director
C O N T E N T S
----------
Page
Hearing held on:
September 10, 2021........................................... 1
Appendix:
September 10, 2021........................................... 67
WITNESSES
Friday, September 10, 2021
Morris, Kadeem, Supervising Attorney, Community Legal Services of
Philadelphia................................................... 5
Salazar, Margaret, Executive Director, Oregon Housing and
Community Services (OHCS); and Vice Chair, National Council of
State Housing Agencies (NCSHA)................................. 7
Schwartz, David, CEO, Chairman & Co-Founder, Waterton; and Chair,
National Multifamily Housing Council (NMHC).................... 9
Winn, Gilbert, Chief Executive Officer, WinnCompanies............ 12
Yentel, Diane, President and CEO, National Low Income Housing
Coalition (NLIHC).............................................. 11
APPENDIX
Prepared statements:
Morris, Kadeem............................................... 68
Salazar, Margaret............................................ 73
Schwartz, David.............................................. 83
Winn, Gilbert................................................ 99
Yentel, Diane................................................ 107
PROTECTING RENTERS DURING
THE PANDEMIC: REVIEWING
REFORMS TO EXPEDITE
EMERGENCY RENTAL ASSISTANCE
----------
Friday, September 10, 2021
U.S. House of Representatives,
Committee on Financial Services,
Washington, D.C.
The committee met, pursuant to notice, at 12:09 p.m., via
Webex, Hon. Maxine Waters [chairwoman of the committee]
presiding.
Members present: Representatives Waters, Sherman, Green,
Cleaver, Perlmutter, Foster, Gottheimer, San Nicolas, Axne,
Adams, Dean, Ocasio-Cortez, Garcia of Illinois, Garcia of
Texas, Williams of Georgia, Auchincloss; McHenry, Posey,
Huizenga, Wagner, Barr, Williams of Texas, Hill, Emmer, Zeldin,
Loudermilk, Davidson, Kustoff, Gonzalez of Ohio, Rose, Steil,
Timmons, Taylor, and Sessions.
Chairwoman Waters. The Financial Services Committee will
come to order. Without objection, the Chair is authorized to
declare a recess of the committee at any time.
As a reminder, I ask all Members to keep themselves muted
when they are not being recognized by the Chair. The staff has
been instructed not to mute Members, except when a Member is
not being recognized by the Chair, and there is inadvertent
background noise.
Members are also reminded that they may only participate in
one remote proceeding at a time. If you are participating
today, please keep your camera on, and if you choose to attend
a different remote proceeding, please turn your camera off.
Today's hearing is entitled, ``Protecting Renters During
the Pandemic: Reviewing Reforms to Expedite Emergency Rental
Assistance.''
I now recognize myself for 4 minutes to give an opening
statement.
From the very beginning of this pandemic, I have sounded
the alarm about the urgent need for congressional action to
avert a massive spike in our national eviction crisis. As Chair
of this committee, I understand the devastating impacts that
evictions have on families, and I also understand how much
landlords, particularly small, mom-and-pop landlords, are
struggling because of unpaid rent.
I also recognize that evictions increase the spread of
COVID, and have the potential to seriously set back our
national economic recovery. That is why I have worked around
the clock on this issue.
I am reminded, as I have worked on this issue, that we have
extended the moratorium between the Congress of the United
States and the CDC 6 times. Thankfully, due to the hard work of
this committee, in 2020 Congress passed $25 billion in
emergency rental assistance and provided an extension of the
Federal eviction moratorium.
Several months later, under the leadership of President
Biden, Democrats passed an additional $21.6 billion in
emergency rental assistance as part of the American Rescue Plan
Act.
But our work is not done. I am 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 is no question that the funds
are not reaching landlords and renters quickly or widely
enough.
In addition, the Supreme Court's action along partisan
lines to lift the CDC's eviction moratorium puts millions at
risk of eviction, even as the Delta variant causes a deadly
resurgence of the virus.
That is why I have introduced new legislation, the
Expediting Assistance to Renters and Landlords Act of 2021,
which is designed to make sure that individuals and families
are not put out of their homes while this virus continues to
harm communities across the country.
This bill would allow landlords to apply directly for back
rent they are owed, even if a renter is unresponsive, as long
as the landlord provides notice and meets other conditions,
including a requirement that tenants may not be evicted for at
least 120 days, and that the landlords would be paid for those
120 days following the first request for assistance.
The legislation would also require grantees receiving
emergency rental assistance funds to accept attestations from
tenants, and to provide funds directly to tenants when the
landlord is unresponsive or refuses to participate.
The legislation also gears up outreach. Working very
closely with the Treasury, we have come up with many ways to
modify these applications. So the legislation, again, also
gears up outreach to increase public awareness of the
availability of emergency rental assistance funds, providing
funding for mailings, radio, TV, and internet ads, and ensures
that grantees have the resources and help to get the funds out
the door.
These steps and others in the bill will cut down barriers
preventing the robust rental assistance funding that Congress
has provided from reaching renters.
Today, we will also discuss legislation that Ranking Member
McHenry has introduced regarding rental assistance.
While I have some serious concerns with the ranking
member's bill, I believe that we are aligned in our goal to
expedite assistance to those in need, so I want to work with
him, and I am hopeful that we can work together and that this
could be a bipartisan bill. I look forward to discussing both
bills with our panel of experts today.
I now recognize the ranking member of the committee, the
gentleman from North Carolina, Mr. McHenry, for 5 minutes.
Mr. McHenry. Thank you, Madam Chairwoman, for holding
today's hearing, and thank you for those encouraging words of
outreach now that we are 5 months past when committee
Republicans filed our bill, the Renter Protection Act. And I
want to thank you for attaching that bill, which is supported
by every Republican on the committee, to this hearing.
The bill makes common-sense reforms to Treasury's rental
assistance programs to get help to renters and landlords now.
It is a bill we should have considered months ago, before the
eviction moratorium expired, and before renters and landlords
had the rug pulled out from underneath them.
Committee Republicans have been raising the alarm since it
became clear that the Treasury Department was failing to get
renter relief out the door. To state the obvious, the Emergency
Rental Assistance Program isn't working.
Congress gave the Treasury Department more than $46 billion
to help renters and property owners survive the pandemic. Back
in May, I asked Treasury to provide basic data that would help
us understand where all that money is and why it hasn't reached
renters. They couldn't answer those questions. And they still
can't.
We had a hearing late in July with the HUD Secretary, who
was profoundly unprepared to answer basic questions about this
important program. We asked, ``Is rental assistance money being
used to help COVID-impacted families?'' and she told us, ``I
have no idea.'' Let me repeat that. The HUD Secretary said, ``I
have no idea.'' That is unacceptable.
The whole process has been unacceptable. It has been 2
months since the Federal eviction moratorium expired, and
several weeks since the Supreme Court struck down President
Biden's last-minute extension, and here we are, again, asking,
why isn't the program working and how can we fix it?
Is Secretary Yellen here? No. Did the Majority invite her?
No. And she is in charge of deploying these moneys. Committee
Republicans did invite her, and to no one's surprise, she
didn't agree to come. And, again, she didn't come to answer
these basic questions that we all have, on both sides of the
aisle.
Three days ago, Democrats finally put forward their
alternative. You may have not heard or read about it, so I will
summarize it for you: more red tape; more bureaucracy; and more
delays. Simply put, the Democrats' bill will not fix the Biden
Administration's abject failure.
Here is what we should be doing. First, we should
consolidate all of the rental assistance programs into one
easy-to-manage program for localities to administer.
Second, we need to reform the program so that money goes to
property owners to settle back debts, so that families can stay
in their homes.
Third, we need to make it easier for property owners to
participate on behalf of residents.
And finally, we have to require grantees to move faster,
for example, by accepting bulk applications.
It seems like Democrats in Washington forgot that the
purpose of the program is to pay back rent. This isn't
difficult. To get the program back on track, it simply requires
that our solutions be targeted, timely, and tied to COVID. But
the bill put forward by Democrats would only make things worse,
not better.
So, instead of actually solving problems today, there will
be more finger-pointing at the previous Administration by my
Democrat friends, and more proposals to empower liberal
activists by my Democrat friends, and zero plans to hold the
Biden Administration accountable for their failures, which is
very typical of my Democrat friends right now. This is a shame.
Since it appears our bill won't get a fair shake in this
committee this morning, I filed a discharge petition for the
Renter Protection Act. I would encourage every Member to sign
onto it.
And with that, I look forward to the panel, and I yield
back.
Chairwoman Waters. Thank you very much. Much of what the
ranking member is saying needs to be done, is in this bill.
The gentleman from Missouri, Mr. Cleaver, is recognized for
one minute.
Mr. Cleaver. Thank you. The legislation being discussed at
this hearing, the Expediting Assistance to Renters and
Landlords Act of 2021, proposes several changes to Emergency
Rental Assistance (ERA) 1 and ERA 2 which will ensure that the
Federal emergency rental assistance funding that we fought so
hard for on this committee is continuing to reach those who are
in need.
As the COVID-19 pandemic continues to surge, far too many
American families have been, and will be subject to the horrors
of an eviction. Many small landlords who have invested their
retirement incomes now have to worry about whether or not their
property will go into foreclosure.
Like many of you, I have been frustrated at the slow pace
at which State and local governments have been implementing the
Emergency Rental Assistance Program, and there is no time to
waste in making the reforms necessary to get funds out the door
as quickly and efficiently as possible.
I look forward to hearing from today's witnesses, and I
want to thank you, Madam Chairwoman, for your leadership, and
for convening this hearing. Thank you very much. I yield back.
Chairwoman Waters. You are so welcome.
I now recognize the gentleman from Arkansas, Mr. Hill, for
one minute.
Mr. Hill. Thank you, Madam Chairwoman.
Where is Secretary Yellen? It has been 5 months since the
Treasury Secretary testified before our committee. Yet, the
Biden Administration seems to feel no sense of urgency to help
renters and mom-and-pop landlords who need it most, no sense of
responsibility to answer to Congress, and no sense of shame
over a complete mishandling of the Emergency Rental Assistance
Program.
Instead, we have the distinguished chairman from South
Carolina, Mr. Clyburn, browbeating governors and trying to
shift blame to them from the Treasury Secretary. It is a
mistake, and we are hurting over a million families who are
estimated to be evicted in the next couple of months.
Republicans have a better solution, the Renter Protection
Act, which would simplify the needlessly-complicated Rental
Assistance Program, get the money out faster, and actually help
the people that Congress intended to help: those who lost their
jobs and got behind on their rent due to COVID-19.
If my friends across the aisle are serious about a
solution, I urge my friends to include the Renter Protection
Act in Monday's committee action.
Thank you, Madam Chairwoman, and I yield back.
Chairwoman Waters. Thank you very much.
I want to welcome today's distinguished witnesses to the
committee. First, we have Mr. Kadeem Morris, a supervising
attorney with Community Legal Services of Philadelphia.
Second, we have Ms. Margaret Salazar, the executive
director of the Oregon Housing and Community Services
Department.
Third, we have Mr. David Schwartz, the CEO, chairman, and
co-founder of Waterton, and the chair of the National
Multifamily Housing Council.
Fourth, we have Ms. Diane Yentel, the president and CEO of
the National Low Income Housing Coalition.
Now, I will recognize the gentleman from Massachusetts, Mr.
Lynch, to introduce our last witness.
Mr. Lynch?
Is Mr. Lynch on the platform?
Okay. Well, while we are waiting for Mr. Lynch, who wanted
very much to introduce this witness, I will move on, and I will
introduce Mr. Gilbert Winn, the CEO of WinnCompanies.
Each of you will have 5 minutes to summarize your
testimony. You should be able to see a timer on your screen
that will indicate how much time you have left, and a chime
will go off at the end of your time. I would ask you to be
mindful of the timer, and quickly wrap up your testimony if you
hear the chime. And without objection, your written statements
will be made a part of the record.
Mr. Morris, you are now recognized for 5 minutes to present
your oral testimony.
STATEMENT OF KADEEM MORRIS, SUPERVISING ATTORNEY, COMMUNITY
LEGAL SERVICES OF PHILADELPHIA
Mr. Morris. Good afternoon. My name is Kadeem Morris, and I
am a supervising attorney in the housing unit of Community
Legal Services of Philadelphia. Community Legal Services helps
more than 10,000 people per year with legal problems that
threaten their home, health, and income, and more than 2,300
households per year who are facing evictions due to the COVID-
19 pandemic.
I would like to thank Chairwoman Maxine Waters and the
members of the House Committee on Financial Services for
inviting me to speak today.
The COVID-19 pandemic has exacerbated the pre-existing
housing crisis in the United States, causing more people to
join the ranks of the housing insecure. The ability to access
safe and affordable housing is not guaranteed in the United
States. However, the collateral consequences when a family is
evicted are clear and immediate.
The faces of the evicted are the faces of the vulnerable
members of society. Studies have found that single mothers,
most commonly Black and Brown, make up the majority of those
affected by evictions and forced moves, the grim reality in
Philadelphia, where 71 percent of the annual eviction cases are
filed against communities of color.
The pandemic has exacerbated difficulties for these
communities, mainly Black, Brown, seniors, and people living
with disabilities. These communities are most likely to have
lost income during the pandemic, putting them at greater risk
of an eviction filing and subsequent homelessness and housing
instability beyond the pandemic.
The health consequences combined with the financial
hardship of having your job disappear has shattered the already
shaky foundation upon which vulnerable families stood. People
who were struggling to make ends meet before the pandemic were
forced to make the bitter choice of risking their health and
the health of the families that they live with by working
during the pandemic and potentially contracting the virus, or
facing the long-term consequences of unemployment and increased
household expenses.
In Philadelphia, the effects of delivery of rental
assistance to vulnerable households has prevented displacement
and, as a result, prevented the community spread of COVID-19.
The Philadelphia Eviction Diversion Program partners with
the City's Emergency Rental Assistance Program to ensure that
people are able to access assistance for the benefit of both
landlords and tenants. Through targeted outreach and supportive
services, Philadelphia was able to build a rental assistance
program that could preserve the landlord/tenant ecosystem.
The demographic data provided by the City of Philadelphia
demonstrates that rental assistance dollars are reaching
vulnerable communities: 65 percent of the families assisted
were Black or African American; 60 percent of the applicants
were female; and over 70 percent of the households served had a
household income below 30 percent of the area median income.
Landlords who were struggling with their mortgages were
paid, and tenants who were behind on their rent were not
displaced.
The Eviction Diversion Program provides a forum by which
landlords and tenants can meet and discuss issues without the
pressure of a court filing. The program also uses highly-
skilled, impartial mediators to create a forum where landlords
and tenants can resolve issues, and tenants are automatically
assigned a housing counselor who works with them throughout the
process, assisting them with the rental assistance application,
and coordinating any other supportive services.
For rental assistance programs to operate effectively,
administrators cannot create additional hoops for tenants and
landlords to have to jump through. If the stated goal of the
program is to prevent evictions of vulnerable households, the
municipalities and other administrators should limit the amount
of paperwork and forms of verification that tenants and
landlords need to submit.
Under the American Rescue Plan, households who have not
experienced a change in income, but have experienced an
increase of expenses, are eligible to apply. This opens the
door for a significant portion of the population, including the
elderly and disabled, to participate in the program.
Increased expenses during the pandemic are reflected in the
cost of food, cost of transportation, and often, the cost of
burying family members who have suffered from COVID. These
vulnerable households are bearing the increased costs without
an increase in income, and most are unable to afford market-
rate rent based on their income.
Sadly, H.R. 3913, the Renter Protection Act, proposes to
limit the usage of the unspent funds under the American Rescue
Plan. If getting the money out to landlords and tenants is a
top priority, the Federal Government should not take any steps
to limit the flexibility that is currently given to program
administrators, and set up both programs and supportive
services that gets the money paid out.
The proposed changes outlined in the Emergency Rental
Assistance Program in H.R. 5196, the Expediting Assistance to
Renters and Landlords Act, are vital to the survival of the
landlord/tenant ecosystem.
Providing flexibility for landlords to apply without
tenants who are unresponsive, requiring grantees to inform
those tenants that their arrearage has been paid, and that they
are covered by the 120-day eviction prohibition places
landlords and tenants on even footing by allowing tenants to
self-advocate with the information.
The satisfaction of outstanding money judgments and the
sealing of cases are vital, as evictions have long-term
consequences.
In closing, I would like to encourage the Federal
Government to take steps to adopt the proposed changes outlined
in H.R. 5196, and make it easier and create additional
flexibility for agencies to administer their rental assistance
programs. Thank you for your time.
[The prepared statement of Mr. Morris can be found on page
68 of the appendix.]
Chairwoman Waters. Next, we will go to Ms. Salazar. You are
now recognized for 5 minutes to present your oral testimony.
STATEMENT OF MARGARET SALAZAR, EXECUTIVE DIRECTOR, OREGON
HOUSING AND COMMUNITY SERVICES (OHCS); AND VICE CHAIR, NATIONAL
COUNCIL OF STATE HOUSING AGENCIES (NCSHA)
Ms. Salazar. Thank you, Chairwoman Waters, Ranking Member
McHenry, and members of the committee. Thank you for the
opportunity to testify today. For the record, my name is
Margaret Salazar, and I am the executive director of the Oregon
Housing and Community Services Department, and I also serve as
the vice chair of the National Council of State Housing
Agencies (NCSHA).
My agency, like 27 other State housing finance agencies
(HFAs), serves as a Statewide administrator of the Emergency
Rental Assistance Program. Every month, State ERA
administrators have increased the rate at which they have
distributed assistance. States delivered more than $1.6 billion
in the month of August, the highest level of any month to date.
State programs, on average, have funded more than one-third
of the applications that they have received, with many funding
50 percent or more.
The ERA Program has provided a lifeline to more than 1
million vulnerable renters, and made thousands of landlords
whole. Since the beginning of this calendar year, my agency,
OHCS, has obligated more than $204 million in rental
assistance.
This is the equivalent of our entire ERA 1 allocation, but
it represents a combination of both State and Federal funds. Of
this total, nearly $35 million is Federal ERA assistance.
In the last month, our agency has taken bold action to
speed up application processing. We have hired more than 60
temporary staff, and brought on an outside vendor to boost
capacity for our local partners on the ground. We have created
self-attestation forms, disseminated informational videos, and
translated materials into multiple languages. We have partnered
with community-based organizations to increase outreach and
support, particularly in communities of color.
But there are limits to what ERA can achieve as currently
authorized. We agree with Chairwoman Waters that legislation is
needed to further reform this program, to greatly strengthen
its effectiveness.
NCSHA supports Chairwoman Waters' Expediting Assistance to
Renters and Landlords Act. We also encourage you to make
several additional statutory improvements to further strengthen
the program, which are in my written statement.
Any ERA program reforms must reflect the fundamental
balances that agencies at all levels of government must strike.
The first is balancing renter protection with landlord
participation. NCSHA has repeatedly acknowledged the
extraordinary efforts of landlords to keep tenants safely
housed during this pandemic. While some landlords have declined
to participate in rental assistance programs, others have been
unable to do so, because a tenant is not responsive or has
vacated the unit, leaving the landlord with unpaid arrears.
We support the provisions in Chairwoman Waters' proposal,
to allow landlords to apply for ERA on behalf of tenants even
if the landlord is unable to gain the renters' consent, or
because the tenant is not responsive or has vacated the
property.
The second important balance is between equity, efficiency,
and accountability. ERA administrators have been accused of
unnecessarily prioritizing documentation requirements to
prevent fraud over the urgent need to make rental assistance
available. But even with the new flexibilities in U.S. Treasury
rules as of 2 weeks ago, the ERA statute and Treasury
requirements still impose significant accountability on ERA
administrators.
Our experience in the field tells us that verbal assurances
from U.S. Treasury will not guide Federal agency oversight,
either through Federal or State or local audits.
State and local officials are on the line for meeting this
unprecedented emergency, and we are acting in good faith while
we work to balance urgency and accountability.
We support the provisions in Chairwoman Waters' proposal
that would provide a safe harbor to grantees so that they would
not be subject to liability, to repay assistance provided in
good faith, relying on the attestation of the tenant.
The third balance is between current and coming demand. My
team in Oregon and my colleagues around the country are
committed to helping as many eligible renters, as quickly as
possible. We understand the urgency. The unevenness of the
economic recovery and the clear demand for the program suggest
that ERA will become even more needed in the months ahead.
In addition, there are indications that utility arrearages
remain substantial. Estimates of unpaid utilities range from
$10 billion to $30 billion.
We also support the provision in Chairwoman Waters'
proposal that would extend the time period during which an
individual household may receive ERA assistance to up to 24
months.
The Administration has accurately said that the launch of
ERA required building a new national infrastructure for rental
assistance and eviction prevention that did not previously
exist.
Additional improvements to the ERA statute can help build
out that infrastructure for an even greater impact.
Thank you, and I will be glad to answer any questions.
[The prepared statement of Ms. Salazar can be found on page
73 of the appendix.
Chairwoman Waters. Thank you very much, Ms. Salazar.
Mr. Schwartz, you are now recognized for 5 minutes to
present your oral testimony.
STATEMENT OF DAVID SCHWARTZ, CEO, CHAIRMAN & CO-FOUNDER,
WATERTON; AND CHAIR, NATIONAL MULTIFAMILY HOUSING COUNCIL
(NMHC)
Mr. Schwartz. Chairwoman Waters, Ranking Member McHenry,
and members of the committee, it is my privilege to appear
before you today to speak on behalf of the multifamily rental
housing industry, the National Multifamily Housing Council, the
National Apartment Association, and our nation's 40 million
apartment households on the urgent reforms needed to the
Emergency Rental Assistance Program, or ERAP.
My name is David Schwartz, and I am CEO and chairman of
Waterton, headquartered in Chicago, Illinois, with regional
offices throughout the United States. Waterton is a real estate
investment and property management company with a focus on U.S.
multifamily properties.
I am also the current chair of the National Multihousing
Council, or NMHC.
Our country has faced unprecedented challenges for the past
18 months, creating significant hardships for America's renters
and jeopardizing the stability of the housing sector. We
commend the work of this committee in creating the Emergency
Rental Assistance Program, and appreciate your continued work
to ensure the ability of ERAP to serve those in need.
Throughout this crisis, rental housing owners and operators
have continuously worked to address the needs of our residents,
employees, and communities, deploying various means to
accommodate the housing challenges presented by COVID-19,
despite their own financial uncertainty and economic losses.
The apartment industry knows better than anyone the
importance of providing a safe, secure place to call home, and
it is a responsibility we do not take lightly.
But the housing industry cannot shoulder COVID-relief
efforts alone. Moreover, housing providers were severely
impacted by eviction moratoriums which just merely shifted the
economic hardships of the pandemic to housing providers.
One-size-fits-all Federal moratoriums were, and are,
unsustainable, and fail to address the underlying financial
distress of residents.
Instead, ERAP is a critical stabilizer for residents and
housing providers alike, and the most effective mitigation tool
at our disposal. This is why it is urgent to focus on
implementing workable solutions for renters and housing
providers facing barriers and delays in the distribution of
vital rental assistance funds.
The apartment industry is playing a key role in helping
execute the Rental Assistance Program and to secure benefits
for their residents. Given the widely varying nature of rental
assistance programs, and the multijurisdictional footprint of
many apartment firms, this necessitates a significant
commitment of resources and staff to vet dozens, or even
hundreds of programs, with differing eligibility, application,
and distribution policies.
We applaud this committee's focus on reforming the program,
and appreciate that H.R. 5196, the Expediting Assistance to
Renters and Landlords Act of 2021, and H.R. 3913, the Renter
Protection Act of 2021, address many of our concerns.
My written testimony provides detailed recommendations for
unlocking the flow of ERAP funds and addressing barriers to the
delivery of relief to those in need.
In particular, we support efforts to help jurisdictions
ramp up delivery of rental assistance benefits, including
streamlining onerous application documentation requirements,
ensuring eligibility aligns with those residents in need of
support, leveraging housing provider capabilities to assist
with application processes, and embracing practices and
technologies with proven operational success.
Importantly, we caution against the imposition of new
program requirements unrelated to the accelerated distribution
of funds that further or create new barriers to participation
in ERAP programs.
Instead, we urge a singular focus on those efforts that can
lessen the burden of program administrators and applicants
while improving the outflow of benefits.
There is also a pressing need to address the ability to
secure ERAP funds when residents are unwilling or unable to
cooperate with the application process. Congress must enable
housing providers to apply for rental assistance on behalf of
residents who are unresponsive, have vacated units, or are
otherwise unavailable.
Without action to address ERAP's current limitations and
increased participation in the program, renters are faced with
further uncertainty and a mounting debt cliff, while housing
providers are forced to address rental losses through
foreclosure, bankruptcy, removal of the property from the
rental stack, and other measures with long-term market impacts.
We are dedicated to working in partnership with
policymakers at all levels on addressing the challenges of
COVID-19, while advancing proven solutions for long-term
housing affordability.
This committee's attention to addressing the root causes of
housing instability is vital, and we are committed to efforts
that would bolster housing assistance to renters, increase
housing provider participation in Federal housing programs,
break down barriers to provision of rental housing, and
increase housing of choice for renters.
[The prepared statement of Mr. Schwartz can be found on
page 83 of the appendix.]
Chairwoman Waters. Thank you, Mr. Schwartz.
Ms. Yentel, you are now recognized for 5 minutes to present
your oral testimony.
STATEMENT OF DIANE YENTEL, PRESIDENT AND CEO, NATIONAL LOW
INCOME HOUSING COALITION (NLIHC)
Ms. Yentel. Thank you. Chairwoman Waters, Ranking Member
McHenry, and members of the committee, thank you for the
opportunity to testify today.
When the Supreme Court lifted the Federal eviction
moratorium, it eliminated the last Federal protection keeping
6.5 million families who were behind on their rent stably
housed. The unprecedented resources that Congress provided for
emergency rental assistance has yet to reach many of them. Now,
they are at risk of losing their homes as the Delta variant
surges.
The urgency of getting assistance to tenants and landlords
cannot be overstated, but many communities are spending their
ERA allocations much too slowly. Just $7.5 billion of the first
$25 billion of ERA has been spent or obligated. While ERA
helped nearly 1 million households through July, at least
another 1.2 million submitted applications but have yet to
receive aid.
Many others struggle to complete applications due to
complexity, inaccessibility, or documentation requirements.
Some programs are successfully scaling up. New Jersey,
Virginia, Texas, Massachusetts, and Washington, D.C., have all
spent over half of their ERA 1.
Six States have spent more than 30 percent, and several
States have made major recent improvements. Dozens of cities
have spent over 70 percent of their ERA 1. These programs make
clear that success is possible.
But they are outliers. Seventeen States and many localities
have spent less than 10 percent of their first ERA allocation.
Some were slowed down by State legislatures or city councils. A
few received more ERA than needed due to Congress' faulty
formula allocation. Many struggle with landlords' refusal to
participate in programs.
But the primary issue with slow ERA spending is that many
programs are not following clear Treasury and White House
guidance and are not adopting evidence-based best practices.
Slow-spending ERA programs tend to do little outreach. They
don't hire enough staff to process applications. They have long
and complicated applications with overly burdensome
documentation requirements.
For example, fewer than 17 percent of programs explicitly
allow renters to use self-attestation to document income or
housing instability, this, despite Treasury guidance that has,
since March, allowed self-attestation for all eligibility
criteria.
Only 28 percent of programs explicitly allow direct-to-
tenant assistance, despite it being permissible and critical to
keeping renters housed when landlords refuse to participate.
It is unfortunately clear by now that if flexibilities and
best practices remain optional, many programs will not adopt
them. So, the Biden Administration should continue to use all
available tools, including their ability to recapture and
reallocate ERA funds, to require best practices in all
programs.
And Congress should consider statutory changes to turn
flexibilities and best practices into requirements.
Legislation introduced by Chairwoman Waters builds off of
existing Treasury guidance, and addresses the root causes of
slow ERA spending.
NLIHC has deep reservations about allowing landlords to
receive ERA without tenant involvement. The legislation
provides important protections in such cases to lessen fraud or
tenant harassment. These protections must remain and be
expanded as the bill moves forward.
Congressman McHenry's legislation would halt most program
spending by first requiring Treasury to rescind and redo
guidance, then requiring programs to make changes counter to
best practices, and by prohibiting use of ERA funds for needed
staffing or technology. The bill would ensure that the needs of
many landlords and renters go unmet.
There are proven and simple ways for ERA programs to
expedite assistance: hire staff; do robust outreach; simplify
applications; use self-attestations; and provide direct-to-
tenant assistance.
The best programs are already doing this. Those that aren't
should course-correct as Texas, California, New York, and
Connecticut have done, and as South Carolina and Arkansas
announced recently that they will do.
For those that don't or won't, both the Biden
Administration and Congress should require these improvements.
Thank you again for the opportunity to testify. I look
forward to your questions.
[The prepared statement of Ms. Yentel can be found on page
107 of the appendix.]
Chairwoman Waters. Thank you very much, Ms. Yentel.
And Mr. Winn, you are now recognized for 5 minutes to
present your oral testimony.
STATEMENT OF GILBERT WINN, CHIEF EXECUTIVE OFFICER,
WINNCOMPANIES
Mr. Winn. Good afternoon. Chairwoman Waters, Ranking Member
McHenry, and members of the committee, it is my privilege to
appear before you today to speak on behalf of our organization,
WinnCompanies, and the more than 300,000 residents who call our
apartment communities home. Thank you for this invitation.
My name is Gilbert Winn, and I am the CEO of Winn, a
developer, owner, and manager of multifamily housing founded in
Boston 50 years ago. WinnCompanies is the largest operator of
affordable housing, and the sixth largest multifamily operator
of housing in the country.
We manage over 600 rental communities, on behalf of a
diverse range of clients--private owners of all types,
nonprofit groups, community development corporations, tenant-
owned affordable co-ops, and even public housing authorities.
We manage mixed-income communities with local housing
programs or Federal programs like Section 8, or low-income
housing tax credits. We manage naturally occurring affordable
housing as well. We also manage more than 10,000 unrestricted
market ratings.
WinnCompanies works in 23 States, in diverse geographies,
from the Northeast, to the South, to the West. Our company is
also one of the nation's largest providers of housing-based
community services.
Why is this background important? Because it illustrates
that we bring an informed firsthand perspective, covering
nearly all constituencies of what is and what isn't working on
the ground when it comes to emergency rental assistance, and
the goals generally of housing stability and eviction
diversion.
As both an owner and an operator, we play a direct role on
the ground in fulfilling the dual intent of the ERAP program,
which is both to assist renters and to assist landlords.
Today, I will first talk about our housing stability goals
and the fundamental importance of rent collection in that
endeavor. I will then detail the specific successes and
challenges we faced in accessing the ERAP program.
And I will conclude with our proposed revisions that we
think should be urgently implemented to make it more efficient.
While we are here to discuss the ERAP program, we all
understand it is but one component of housing stability. In
early 2020, WinnCompanies launched a holistic national housing
stability program. The goal was to reduce non-payment rent
evictions by 50 percent across our portfolio through a
combination of upstream, consistent interventions.
The result is that WinnCompanies has had zero evictions for
nonpayment of rent since the start of the pandemic. These
results, and our program, have been recognized by my fellow
witnesses here at NMHC, and the National Low Income Housing
Coalition.
As we are all gathered here today, it should be no surprise
that emergency rental assistance is the single-most important
component of that housing stability program in avoiding
evictions. We know this from experience, and we applaud this
committee for recognizing the need for reforms.
We understand that this $46 billion program was designed to
assist both tenants and owners. This is not a choice between
renters and profits. Rent is fundamental to the ability of our
company and our clients, particularly our nonprofit owners, to
operate and maintain existing apartment communities and to
build affordable housing in the future. It is a virtuous
ecosystem.
In addition to mortgage payments and real estate taxes, as
rent goes uncollected, variable operating costs that affect
everybody's quality of life must be decreased, such as
preventative maintenance, landscaping, security, trash pickup,
and resident services.
Staff hours at each property are cut if this happens, which
means the paychecks of frontline workers are decreased.
All in all, I am very proud of how the multifamily industry
has stepped up during this pandemic. The vast majority of
owners and operators are on the front lines, keeping homes safe
and occupied.
Now, in terms of ERAP, we have extended tremendous time,
effort, and resources in order to make the rollout of the
program as successful as possible.
We have participated in 20 working groups across the
country to design and administer the funds. We have
participated in forums held by the apartment industry and the
legal services community.
At the State level, we have worked with leadership to
address program glitches in portals and application processes.
At the local level, we help convene our peers to share best
practices.
We have held 54 separate, 2-hour trainings to walk our team
members through every step of their areas' individual ERA
processes.
In terms of tenant communication and partnership, we have
established contacts with administrative teams, created
marketing materials, and begun a near-constant tenant outreach
campaign in every apartment community, including engaging with
local churches, schools, youth organizations--
Chairwoman Waters. Mr. Winn, your time has expired. Thank
you very much for your testimony.
[The prepared statement of Mr. Winn can be found on page 99
of the appendix.]
Chairwoman Waters. I now recognize myself for 5 minutes for
questions. Mr. Schwartz, Ms. Yentel, I am troubled by the
number of landlords and renters who remain unaware of the
availability of rental assistance. According to the Urban
Institute, more than half of renters and 40 percent of
landlords are still unaware of Federal assistance.
I would like to share with you a little story about
something that I was involved in just a week or so ago. I know
a landlord with 5,000 units. I went to him to ask him what was
going on with his rental units. He told me that only 40 percent
of his renters had applied. I asked him why, and he said he did
not know.
And then I asked him, Have you ever thought about using
your community rooms with a person, or persons, and a computer
or so, to invite your renters to come to get assistance in
applying for rental assistance? He said, no, they had not done
that.
I went a step further. I called Legal Aid, I put them
together, and I taught him how to do the notices to pin to the
doors to let people know that assistance was available now in
the community area of one of the largest of his complexes, for
them to come.
On the first day, 90 renters showed up. Legal Aid showed up
with organizers and one or two lawyers, and they assisted
everybody who came that day in applying for rental assistance.
Now, you talk a lot about what you have done, Mr. Winn.
Have you seen anything like the operation that I just described
to you?
Mr. Winn. I'm sorry, Chairwoman Waters. Can you repeat
that?
Chairwoman Waters. Okay. Would anyone else like to respond
to that? Ms. Yentel?
Ms. Yentel. Yes, Chairwoman Waters, thank you. I have seen
some communities doing that kind of robust and equitable
outreach that you mentioned. That is exactly the kind of
outreach that is needed in local communities.
But there are many communities where that is not happening,
and as you say, we are seeing a significant number of both
landlords and tenants not being aware that emergency rental
assistance is available in their communities, or not knowing
how to access it.
This could be a result of language barriers. It could be
challenges with various access to technology, or it could be
simply that the education, the outreach, is not happening.
So, we urge program administrators to work with community-
based organizations who have trusted relationships in some of
the more marginalized communities where some of the greatest--
Chairwoman Waters. Okay, Ms. Yentel. Thank you very much. I
want to move on to--Mr. Schwartz, have you seen the kind of
operation that I just described to you, where the landlords use
their community rooms, or their space, to invite in the renters
with notices that they put on their door, and then they get the
assistance?
I added to it Legal Aid, because I brought Legal Aid in to
do it, but I think the landlords ought to be thinking about
doing it. What do you think?
Mr. Winn. Yes. With our own experience, and I know our
peers, other operators in our industry are opening up business
centers. The people in most need, the lowest income, may not
have access to computers or WiFi.
The application process is very cumbersome. In your State
of California, there are 18 pages of manual input, and it is
very complex. A lot of our residents only speak Spanish, and a
lot of the forms are only in English, so we have to bring
bilingual employees on our team to help them translate it.
A lot of the forms or the websites require downloading
paperwork, like proof of loss of job, or paycheck stubs. A lot
of the residents don't have scanners, so we have to help them
scan it into the system--look, we are all motivated as
landlords to assist our residents because we benefit from the
ERAP as much as they do. But the system is so cumbersome that
it involves a lot of manhours, and our industry is doing a
great job shouldering that--
Chairwoman Waters. Thank you very much, Mr. Schwartz. Do
you think the self-attestations will help? And this is
something we have worked on very closely with the Treasury. Do
you think that will help?
Mr. Schwartz. Absolutely. We are big proponents of it, with
respect to proof of tenancy, where they don't have to download
a copy of a lease--that is hard for a lot of our residents--
housing instability, self-attestation income, which means you
would have to download a paycheck stub. All of these are
barriers, and slow the system down.
Chairwoman Waters. Thank you. Thank you very much, Mr.
Schwartz. I'm sorry, my time is up.
And now, I will recognize the gentleman from North
Carolina, Mr. McHenry, the ranking member of the committee, for
5 minutes.
Mr. McHenry. Thank you, Madam Chairwoman. Last December,
Congress enacted the rental emergency assistance program in a
bipartisan way. And then in March, the Democrats did their
partisan bill, and had a new rental assistance program.
We have two separate rental assistance programs at this
point, and Treasury has a set of rules that are different on
implementing these programs.
So my question to you, Mr. Winn, is, given how disastrous
the rollout has been and the slow spending rates of getting
money out the door to help renters, do you think it is better
to combine these programs, number one; and number two, do you
think the focus on getting people's back rent paid should be
the primary view or the primary goal of the program?
Mr. Winn. Yes, I agree on both. I think the consolidation
of the programs will remove a lot of busy work and a lot of
uncertainty for both the landlords and the residents.
Also, the point of back rent is critical. A lot of
landlords don't wish to participate in the program if they are
only getting paid for the current delinquency. If somebody
moved out and they can't get paid for that past delinquency,
they are not going to be utilizing the program.
And that is, in fact, what has been happening. There are
many residents, who, when it comes time, are leaving with
unpaid balances and are not able to complete applications.
Mr. McHenry. Ms. Yentel, under this bill, H.R. 5196, I
would ask how imposing both new regulatory and statutory
conditions on landlords actually speeds up assistance to
renters?
Ms. Yentel. There are many ways that Chairwoman Waters'
legislation would speed up assistance--by requiring self-
attestation, by requiring direct-to-tenant assistance, by
getting at the root causes of slow ERA spending.
Unfortunately--
Mr. McHenry. So, how is that different? Direct-to-renter
assistance, how is that different now than under this new bill?
Ms. Yentel. It is currently optional, and only 28 percent
of programs utilize it. So when landlords refuse to participate
in a majority of programs--
Mr. McHenry. Okay. So, under this bill, Ms. Yentel, under
5196, how do you encourage landlords to participate when you
are putting in place new hoops to get money that they are
legally owed? How does that actually help?
Ms. Yentel. The only place where new hoops, as you call it,
are put in place--I would call them essential protections for
tenants--are where we are changing the program to allow for
direct-to-landlord assistance without any tenant involvement at
all. These protections are essential to--
Mr. McHenry. Okay. But that is one change.
Ms. Yentel. --limit tenant harassment.
Mr. McHenry. So, how about another change here? The bill
requires grantees to provide information to renters on how to
sue a landlord if a landlord follows the rules and receives the
assistance on their behalf. How does that actually encourage
landlords to participate?
Ms. Yentel. Well, it doesn't at all. What the legislation
would do, again, only in cases where we are changing the
programs to allow landlords to receive assistance without any
tenant involvement at all, it would require assurances that the
landlord is using those resources to pay the arrears that are
owed, and that the tenant is no longer responsible for those
arrears, which is why assurances--
Mr. McHenry. So what you are saying is that providing
information on complaints against landlords helps expedite the
distribution of assistance to households and families? Is that
what you are saying?
Ms. Yentel. What I am saying is that in cases where we
change a program and allow for a landlord to receive assistance
without the essential protection of tenant involvement in that
application, that there be protections for those tenants and
that there be protections against fraud.
Mr. McHenry. And in the real world, landlords would think
this is a great new program to participate in, to encourage the
people renting from them to sue them.
Ms. Yentel, I know you have a significant involvement with
my Democrat colleagues on housing. Were you or any of your
staff involved in the technical drafting of H.R. 5196?
Ms. Yentel. In the technical drafting of it? No. That is
certainly not our job. We have advised Chairwoman Waters--
Mr. McHenry. Advised, sure.
Ms. Yentel. --and her staff about recommendations--
Mr. McHenry. Okay. And as president and CEO of your
organization, I am curious if your organization stands to
benefit financially if this bill is enacted?
Ms. Yentel. No.
Mr. McHenry. So, your organization would not receive any
dollars under Section 6 of this bill?
Ms. Yentel. I can't speak to what Section 6 is off the top
of my head, but we receive zero Federal funding. We have no
Federal contracts. We don't contract with States or
localities--
Mr. McHenry. It is not a contract. And under this bill, it
would change to nonprofit entities that primarily provide
housing services would be eligible for these moneys. And so--
Ms. Yentel. We would be eligible, and we recommended that--
Mr. McHenry. --it raises the question. If you have
certified--if you have testified that you will not receive a
dime under this bill, we will make sure that we note that in
the record.
With that, Madam Chairwoman, I yield back.
Chairwoman Waters. Thank you very much. Let us remember,
the centerpiece of this program is such that it allows
landlords for the first time to be able to apply for the rental
assistance, and they have 10 days in which to notify the
tenant. And they can talk in that time, and maybe during that
time, the renter will say, ``Well, I will do it,'' but this
is--
Mr. McHenry. Madam Chairwoman, is this your time or my
time? Is this your time or my time to debate?
Chairwoman Waters. The Chair now recognizes the gentlewoman
from New York, Mrs. Maloney, who is also the Chair of the House
Committee on Oversight and Reform, for 5 minutes.
Mrs. Maloney. Thank you. Thank you all for your testimony
today, and thank you, Chairwoman Waters, for holding this
timely and very important hearing.
As we have discussed, Congress provided nearly $50 billion
in December, and in the American Rescue Plan, to help residents
stay safely housed, and to be able to afford their rent.
This was necessary relief, 100-percent essential, not just
for the health and safety of these residents during a pandemic,
but because a mass eviction crisis would have inflicted
needless damage to our economy and to our families.
Last week, New York Governor Hochul signed into law
additional protections for New York residents, and included new
resources for landlords and tenants to access rental
assistance. New York law also extended the State eviction
moratorium until January 15th.
It is no secret that the rollout of the rental assistance
programs hasn't gone as smoothly as Congress would have wanted,
which is why I am so glad we have a great panel, to hear about
your experiences and ways we can further improve and streamline
the program to better serve renters and landlords alike.
One of the issues I have been hearing about from my
constituents is the dual nature of the application. In effect,
you need both the landlord and the tenant to complete the
application to receive assistance.
Specifically, I have heard from constituents that many have
tried seeking assistance, but that their landlords were not
willing to apply. And I know the reverse has also been true.
So I would like to ask Mr. Morris, we will start with you,
you are on the front lines helping tenants with this program.
Is this an issue you are seeing in Philadelphia with the
tenants you are assisting?
Mr. Morris. Thank you for that question. It has presented
as an issue. There are two portions of the application: the
landlord application; and the tenant application. If the
landlord applies on behalf of a tenant, it generates an
affidavit that the tenant has to sign.
I do believe that creating the additional flexibility where
the landlord would not need to go to the tenant to get the
affidavit signed and then submit it will allow that landlord to
get a direct payment themselves once they have made the
necessary efforts to inform their tenants that the program
exists and to get them to apply for funding. But it has been an
issue.
Mrs. Maloney. Thank you.
Ms. Yentel, can you add, or can you speak to how this issue
presents a problem, if it does, for tenants seeking assistance,
and how the bill introduced by Chairwoman Waters would help
address this problem?
Ms. Yentel. Thank you. Requiring a program to have both
landlord and tenant involvement when getting emergency rental
assistance provides important safeguards against fraud and
against tenant harassment, really important safeguards for the
tenant.
We have heard of cases where tenants are not able to
complete their applications, and certainly, there have been
cases where landlords have been refusing to accept emergency
rental assistance when the application is approved and the
money is presented to them.
So, the solutions on incomplete applications by tenants
comes back to simplifying applications, using self-attestation
wherever possible, and requiring that all programs do these
actions.
On the landlord side, there is a whole variety of reasons
why landlords seem to be refusing to participate. A solution to
many of those challenges is to provide the assistance directly
to the tenant, so that the tenant can pay the rent, and the
landlord, if they don't want to be involved in a government
program, doesn't have to be involved at all.
Only 28 percent of programs are currently using direct-to-
tenant assistance explicitly, and all should be required to use
this essential safeguard as would happen under Chairwoman
Waters' legislation.
Mrs. Maloney. Thank you. My time has almost expired, so I
yield back, and I thank you, Chairwoman Waters, for your
leadership on this important program. We are working very, very
hard to implement it on the ground across the country. Thank
you. I yield back.
Chairwoman Waters. Thank you very much. The gentlewoman
from Missouri, Mrs. Wagner, is now recognized for 5 minutes.
Mrs. Wagner. Thank you, Madam Chairwoman, but we are not
working very hard to get this administered. Because you know
what, the money is not getting out the door to the people who
need it, after months and months and months and months.
For far too long, struggling Americans, both renters and
landlords in Missouri's 2nd Congressional District and beyond,
have not received the assistance that Congress authorized.
From what little data--I think the last was in July--that
Treasury provided us since Congress has approved nearly $50
billion in rental assistance, only $4.8 billion, or 10 percent,
of these funds have made it into the hands of those who need it
most.
It is clear to the American people that the Biden
Administration has failed to distribute billions in rental
assistance.
Months ago, Republicans introduced legislation to cut
through the bureaucratic red tape, to streamline this rental
assistance program to get this money out the door to support
hardworking Americans.
However, Democrat leadership completely ignored this good-
faith effort, and I think it is critical that Treasury
Secretary Yellen take responsibility for the program's failure,
and appear before this committee as we have requested on
several occasions, to no avail, so that we can better
understand what is keeping so many of America's tenants and
landlords from receiving these funds in a timely manner.
Instead of working in a bipartisan fashion, and
incorporating the much-needed provision of Ranking Member
McHenry's legislation, Democrats have been trying to shove
through a bill, in the 11th hour, that is full of bureaucratic
red tape without any input from across the aisle, and are
needlessly putting families at risk of eviction and pushing
mom-and-pop landlords out of business.
We are not helping renters, and we are actively hurting
landlords.
Mr. Schwartz, Mr. Winn, COVID hit in March of 2020, which
was 18 complete rent cycles ago. This means there may be some
landlords who have not been paid a full month's rent in a year-
and-a-half. What financial impact has COVID had on landlords to
date, Mr. Winn?
Mr. Winn. Thank you for that question. Currently, there are
$37 million in accounts receivable and delinquency rents across
our portfolio. Despite all of the efforts I testified about
that we have done, only half of the residents have actually
received the funding that they are eligible for, and the
tenant-consent aspect of that, we feel is the largest barrier.
We have done the communication. We have met with them. We
have filled out the applications. We have handed them the
complete applications, and, yet, 15,000 of our residents who
are eligible have not received the assistance.
Mrs. Wagner. And yet, we are sitting on over $40 billion,
much of which was in the CARES Act back in last December that
is still sitting there in this fund, not distributed. It is
disgraceful.
What incentives do you think, Mr. Winn, would make a
meaningful impact in helping to deliver this emergency rental
assistance to repay those debts?
Mr. Winn. Very quickly, it would be informed consent as
opposed to signatures by the tenant so that landlords can apply
on their 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.
Mrs. Wagner. Yes.
Mr. Winn. 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.
Mrs. Wagner. Thank you. The December effort, which was a
bipartisan CARES Act to get the money to eligible households
quickly and efficiently, was hastily undone with the creation
of the Democrats' Emergency Rental Assistance 2 Program in
March. And that, and the Dems' bill, that $1.9 trillion bill,
was a second parallel program with similar purposes but
different rules, timelines, and incentives. And most of all,
what is most egregious, is that it pushed the end date of the
Biden Administration's mismanaged program out to 2025--2025. We
need rental assistance now, not in 2025.
We have to the fix this program's bureaucratic problems and
come together, Madam Chairwoman. I yield back my time.
Chairwoman Waters. Thank you. The gentlelady's time has
expired.
The Chair now recognizes the gentleman from California, Mr.
Sherman, who is also the Chair of our Subcommittee on Investor
Protection, Entrepreneurship, and Capital Markets, for 5
minutes. Let's get beyond political talking points. Let's
legislate.
Mr. Sherman. Absolutely. I think this is the hearing we
should have, not a theatrical hearing where we bring in big
names. And what we need is people who are on the ground who can
help get this program to work better.
That being said, this program is not the best example of
government working together to help people. And those of us who
want government to help people in need bear the rhetorical
burden of showing that government can be effective.
It is an emergency program, and an emergency program is one
where you are trying to build a plane while you are flying it.
It is not that easy to put something together in an emergency,
but we should have done better, and I think with this hearing,
we will.
Mr. Schwartz, perhaps briefly you could tell us, what are
the impediments faced by property owners when trying to utilize
the Emergency Rental Assistance Program that have led some
owners to not even participate in the program?
Mr. Schwartz. Yes. We have talked about one of them, which
is that owners would like to participate, but the resident
doesn't want to participate, and so having that ability to
apply on behalf of the resident is super important.
Also, what we have seen is strings attached, like
additional moratoriums that you accept assistance but you are
subject to a new moratorium. Landlords are very reluctant to
sign up for more strings attached to accepting the assistance.
Another one is rent--or debt cancellation, where you receive
assistance that is below what you are owed and that settles the
debt.
We don't want to add barriers, and those are two things
that are in this bill that we think will make landlords
reluctant to participate in the program. And the best solution
to solving this is getting the ERAP dollars in the hands of the
residents and the landlords.
Mr. Sherman. I think, also, this crisis will determine
whether other people get involved in investing and building new
apartment buildings. And to put people in a position where they
have to pay the mortgage and they can't collect the rent is not
going to encourage people to go into this business.
Ms. Yentel, we have almost half of the renters in this
country paying more than 30 percent of their income on rent. We
need to build 328,000 new apartments every year. We are not
even close to that. The COVID crisis has slowed construction.
What policies would you suggest to create an environment
that incentivizes additional housing development and the
preservation of housing we have now?
Ms. Yentel. You are absolutely right that the pandemic
exacerbated a preexisting affordable housing crisis. Many of
the same renters who struggled to keep up with rent during the
pandemic, also struggled pre-pandemic, and they will continue
to struggle post-pandemic, unless and until Congress invests in
long-term sustained solutions to build a housing social safety
net in our country.
And many of the investments that are included in the
reconciliation bill that Chairwoman Waters released are the
kind of investments that are needed: a major expansion of
rental assistance to preserve our country's public housing
infrastructure; to build more apartments affordable to lowest-
income people through the National Housing Trust Fund; and to
incentivize or require local governments to reduce or remove,
eliminate restrictive local zoning that inhibits the supply of
any kind of apartments and especially affordable apartments and
drives up costs for everyone.
Mr. Sherman. Everybody is for more apartments, but not near
them. It is a problem that local government faces.
Mr. Schwartz, many owners from large to small have been
carrying these rental balances that they haven't collected.
They still have to pay their mortgages, et cetera. What does
that ultimately mean for the solvency of property owners, their
ability to continue to be in the rental housing business, and
should we be concerned about the overall market and systemic
effects?
Mr. Schwartz. Yes, we should be concerned. There have been
no reciprocal moratoriums with property tax bills, or garbage
collection bills. Those are all due in full. The solution to
that is the ERAP and getting that in the hands of the
landlords, because there is financial distress. And we have
seen that the most with smaller landlords who can't pay their
bills.
Chairwoman Waters. Mr. Schwartz, the time has expired.
The gentleman from Texas--
Mr. Sherman. Thank you.
Chairwoman Waters. --Mr. Sessions, is now recognized for 5
minutes.
Mr. Sessions. Madam Chairwoman, thank you very much. And
the opportunity to have our witnesses here today is
appreciated.
Mr. Morris, I would like to perhaps engage you first, if I
could. The legislation, when it passes Congress, is given to an
Administration who then offers and makes the legislation
conform to their ability to offer guidance for things to work
the way the legislation is designed.
Can you please tell me your working relationship on a local
basis with the Administration people, whether it be in HUD or
whether it be in Treasury, about the guidance that you have
received and what feedback you have given back to them?
And the reason why I am asking this is because we have no
one from the Administration who can defend themselves on this,
so I am interested in your answers about that guidance and what
you have told them back about making this work better.
Mr. Morris. At least from the perspective of rental
assistance here in Philadelphia, there was an existing
Philadelphia eviction prevention project that had been working
on these issues from at least 2017.
So when the pandemic hit, we started engaging both our
local city council and State legislative leaders and the
Pennsylvania Housing Finance Authority, who had the first round
of rental assistance, on making the program more effective,
eliminating barriers that would basically discourage
participation.
So, we have been involved in that process through and
through. And at least in building out rental assistance, every
time an issue is brought forward to us by tenants or landlords
with whom we engage, we provide that feedback to the agency and
see how we can address that.
Self-attestation has been a major issue, and we have gotten
to the place where landlords or landlords' counsel can now
provide letters to agencies that verify tenancies and show how
much is owed without additional barriers being put in place.
So, we have been working in constant communication with our
local representatives to try and improve the program every step
of the way.
Mr. Sessions. Mr. Morris, in your locality in Pennsylvania,
were you given the flexibility to amend what we have heard
would be the paperwork that we heard in California is not in
any language but English--were you given that authority and
responsibility ahead of time to change that, or was that just
part of the bill that said, only provide this in English for
the application?
Mr. Morris. I believe we were given that authority, and we
also requested additional guidance from the Federal Government
through Treasury for additional flexibility around how we
administer the program. So we are in constant communication to
make those flexibilities happen.
I believe, just generally, in terms of language access, we
are required to provide the application in more than English.
We also work with the Neighborhood Action Council to make sure
that there is an agency out in the community that can target
individuals or create another location where someone can go and
apply and get that assistance.
Mr. Sessions. Yes, and thank you. And, Mr. Morris, perhaps
you are providing the feedback today to us, which is why not
only Mr. McHenry but also Mrs. Wagner are saying that we
believe that what should have happened today is that we
actually heard from the program administrators about the
flexibility that they are providing across the country and
following the Federal law when they see, for instance, in
California, where the applications are in English only, as the
testimony today was given to us.
And this is disturbing to us, because in the State of
Texas, and I am sure that what has happened is Ms. Yentel's
feedback helps us to see who is successful, and there are
characteristics of success that the Administration would see or
those administering these programs, and then to know
specifically what they were doing from receiving feedback after
they see perhaps those that were more effective than others.
And, Mr. Morris, I just want you to know that you and Ms.
Yentel and Mr. Schwartz are providing us information, but we
are interested in a follow-up on this. I am personally
interested in what kind of success you are finding with
feedback from the Treasury Department in making this work, and
whether they actually are a hindrance or a help, whether they
are attempting to provide you with the needed feedback that I
would say would come from the guidance that they would need to
have and see from across the country.
So, Madam Chairwoman, I would request that, as Mr. McHenry
and Mrs. Wagner have suggested, that we need to dig down with
information about providing the guidance from a national
perspective of not only the Secretary of the Treasury but their
feedback about--
Chairwoman Waters. Mr. Sessions, your time has expired.
Mr. Sessions. --how we would make this work.
I thank the gentlewoman, and I will yield back my time.
Chairwoman Waters. Thank you.
The gentleman from Texas, Mr. Green, who is also the Chair
of our Subcommittee on Oversight and Investigations, is now
recognized for 5 minutes.
Mr. Green. Thank you, Madam Chairwoman.
Madam Chairwoman, I am very proud to associate myself with
your legislation. Your legislation does what I have been
calling for, which is to ensure that the rent is paid. The
tenants will have the opportunity to access funds, but also,
the landlords will have an opportunity to access these funds,
and they can access funds for back rent.
Some things bear repeating, Madam Chairwoman--Landlords can
access funds for back rent. I think this is exceedingly
important for, yes, all landlords, but especially for the mom-
and-pops who have had to bear the burden of maintaining
property over so many months now.
So, I proudly associate myself with this program, and I
would thank you for also looking into how we can inform people.
A good many of the people I represent are not knowledgeable
about programs. This program that you are providing now, this
legislation, would inform people of what is available to them.
I think this is most beneficial.
And, finally, the landlords will have an opportunity to not
only get back rent, but rent for some time out into the future.
The total sum of months can be up to 24 months. So, this is an
outstanding program.
I would like to, if I may, Madam Chairwoman, mention one
additional thing. There are many people who are still suffering
as a result of the Community Development Block Grant Disaster
Recovery (CDBG-DR) funds that have not been properly allocated,
and Ms. Yentel has some knowledge of what is going on with
CDBG-DR, because she happens to be associated with some 800
national State and local organizations calling for codification
of a program.
So, Ms. Yentel, I would like to yield time to you to
explain why there is such broad support for the codification of
CDBG-DR and to a statute at this time.
Ms. Yentel. Sure. Thank you, Congressman Green. The CDBG
Disaster Recovery Grant Program is one of the most essential
resources that communities receive after disasters, but the
program is not permanently authorized, which means that every
time there is a disaster, it needs to be reauthorized
essentially through the appropriations bills, the supplemental
bills that provide funding.
This slows down the process pretty significantly of getting
resources to communities, and it means that very often, the
rules for the program get rewritten each time, creating a lot
of uncertainty to local communities when what they most need is
certainty and money to start helping people repair and get back
on their feet after disasters.
The Reforming Disaster Recovery Act, your legislation,
would permanently authorize the bill, which would in and of
itself mean resources would reach communities faster. It would
also require data sharing across programs, which would help to
identify gaps in need and ensure that those are being met. And
it would allow for much greater public participation in
disaster recovery efforts. Altogether, it could help to lead to
more equitable and complete disaster housing recovery in
communities hit by natural disasters.
Mr. Green. A second question for you--
Ms. Salazar. Excuse me, Mr. Green? If I may jump in on
that, Mr. Green. I am so sorry to interrupt you.
Mr. Green. I will yield to you.
Ms. Salazar. Thank you so much, Mr. Green. I just needed to
note that the residents of Oregon are still waiting for
disaster recovery dollars from last year's historic and tragic
wildfires. So, I just wanted to lend my support to Ms. Yentel's
statement.
Mr. Green. Well, let me extend my sympathies to the people
that you represent, as well as the people in Texas whom I
represent. We have a similar circumstance, and I believe Mr.
Cleaver would attest to a circumstance that he is having to
negotiate as well.
But let me just ask this of you, Ms. Salazar, since you are
now speaking to me. This self-attestation seems to be pretty
important, and it seems to be something that the chairwoman has
placed in this legislation. Explain how important this self-
attestation is?
Ms. Salazar. Thank you so much, Mr. Green. You are
absolutely right that tenant self-attestation has proven to be
incredibly helpful to expedite the delivery of rental
assistance. I will also note that it is a big shift for many
program administrators who are charged with the important work
of preventing fraud and running these programs with Federal and
State and local oversight.
And so, that is why we are supportive of the safe harbor
provision in Chairwoman Waters' legislation that would provide
that assurance to program administrators that self-attestation
is appropriate, useful, and encouraged in the program.
Mr. Green. Thank you, Madam Chairwoman. As I yield back, on
a scale of 1 to 10, I would give your program, your legislation
an 11. I yield back.
Chairwoman Waters. Thank you, Mr. Green.
The gentleman from Florida, Mr. Posey, is now recognized
for 5 minutes.
Mr. Posey. Thank you, Chairwoman Waters.
Mr. Winn, you were talking about your outreach, I guess
through some church groups and others in your opening
statement, and you got cut off. If you would like to finish it
up now, I would be proud to give you the time.
Mr. Winn. I appreciate that, and I will do that. So,
despite all of that outreach, these are the statistics. To
date, WinnCompanies has been able to work with 15,000
households to apply for $22 million of ERAP support. Of this
amount, $17 million has been formally approved.
And I recount all of our efforts not to boast about what we
did, but to make the point that despite all of these herculean
efforts that a company of our size can actually perform, we
still have 15,000 additional households who are eligible for
ERAP financial support, but who have not yet participated
because of program inefficiencies. It leads me to conclude that
smaller landlords, without the possibility of the resources
that we enjoy, must find themselves in an even more untenable
and more unfair position. It leads to the conclusion that
something needs to change.
Despite our efforts, we, as I mentioned, and our clients
are still carrying $37 million in delinquent rent. Within that
universe of households, 2,400 households who are eligible for
the assistance otherwise are not able to participate because of
more restrictive income guidelines in certain States.
On top of this is the 15,000 eligible households that I
mentioned who are noncommunicative, despite our best efforts,
and for good reasons and for understandable reasons--
traumatized by medical or financial hardships, language
barriers, sometimes fearing insurmountable rental
delinquencies, or technology barriers. Some are confused by
mixed messaging on eviction moratorium. Some simply just don't
trust the system. Regardless, the unfortunate result is that
too many of the very folks that the ERA Program seeks to help
are those who are not benefiting from the program.
So, the real-world solutions are the direct tenant
applications with informed consent to the tenants for 10 days.
But we also believe there shouldn't be additional restrictions
placed on that without matching funding. Said differently, if
there were to be an agreement that if you take these funds, you
have to stably house residents for 120 more days, we ask for a
requirement as rather than a suggestion that rental assistance
funds be made available to match that obligation.
We also want to make sure that this happens, so it is not a
major deterrent for landlords across the country to enter into
what is otherwise a great program. We should mandate the
allowance of landlords to directly apply for funds and make
sure that those are processed quickly.
We want to make sure that the programs are combined and
that the eligibility is raised to 24 months rather than 18
months. And we want to make sure that there is an
implementation mandate for bulk applications by landlords
rather than just the allowance of it, because we have seen
across the States we work in that many of the ERAP
administrators will not allow bulk applications even though it
is permitted by the legislation.
I just want to end by saying that I believe that the work
of this committee has been excellent. I believe these
amendments are required. I don't believe this is a political
issue. I believe this is a practical issue. And if we can reach
more people, we are all better for it.
Mr. Posey. Thank you.
Mr. Morris. Mr. Posey--I 'm sorry, Mr. Posey, if I may just
add to that really briefly. While I support all of the proposed
changes that Mr. Winn has just highlighted, I think it is
critical that tenants are informed, as the bill proposes to do,
that something has been done on their behalf so that they can
govern themselves accordingly and that the landlord-tenant
relationship can be preserved on a forward-going basis.
Thank you.
Mr. Posey. Do any other witness want to weigh in on this?
I have just wondered from the beginning, and I even
mentioned it at the last hearing, why we wouldn't turn to the
Department of Housing and Urban Development, that has a network
in place already to deliver assistance.
I wonder why we would create a new program in the Treasury
to distribute rental assistance through a network of guarantees
that are yet to be put in place. If we were going to start
giving out free petroleum, I think the place to start would be
through existing gas stations.
And I see my time has expired. I yield back. Thank you,
Madam Chairwoman.
Chairwoman Waters. Thank you very much.
The gentleman from Missouri, Mr. Cleaver, who is also the
Chair of our Subcommittee on Housing, Community Development,
and Insurance, is now recognized for 5 minutes.
Mr. Cleaver. First of all, thank you, Madam Chairwoman, for
introducing this legislation that is so desperately needed.
And, Mr. Morris, in your statement, there is a part in
there that I think everybody should make sure that they focus
on, where you say something like, all around the country
tenants and landlords are experiencing widespread delays in
processing the rental assistance application. And you go on and
you talk about the number of people in Philadelphia whose
applications have not been processed and so forth. Do you
remember that statement?
Mr. Morris. Yes.
Mr. Cleaver. Okay. The reason I want to focus on that is I
think what you are suggesting, and very strongly, I think, and
it fits in with what we are doing here, that we have to reduce
the delays, all of the barriers. And one of them, I think that
my experience is that the cities are trying to get the money
out the door, but you have to make sure that the grantees and
their partners are able to complete the application process,
and sometimes that is a challenge.
I think, and you may or may not agree, that anything that
we can do to help get the money out the door, including, in
some instances, for example, maybe getting the Hispanic
Chamber, the Black Chamber, and the Asian Chamber all working
to help interpret the application process for people.
Here in Kansas City, we have run into people who say, ``I
don't know what''--``I didn't understand that. I don't know how
to do this.'' Or in one case, one of my staffers and I had a
huge meeting, and somebody said, ``I didn't apply because I
didn't know I was supposed to apply, or I thought somebody else
would apply.''
Shouldn't we do everything possible to make sure that--I
think you are at 55,000 more. I don't know the exact number of
unprocessed applications. Do you think that there are some
things that we should include in this legislation, that I think
are absolutely a necessity if we are going to get this program
running at the optimum level? What do you think, sir?
Mr. Morris. There are a few things that I would say. At
least in the context of Philadelphia, we have already spent 85
percent of our ERAP funding over several allocations. So, there
is the need for more money to flow into the City to address
those applications that are still yet to be processed, and that
is a significant financial constraint that the program is going
to face.
In addition to that, making the program more flexible
through self-attestation, which we have already talked about. I
believe the first version of rental assistance required income
to be verified through the Department of Labor on a Federal
level, which created significant delays, so a lot of that money
was not spent in a meaningful way, so to the extent that we can
eliminate those barriers and that additional paperwork and
create additional sites and points for people to interact with
the program.
Outreach is going to be very critical in this process, and
the best way to reach people is in their communities, and that
might require that programs invest in having someone go out to
apartment complexes and inform them that there is a process
available to you to apply. It might involve putting mailers--
digital mailers in everyone's inbox, because most landlords use
portals to communicate with their tenants at this point in
time.
So, there is a lot that can be done in terms of outreach,
and there should be a kind of a no-wrong-door policy. If
someone shows up to apply, they should be assisted. And
documents are harder to get at this point in time, because a
lot of the Federal agencies--the Department of Health and Human
Services, Social Security, all of those agencies are now
remote. So getting paperwork is a significant barrier to
tenants, which leads to delays on the side for landlords.
So, to the extent that we can eliminate any red tape and
make it easier for both parties to apply and no one gets turned
away and any lapse of information is not necessarily held
against the tenant or a landlord, that is the best way to go
forward, and make the program easier to use and not harder.
Mr. Cleaver. Thank you very much. Very quickly, it is in
the language of our legislation--not this legislation but the
overall legislation--that municipalities can eliminate some of
the normal requirements in order to get this out quickly.
Many cities, including my own, I think--you can't expect
the head of a department to do something and later be
criticized for it--end up saying, okay, we need a 60-day period
for a response to an RFP or something.
There has to be a way that we get the word to all of the
municipalities. Maybe the mayors could be the ones who actually
sign for the participation of this program so they can
understand that the regular processes are relaxed in order to
get the money out quickly. Is that--
Chairwoman Waters. Thank you so very much. Thank you, Mr.
Cleaver. Your time has expired.
Mr. Cleaver. Thank you, Madam Chairwoman. You get a 13 from
my perspective. Mr. Green didn't go high enough. It is a 13.
Chairwoman Waters. Thank you so very much.
Mr. Huizenga, you are now recognized for 5 minutes.
Mr. Huizenga. Thank you, Madam Chairwoman.
And I appreciate my friend, Mr. Cleaver, getting into some
substance of these bills. And I do want to commend the Chair
for attempting to deal with some issues that we have some
mutual concerns about, and I want to start off with what I
think are some unified views of some of the problems.
We all agree that in 2020, when Congress appropriated this
money for the ERA 1, it was to eliminate rental arrears
accumulated by COVID-impacted low-income households. And then
there is, of course, the additional $21.55 billion in ERA 2 in
March of 2021.
I think we actually all pretty much agree as well that
there was a failure to get money out the door that not only put
renters at risk of eviction, but it also hurt mom-and-pop
landlords, who are more likely to own and operate affordable
rental units.
The other thing I think that is pretty unifying is that
Treasury--we all understand Treasury has failed to responsibly
administer more than $46 billion of Congress-appointed funds
and to eliminate these arrears. That is why we are sort of in
this spot.
Here is where maybe we diverge and we don't agree as much.
Many of us view that the changes made in this program by the
Biden Administration actually may have punished landlords and,
frankly, scared many of them out of the program. 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.
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.
Now, I understand that there is a real need that we all
have to deal with this, and I will take the Chair's request to
say that we need to legislate. I will note that I can see if
the Trump Administration had so badly bungled this program,
there would be a natural desire of my friends on the other side
to hold them accountable, and that is what we are here trying
to do with the Biden Administration.
So, let's talk a little bit about the bills themselves.
And, again, I commend the Chair for addressing specifically the
ability of landlords to go and get some remuneration when their
tenants won't sign off. Now, here is the key: Some
remuneration. And in my view, I believe this has been a legal
taking. The takings clause, the takings concept is, you forced
me to do something that legally I didn't have to do, but you
forced me to do it, so therefore, you need to owe me and you
owe me the obligation of what I legally own.
In the Chair's particular bill, it requires landlords who
submit applications without a signature of a tenant to accept
any amount awarded to them as satisfaction of the entirety of
the back rent that is owed back to March 2020.
It requires landlords who accept assistance, including
arrearages, without renter consent to agree to an individual 4-
month eviction moratorium for that tenant beginning upon the
date the assistance is received, so an additional 4 months.
It binds landlords who do not accept assistance without
renter consent to comply with, ``any conditions,'' imposed by
the Secretary to ensure that renters, ``remain stably housed,''
with no end date for such conditions. It requires grantees to
prioritize applications of tenants over those of landlords
submitting with no-signature applications.
It requires landlords who receive assistance to, ``set
aside and vacate any past eviction order from an assisted
tenant,'' and to, ``agree to seal any eviction filing, meaning
it never happened.'' We can't acknowledge that.
It removes accountability in protections that exist to
combat fraud. It prohibits grantees from requiring applicants
to submit proof of a written lease. It removes the tenant
income verification by a landlord. We could go on and on. And,
again, while I commend the other side for realizing we have an
issue, it seems to me these handcuffs really are not going to
get to that final goal and objective.
Chairwoman Waters. Thank you. Mr. Huizenga, your time has
expired. Thank you so very much.
The gentleman from Illinois, Mr. Foster, is now recognized
for 5 minutes.
Mr. Foster. Am I audible and visible here?
Chairwoman Waters. Mr. Foster, we can hear you.
Mr. Foster. Thank you.
Mr. Morris, I was glad to learn that Philadelphia is
proudly one of the cities that has legislated a right to
counsel for tenants facing evictions. This is obviously
monumental in a city where over 90 percent of tenants facing
evictions were legally unrepresented, compared to 81 percent of
landlords who typically have attorneys.
So, although the pandemic has cast an unforeseeable and
incomparable skew on the success of such a program, I imagine
that ensuring legal representation for tenants facing evictions
would greatly reduce the level of unjust evictions or evictions
in general.
So, Mr. Morris, can you speak about the extreme importance
of having legal representation in eviction cases? And more
broadly, could you explain why organizations like Community
Legal Services, Inc., or the Legal Services Corporation
nationally, are vital to protecting marginalized people,
especially during times like this?
Mr. Morris. Thank you for that question, and I would be
happy to. I think it is critical, especially now in the context
of the COVID-19 pandemic, that tenants be informed of their
rights and protections that exist in any sort of eviction case.
Evictions have long-term consequences for tenants beyond
just being displaced. If you displace a family, you displace a
child out of school, you potentially displace an adult out of
work, and you can pack a family in poverty for generations to
come, because the cost of a forced move is both what you owe to
the landlord that is evicting you, the cost of relocation and
the cost of finding new housing, and any collateral
consequences that come from being displaced in that period.
To the extent that a tenant can be informed and given the
ability to self-advocate just as a bare minimum, to know that
you have rights as it relates to funds that have been received
on your behalf, your landlord has been paid and made whole and
you are allowed to stay, that is critical information that
tenants otherwise often don't know unless they are connected
with legal services or other representation.
Sometimes, there are city protections or ordinances that
come into play that require landlords to meet certain standards
of housing, just like minimum housing standards that tenants
have to live in and then pay rent. If those standards are not
being met, then the landlords should not be able to use the
court to both collect rent and evict a tenant out of those
types of housing units.
And with the affordable housing crisis that is going on in
the United States, it is critical now more than ever that
tenants are equally as informed or have access to
representation, because a courtroom is a traumatic place. You
enter a courtroom where you know that you owe someone a debt.
Your perspective is, I don't have the ability to pay this
money, but I also have nowhere to go with me, my children, and
everyone else in my household on a normal day, and then you add
the pandemic to that and that is significantly more of a
pressing issue.
And as has been shown, and as I put in my testimony, the
majority of people facing evictions in the City of Philadelphia
are single parents, most predominantly Black and Brown females
who are already living in poverty, and the poverty is
exacerbated by the loss of income. They are more likely to work
in industries where there is sporadic unemployment or these
industries have been directly impacted by the pandemic. They
are forced to be frontline workers or workers who are at a
greater risk just by health morbidities for getting COVID-19
and taking that into their household where they may have
vulnerable family members.
So the goal is always to empower tenants to be able to make
decisions, and to the extent that we can balance the playing
field and create greater flexibility for those tenants, that is
always the goal. No one knows more than an individual who is--
Mr. Foster. Yes, excuse me. So, you would consider that
adequate funding for Legal Services Corporation for the
explicit purpose of assisting tenants during this sort of
situation is really an essential element for ensuring fair
housing infrastructure?
Mr. Morris. It is essential, and it is highly critical for
the continued success of the rental assistance program, because
someone has to be there to assist tenants in holding landlords
accountable, not from the perspective of making sure that
landlords can't use the court system, but making sure that they
comply with any requirements that have been put in place that
protect tenants and allow them to remain housed in the long-
term.
Mr. Foster. Yes. And do you think that having an
expectation of legal representation on both sides of an
eviction dispute is likely also to be a useful gate in
preventing fraud, just that you have a lawyer who has his law
license on the line if he aids and abets fraud? Are we likely
to get a lot of the fraud concerns addressed that way as well?
Mr. Morris. I believe you will get a lot of the fraud
concerns addressed that way, and you will avoid a tenant
feeling unsure or unsafe about trying to communicate with their
landlord with the threat of a large balance hanging over their
head if they have an advocate that can stand with them and
ensure their legal protection.
Mr. Foster. Thank you.
Chairwoman Waters. Thank you very much, Mr. Foster. Your
time has expired.
The gentleman from Kentucky, Mr. Barr, is now recognized
for 5 minutes.
Mr. Barr. Thank you, Madam Chairwoman.
And I would like to echo the sentiments of Ranking Member
McHenry and some of my other colleagues that I am troubled that
Secretary Yellen is not here to testify on this program. The
Majority invited Secretary Fudge to testify before the
committee almost 2 months ago, which was somewhat informative
but gravely insufficient for the gravity of the situation.
Here we are today with another hearing on the same topic to
discuss why less than 11 percent of the funds appropriated by
Congress almost a year ago have been used to support renters
and landlords, yet the responsible party remains absent from
our witness lineup.
Congress directed Treasury to be the primary steward of
these funds and to operate the program in such a way that it is
just struggling renters and landlords. Yet, despite her direct
responsibility for this bungled operation, Secretary Yellen has
not testified before this committee, and the Majority has not
even invited her to do so.
While I am sure our witnesses today will be able to provide
some helpful insight, we do need answers from the ultimate
decision-maker and the party responsible for this total mess,
and that is Secretary Yellen.
Another preliminary comment, and this is maybe a different
take from my colleagues on both my side of the aisle and on the
other side of the aisle, yes, we need to expedite the emergency
assistance. That is why Congress passed it. But I hear a lot of
talk in today's hearing about landlords, about tenants, and
they have very important interests. But there is someone that
nobody has been talking about here in this hearing, and that is
the hardworking taxpayer and the taxpayers' sons and daughters
and granddaughters and grandsons who are incurring mountains of
debt with this exploding welfare state.
And I think what we are really talking about and hearing
about today is not just the incompetence of the Biden
Administration itself, but this program proves that big
government welfare programs are ineffective and they are a
recipe for waste, fraud, and abuse. The breathtaking
incompetence that we see here and the waste and the delays and
the open invitation for fraud is a direct indictment of
expansion of the Federal welfare bureaucracy.
Now, I want to ask Mr. Winn a question here. Feedback we
have heard from landlords across the country, including small
landlords who own only a handful of properties, suggests that
the ERA programs are difficult to access because of
bureaucratic red tape and preconditions that disincentivize
participation.
Mr. Winn, how can we improve the ERA programs to make them
more accessible for small landlords? How might the changes
under the Majority's bill, which actually adds reds tape for
landlords, affect participation in the program?
Mr. Winn. I believe that, as always, there is some solution
in the middle. And I believe that the changes in the Majority
bill by and large can help as long as we are not also adding
restrictions. What I mean by that is, the bulk application
processes where a landlord can say, a small landlord can say,
all of my eight tenants can apply for assistance, I can submit
as a landlord directly self-attestation about things like
income. That will greatly cut down on the red tape.
Mr. Barr. Yes, I hear you, and I am sympathetic to bulk
applications and landlord applications. But, again, I am going
to return--and I want to expedite these funds. And you haven't
heard this today from any Members on either side of the aisle,
but I am concerned about the taxpayer. This self-attestation
idea concerns me a lot.
The taxpayer is--we are talking about nearly $50 billion,
and we are going to just allow landlords and tenants to just
self-attest without any documentation of income or job? We have
10.5 million unfilled job openings in America, and the reason
is that we are paying people to not work.
We can't just continue to ask the taxpayers to subsidize
people to live on the taxpayers' dime. Why can't we have just
simple documentation, allow landlords to apply for tenants,
have sole protections for taxpayers who are getting fleeced?
Mr. Winn. I would say, one of the aspects of the original
bill is also audits that are allowed at the State or
administrative level. So to your point of fraud, I think that
if people are committing fraud, those audits hopefully will
catch that.
Mr. Barr. Let me just say, in conclusion, that the solution
to the Biden Administration's incompetence is not to dishonor
taxpayers by making waste, fraud, and abuse in this program
even easier. Taxpayers need to have confidence that the renters
who can afford rent are not just taking advantage of this
program, reducing funds available for those who actually are
eligible and who actually are experiencing housing instability.
And I think some of these reforms in the chairwoman's bill make
fraud not just likely but guaranteed.
And, with that, I yield back.
Chairwoman Waters. Thank you very much. Paying these
landlords is not waste, it is not fraud, and it is not abuse.
I will now call on Mr. Casten, the gentleman from Illinois,
who is now recognized for 5 minutes.
Mr. Casten. Thank you, Madam Chairwoman.
And thank you to our witnesses. I have learned a ton
through this hearing, and I appreciate you all taking the time
to do this.
Some of my questions are COVID-specific, and some of them
are about sort of the broader sort of landlord-tenant issues
that are going on. And, Mr. Winn, I would like to start with
you, if I could. If I have heard you right, you said you have
$37 million in accounts receivable delinquency in your books?
Mr. Winn. [Nonverbal response.]
Mr. Casten. I see you nodding, okay. I will take that as a
yes. Help me understand, how much did that increase during
COVID? How much were you carrying 18 months ago compared to the
$37 million now?
Mr. Winn. That is a good question. It has fluctuated. The
$37 million that goes across our entire portfolio, including
our clients, has fluctuated. It is definitely higher post-COVID
than it was pre-COVID. We have seen statistically about a 5-
percent drop in rental receipts because of COVID, and on a
portfolio of 100,000 apartments, that can add up pretty
quickly.
One of the interesting things to note is that the average
balance of a tenant in our portfolio is $1,400 of delinquency,
which is interesting because it is a fairly low number, but
that is also because of the affordable nature of our portfolio.
I would imagine if someone's portfolio was skewed to the
market, that probably doubles to about $3,000.
Mr. Casten. I seem to be frozen. Can you all hear me still?
Chairwoman Waters. We can hear you now.
Mr. Casten. Can you all still hear me?
Chairwoman Waters. Mr. Casten, you are on.
Mr. Casten. Sorry. We were frozen there for a second.
Can you estimate--are we talking about a 5-percent
increase? A 10-percent increase? How much has it gone up during
COVID, just a quick answer, if you could?
Mr. Schwartz. Yes. And I can answer too from our
portfolio's experience, but one thing I would say is our
delinquency is about 3 times as high during COVID as it was
before.
Mr. Casten. Okay. Since you picked up, Mr. Schwartz, and I
apologize for my IT issues here, how much of that are you
carrying on your books? When you borrow, you have this asset on
your books for whatever that receivable is. How much is either
your bank or your auditor--how much are they typically writing
that down? Are you carrying 80 cents on the dollar, 50 cents on
the dollar? How much are they writing off?
Mr. Schwartz. We have the job, our accounting department,
of how much do we write off. We are being optimistic that we
won't have to write much of it off because of emergency rental
assistance, and so we are reluctant to write off that right
now. But if we don't get the assistance, we will have to write
that off.
Mr. Casten. Okay. Ms. Yentel, then, speaking broadly,
beyond COVID, particularly for low- and moderate-income
tenants, let's say they get behind, they miss a payment, they
have lost their job and then they get it back, how often are
they able to become current, and how often are those tenants
just sort of carrying that debt sort of in perpetuity even
though they are staying current on their rent?
Ms. Yentel. Right. It is a really good, important question,
because many of the tenants who are behind on rent are very low
or extremely low income. They worked before the pandemic,
during the pandemic, and will be working after the pandemic.
They are many of the frontline workers who initially lost their
jobs or lost hours of work. They lost wages. They fell behind
on rent.
Even as they are employed now, it is difficult even pre-
pandemic. Many of them work at the lowest-wage jobs. They are
not able to make rent. They are certainly not able to pay back
arrears that are owed without assistance.
Many tenants during the pandemic made a lot of really
difficult tradeoffs. They borrowed money. They paid rent on
their credit cards. They stopped buying store-bought food,
which is why we saw such an increase in food pantries.
Mr. Casten. I am sorry to interrupt, but I want to get just
two more questions in.
Either Ms. Yentel or Mr. Morris, just quickly, can you
comment on what impact does that have on their credit score? If
they are carrying this rent that they can't pay even though
they are staying current going forward, is that a permanent hit
on their credit score when they first prepay utilities, and
what does that mean practically?
Ms. Yentel. Yes. Yes, there are all kinds of harmful
impacts that come both from carrying debt and having poor
credit scores. It makes it more difficult for them to get loans
that they might need in the future. They use credit cards again
to pay for things that they don't have the cash for. And
evictions as well are--a single eviction filing on a tenant's
record stays with them for years and harms their ability to get
affordable housing in the future.
Mr. Casten. I am out of time, but as you can just tell, and
I would welcome all of you to follow up, I am trying to make
this connection, and I don't know what this is, but for all of
you on both sides of this, if the landlords are carrying bad
debt that is affecting their ability to get credit, and the
tenants are carrying credit scores that are affecting their
ability to get credit, how do we bridge that gap from a policy
perspective?
Thank you very much. I yield back.
Chairwoman Waters. Thank you very much.
The gentleman from Texas, Mr. Williams, is now recognized
for 5 minutes.
Mr. Williams of Texas. Thank you, Madam Chairwoman.
I want to thank all of you for coming here today and
answering all of these questions. And I can tell you that every
landlord I talk to about this pot of money has been frustrated
with how slowly it has been getting to people in need. As much
as we need to ensure that renters are taken care of, we cannot
forget the landlords. They have financial obligations to handle
as well. This money could be a lifeline, but so far it has
failed to live up to what it was supposed to do.
So, Mr. Schwartz, could you talk--and you have done so well
today--about some of the hardships that your member companies
faced as a result of this eviction moratorium?
Mr. Schwartz. Sure. And one thing I would just point out is
that Texas is a model State for distributing--
Mr. Williams of Texas. Yes, I am going to talk about that
here shortly.
Mr. Schwartz. Okay. Good. Yes, the moratorium has created a
lot of problems in our industry. One problem I would point out
is it is a contributor to rent inflation. Someone suggested
there could be 1 million units out in the country that are non-
rent paying. That has been taken out of the supply when demand
is surging. Economics 101 says you are going to get big price
increases, and that is an unintended consequence of the
moratoriums.
They have caused landlords to have an inability to pay all
of their bills or to have to cut back on maintenance and
keeping up their properties. It has been a very challenging
environment, when you have residents who haven't paid in 18
months.
And there is some confusion with moratoriums. The
residents, in some cases, think it is a rent holiday, and so
they choose to spend their money elsewhere rather than pay
their rent.
And so this bill, we think, is important if the effect of
the bill is emergency rental assistance in the hands of people
who have arrearages and want to stay in the community so they
can continue to pay rent. But the moratoriums ultimately causes
housing instability and creates massive debt on behalf of the
residents and problems with the landlord.
Mr. Williams of Texas. Okay. Thank you. I am also concerned
that all of the government interference into mom-and-pop
landlords during the pandemic will lead to a greater
consolidation within the industry. Most landlords that I talk
to are not massive corporations, and do not have access to huge
lines of credit when things get tough, but only have a few
apartment units they are able to maintain and rent out to the
public. So when these people stop receiving rent payments, and
with the Federal assistance stuck in bureaucratic limbo, many
will not have any other option but to sell their properties.
Mr. Winn, how will the speed of these funds getting out the
door help prevent industry consolidation and ensure that mom-
and-pop landlords can once again thrive with their property?
Mr. Winn. I think it is a great point and a real concern.
And nobody wants to see ma-and-pa landlords go under because of
bureaucracy or because of process. So I really do think, as you
have said, the answer is in your question, which is the sooner
we can get the money to those who need it, the better. And I
think the bills that are being discussed do a good job of that.
But they do not do a perfect job of that.
And one of the things that we need to figure out is how to
incent those small landlords to actually use this program, not
to layer on restrictions that are burdensome to them, such as
making sure that they would forgive rents or partially forgive
rent that isn't covered by the rental assistance funding. I
think that would disincent small landlords, and that might have
the effect that you are discussing.
Mr. Williams of Texas. Thank you.
I have limited time here. Mr. Schwartz, I will keep this
one simple. What is my great State of Texas doing right that
other States around the country should mimic and copy?
Mr. Schwartz. I have this information from my team on the
ground in Texas. You are using a software called Neighborly
Software, which is a best in class, and so I would advise the
committee to follow some best-in-class best practices. It is a
user-friendly platform. It can bulk load applications, so
landlords who have a large number of units can bulk load it. It
has great technical support, and you can actually get someone
on the phone there pretty much anytime, so they have been great
to work with. And it has real-time tracking of the status of
the payment, so you can see what has been paid and what hasn't
real-time.
Mr. Williams of Texas. Thank you, and God bless Texas. And
I yield back, Madam Chairwoman.
Chairwoman Waters. Thank you very much.
The gentlewoman from Iowa, Mrs. Axne, is now recognized for
5 minutes.
Mrs. Axne. Thank you, Madam Chairwoman. And thank you to
our witnesses for being here.
I want to start with a little bit of background for our
witnesses. We have a couple of main rental assistance programs
here in Iowa, and there is a local program that has been doing
a really good job. It has Polk County and the City of Des
Moines working together on it, and they have actually allocated
all of the funds from the first round. But, at the same time,
Iowa's State program has not done very well with getting out
this aid, and as a matter of fact, has used less than 6 percent
of the money.
I see a lot of this coming down to just the choices that
are being made as to how the program is being limited,
including things like the State did, which was refusing to
allow tenants to apply for 3 months of forward rent that is
clearly allowed under the rules.
So, Ms. Yentel or Mr. Morris, can you share a little bit of
what you have seen that really separates the programs that have
done better with this from the ones that haven't?
Ms. Yentel. Sure, I would be glad to. Thanks for the
question. And I couldn't agree with you more that the fact that
some programs are doing so well in sending ERA quickly and
getting the money to the tenants who need it most is proof that
it is possible to do it, and we should look to those programs
to learn what is working there and implement it across other
programs as well.
And what successful programs are doing is having simple,
accessible applications. They are using self-attestation for
eligibility wherever possible. They are hiring the number of
staff that they need to handle the deluge of applications that
they are receiving. They are using direct-to-tenant assistance
when landlords refuse to participate. They are doing robust and
equitable outreach to make sure that tenants and landlords know
these resources are available and how to access them.
And programs like the example of Texas is a good one. Some
programs are course correcting. They are recognizing that they
got off to a bad start, or something is not working well, and
they are improving their programs as they go. Those are the
signs of successful programs in ERA.
Mrs. Axne. Well, I very much appreciate that.
Mr. Morris, let me ask you then, if we have a State
Government that isn't inclined to get the aid out to the
renters who need it, do you think that the changes that we are
talking about here today are going to be sufficient to help get
the funding into those people's hands, or do you think both
renters and landlords in Iowa would be better served by a group
that is willing to really help them?
Mr. Morris. I can't speak directly to the existence of a
government that is not willing to help tenants and landlords
who are struggling in this process. But I do think what bears
saying is that all of these States have existing networks to
help vulnerable households, and there is no reason why we
should be reinventing the wheel and not using those networks.
As you mentioned, they are systems that are set up to help
vulnerable populations access resources and they should be the
ones that State Governments consult at the frontline to set up
programs.
And there should not be an opportunity for States to create
additional barriers or different rules for programs that make
it harder for renters and landlords to participate. If a
Federal law says something is allowable, it should be allowed.
The legislation should probably say 3 months of forward rent,
``should be paid,'' not, ``can be paid.'' Just any additional
flexibility to make renters and landlords access funds is
welcome.
Mrs. Axne. Absolutely. I appreciate that.
Mr. Winn. I just want to say--
Mrs. Axne. What is that?
Mr. Winn. I totally agree with what Kadeem just said. I
think that was a great point that we have encountered as well.
Mrs. Axne. I appreciate that.
Let me shift a little bit here to ERA 2. Iowa has already
said that they are not intending to apply for the funds,
despite the fact that we continue to see renters evicted and
landlords without unpaid rent, as, of course, I have mentioned,
only about 6 percent of the funding has gone out.
Both landlords and tenants lose when this rental assistance
is not delivered.
Mr. Schwartz, I am wondering, with the second round being
available to help both renters and landlords for an additional
3 years, what are your thoughts on how it is going to affect
landlords by turning this down?
Mr. Schwartz. The reason landlords are turning that down is
that it doesn't prioritize arrearages, and we think that is an
important fix in this bill, and the McHenry bill takes a look
at that.
Arrearages are so important because the resident would like
that arrearage cleaned up. Even if they are not living there
anymore, they still hold that debt, and the landlord is still
pursuing collection. It could impact that resident's credit,
and the landlord still has their bills to pay and needs that
money to keep going. So we think that is really important, and
we hope that the committee can fix that. It is an important
fix.
Mrs. Axne. Thank you. My time has expired.
Chairwoman Waters. Thank you very much.
The gentleman from Arkansas, Mr. Hill, is now recognized
for 5 minutes.
Mr. Hill. Thank you, Madam Chairwoman. I appreciate you and
Ranking Member McHenry, even though you are not quite on the
same page--this issue is important, and it has just dragged on
for too long, which is why I was proud to support Mr. McHenry's
bill to advance this funding, simplify it, and get it out.
Because that is the main issue here, that we help the people
who are in arrears on their rent.
That is what Congress wanted to do last December. If you
are in arrears due to losing your job, or a terrible impact
from COVID-19, that is what we are trying to do with these
bills.
All of this other stuff, forward rent or whatever, is not
the core mission. The core mission is to help those families,
starting last April, who were brutalized in the economic
collapse of shutting this economy down, and haven't gotten back
on their feet.
And so it is frustrating, not only to tenants and
landlords, but it is frustrating to Members of Congress that
here we are, in September, and we are still talking about how
this could be a better program and help the people that we
intended to help last December.
I heard some discussion that was very interesting to me,
and I would like to try to get a little bit of data. I know it
will be anecdotal, I know it will be dealing with Mr. Schwartz
and Mr. Winn's testimony. But you have raised something that,
in meeting with my mom-and-pop landlords here in Arkansas, I
have certainly picked up on, which is, someone is impacted by
COVID-19 and is in arrears--April, May, June, July, last year--
they haven't gotten the benefit of this rental assistance, and
they moved, they left.
And, so, both of you referenced an interesting concept,
which is, of the rent in arrears that you have talked about,
and Mr. Winn cited $37 million, how much of that is in a unit
that is connected to a tenant who left months ago? Mr. Winn?
Mr. Winn. A significant portion, and I don't have the exact
number in front of me, but it is very significant. In fact, you
can make a connection between the uncommunicative residents,
the ones that we have not been able to reach, with the ones who
are more likely to leave, because they don't believe that the
system will help them, or they don't believe that the program
is for them, but they do know that their balances are
accumulating.
So I do think that there is that connection, and that there
is significant nationwide back rent owed for vacated apartments
for folks who don't believe they have a way out.
Mr. Hill. Yes, and that makes this even more complicated.
Mr. Schwartz, let me hear you on that issue, if I could,
please?
Mr. Schwartz. Yes. I don't have the exact number. Our total
30 days or greater past due is $8.5 million in our portfolio. I
don't know what percent of that is past due for someone who
doesn't live there. I would say, I don't think it is
significant. I think it is 10 to 20 percent, and that is a
guess, but it is a meaningful amount.
Mr. Hill. But I think it is a key point here, that there is
no tenant to fill out paperwork. The tenants walked out on the
lease and left. And so, that is a whole other complex and we
are not, per se, suggesting they be gone after, but we suggest
that we be able to process that money and get that vacant unit
paid off, and make that less of a problem here.
So, I hope that we will put some priority on that as we
talk through these issues. I thought that one was an important
one to highlight today, Madam Chairwoman.
Also, Mr. Winn, you have talked about--you described some
of the speeding provisions, like bulk applications, and
informed consent, that are in Madam Chairwoman's bill were
helpful, but that they are not as helpful because then we
extend this eviction moratorium.
So, you are arguing, Mr. Winn--and I will get you to
respond too, Mr. Schwartz--that these are useful items to help
speed up the McHenry effort of getting this money out, but it
is a contradiction to extend that eviction moratorium. Is that
your view, Mr. Winn?
Mr. Winn. I would say, yes, I think there should be a
middle ground. I believe as you mentioned, there are provisions
in the bill that are both necessary and will be very effective.
I do think they are burdened by more restrictions that will
have the unintended consequences of having landlords not wish
to participate--
Mr. Hill. Okay. Mr. Schwartz, can you give a quick
response?
Mr. Schwartz. Yes. There are two things in the bill that
could cause landlords not to participate. The first one is an
120-day eviction moratorium if you accept the ERAP funds, and
the second is the cancellation of debt if you accept ERAP
funds, even in the ERAP funds don't pay all of the debt. We
think that will impact landlord participation.
Mr. Hill. I really appreciate those candid short responses.
Madam Chairwoman, thanks, and I yield back to you.
Chairwoman Waters. Thank you very much. The gentlewoman
from Massachusetts, Ms. Pressley, is now recognized for 5
minutes.
Ms. Pressley. Thank you, Madam Chairwoman. I know firsthand
the fear and the trauma that comes with an eviction notice on
your door. Evictions are disruptive and violent. These are
violent events which destabilize families, but make it more
expensive and challenging to rent safe housing in the future,
to apply for credit, to borrow money, or to purchase a home.
Currently, almost a third of Black renters are at risk of
eviction. This eviction crises is exacerbating economic
injustice for Black families across America.
Ms. Yentel, while there is a clear economic-justice case to
support eviction moratoriums, wasn't the legal justification of
the CDC eviction moratorium always to help us get COVID-19
under control?
Ms. Yentel. Yes, absolutely. The purpose of the CDC Federal
eviction moratorium was to slow the spread of COVID-19 and
contain the virus. And research has since shown that expired
eviction moratoriums led to as many as 400,000 cases of COVID-
19, and as many as 11,000 deaths.
Ms. Pressley. That's right. So when I say eviction is
policy violence, that is not just some catchy turn of phrase.
We know that when 27 States lifted their eviction moratoriums
during the pandemic, again, it led to some 433,000 preventable
cases of COVID-19, and 10,700 preventable COVID-19 deaths. This
policy failure has ended the lives of more than 10,000
Americans.
Now, earlier this summer, before its expiration, some
Democrats, including our chairwoman, Maxine Waters, and I,
fought hard to implore every option to extend the eviction
moratorium including passing legislation.
Now, while we were successful in securing a targeted CDC
extension for a month, at the time there were not enough
Members of Congress who were willing to vote yes to help pass
this commonsense legislation to prevent a public health crisis
within a public health crisis.
Somewhere along the line, the conversation about the
eviction moratorium shifted from it being a reasonable public
health measure into an argument that Congress was anti-small
landlord. That is not it.
This is about saving people's lives. That was a ploy to
divide and pit working families against working families. Every
proposal before Congress has provided relief for renters and
small landlords alike.
Then, I discovered that the National Association of
REALTORS was the largest political action committee (PAC) donor
to candidates in the last election cycle, and suddenly, that
shift made sense.
The fight to extend the Federal eviction moratorium has
been derailed too many times because the single largest PAC
donor is the organization who was fighting, from Congress to
the Supreme Court, to ensure that renters are put last, which
means they are putting the public health last.
So, let me be clear. Our advocacy is about saving lives.
Congress has provided $46 billion to get landlords out of debt,
and now we need to protect renters too. Renters may not have a
multimillion dollar PAC behind them, but they have a growing
number of Members of Congress in their corner.
Ms. Yentel, yesterday, Dr. Fauci said that COVID-19 rates
are 10 times too high to consider the spread under control. Do
you think that the Federal housing agencies are doing
everything in their power to get COVID-19 under control by
protecting renters from eviction?
Ms. Yentel. I think they can and should do more, and
Congress should as well. Clearly, Congress should implement a
Federal eviction moratorium, as long as the Delta variant is
surging and people are dying.
But as you said, Congress doesn't have the votes to do so,
and so Federal agencies should act. We have urged HUD to
implement an eviction moratorium for all federally-subsidized
properties, which we believe they have the legal authority to
do now, and we have urged the Federal Housing Finance Agency
(FHFA) to consider what authorities it might have to similarly
implement an eviction moratorium on federally-backed
properties. Those two actions could protect about 30 percent of
renters nationally.
Ms. Pressley. Thank you. And we know there are an estimated
750,000 renters who could be evicted in the next few months.
This is an all-hands-on-deck moment. This is a public health
emergency. I urge every level of government to take urgent
action to keep people safely housed. And I yield back.
Chairwoman Waters. Thank you very much. The gentlelady
yields back.
Mr. Kustoff is now recognized for 5 minutes.
Mr. Kustoff. Thank you, Madam Chairwoman. Thank you for
calling the hearing today. And thank you to the witnesses for
appearing. I think one thing we have heard is that we are all
frustrated by the lack of funds that have been distributed by
the Federal Government, and I think many of us have concerns
that we have not heard from Secretary Yellen about the process
and that she should be here.
But with that said, Mr. Winn, can you talk about the
practical effects, if you will, of the problem of getting in
touch with past tenants who have already moved out and have
outstanding payments? Practically, are you able to get their
consent, and how would you go about doing this?
Mr. Winn. Yes. As I alluded to earlier, this has been a
real challenge for us. And I made a point of describing all of
our outreach efforts, at local levels, State levels, and
Federal levels, working with churches, and community
organizations.
And yet, we still have been unable to reach about half of
the tenant population, despite having filled out the
applications, and knocking on doors. As I alluded to, there are
many reasons that a tenant may not feel comfortable signing
that document.
And this is not meant to demonize any tenants. In fact, it
is meant to recognize that that problem exists, and to make
sure that landlords can apply with informed consent on behalf
of those tenants, or else I just simply believe the money will
not get out there. It will not get to those tenants. Those
balances will chase those tenants to the next place they live
on their credit report. It is bad for everybody.
I don't think we could have done anything more than we have
done, and I still think that we are only 50 percent successful.
I worry about the smaller landlords without our resources. They
would have been less successful.
Mr. Kustoff. I think you answered this, but I am going to
ask it in a different way. Prior to the pandemic, prior to 18
months ago, and I rightly applaud everybody who tried to work
with people, because there was no playbook, there was no
historical guide on how to deal and how to navigate through
this.
But with the tenants' outstanding balance during the
pandemic, what would that balance be where, essentially, they
would pass the point of no return? In other words, they
couldn't pay back a past balance and have to work on evictions?
Mr. Winn. I'm sorry. You were breaking up a little. Can you
say the last part of that question again?
Mr. Kustoff. Sure. I was talking about, prior to the
pandemic, what level of back rent would you say was past the
point of no return, that the tenant would be unable to pay
back, and you would have to begin eviction proceedings?
Mr. Winn. Yes. I would say from a statistical point of
view, generally speaking, we, as a developer and as an owner,
would underwrite 1 percent to 2 percent of bad debt as an
allowance. We look at the entire rental. You might have an
allowance for 1 or 2 percent. That number has increased
significantly because of COVID. And one of the things that I
think everybody on this call is worried about is that it is
mounting. It is not getting smaller. There continue to be folks
who suffer job losses, and have largely not rebounded because
the COVID epidemic is still with us.
Mr. Kustoff. Thank you, Mr. Winn.
Mr. Schwartz, I think that Mr. Hill was asking you about
the Expediting Assistance for Renters and Landlords Act, the 4-
month eviction moratorium. Can you talk about, again, the
practical effects of the proposal in general, what is good, and
what is bad, following on your testimony?
Mr. Schwartz. Yes. The best eviction mitigation tool is the
ERAP funds getting in the hands of the landlords. If you tie
that to an 120-day eviction moratorium, what is going to happen
is the landlords have shouldered the burden of this pandemic
over the past 18 months, and have large rental balances due to
them. And now that that is gone, at least the Federal
moratorium, and they are told you have to sign up for a new
moratorium if you accept the emergency rental assistance, there
is going to be a lot of reluctance, and I think you are going
to kind of do the opposite of what the bill is intending to do.
You are going to contract the number of landlords who want to
participate in the program by including that in the bill, and
that is our concern.
Mr. Kustoff. Thank you, Mr. Schwartz.
My time has expired. I yield back.
Chairwoman Waters. Mr. Lynch is now recognized for 5
minutes.
Mr. Lynch. Thank you, Madam Chairwoman. Thank you very
much. First of all, thank you, Madam Chairwoman, and I
appreciate all of your efforts to get this money out. We are
facing some difficulty here, but I do support your solution.
I actually know Mr. Winn personally. He is a friend of
mine. I actually worked with his dad back in the day,
developing a lot of the affordable housing in my district, and
I want to just say a couple of things about the WinnCompanies
before I ask my question.
Number one, when this pandemic first hit, and there was
great, great anxiety out there, as there is now, the
WinnCompanies came out right away and they did two things.
Before Congress could act and before the CDC could act, the
WinnCompanies came out and they announced to their tenants--
well, first of all, they announced to all of their workers--in
our district, we have union carpenters, union electricians,
union plumbers, and union laborers who maintain the housing,
and they do a great job. And the WinnCompanies came out right
out of the box when COVID hit, and jobs were shutting down all
over the place, and people were being asked to hunker down, and
announced publicly that they would not lay off any of their
workers and that they would continue to pay them to do the
plumbing jobs and to maintain the properties.
So, that lowered the anxiety level among a lot of the
workers.
The second thing they did--and, again, this is before the
CDC moratorium--is they came out and announced to the tenants
that they would not evict anybody for nonpayment of rent, and
they have thousands of units.
And that did wonders for the phone calls that I was getting
in my office regarding my folks in public housing.
I know most of the members on the committee realize I grew
up in public housing, lived there for almost 20 years, myself,
my mom, my dad, and my five sisters. The local housing project
that we grew up in is now renamed after my mom, the Anne M.
Lynch Homes at Old Colony. We are very proud of that, so I am
all in on public housing. Look, if we didn't have public
housing, my family and I would have been homeless. I know what
that fear feels like.
We had some tough times growing up. My dad used to say that
we had to save up to be poor. We had real difficulty. And I am
proud of my dad and my mom for pulling us out of that. They
both worked really, really hard, and I realize the opportunity
that public housing gave us.
So, I am going to ask you, Mr. Winn--look, you and I know
that we have been trying to develop affordable housing in the
City of Boston, which is a high-rent location, for years, and
we have a couple that are coming up that we are making progress
on, which is good, thanks to Chairwoman Waters. Thanks to
Chairwoman Waters, we are finally getting back into the
business of affordable housing. We have been retrenching at the
Federal level for the past 20 years, and now Maxine, God bless
her, has pushed a lot of initiatives to help people in public
housing and to create more of it.
But what is the biggest obstacle to us? Even when we have
land available, we are having difficulty developing affordable
housing and workforce housing that would help the people that
we work for. What are some of your thoughts on that?
Mr. Winn. Thank you, Congressman Lynch, and thank you for
those kind words, and for being such a great advocate for the
City of Boston and your district. Really, I think what Congress
can do is to concentrate more resources on public housing.
The Low-Income Housing Tax Credit Program has been
wonderful for creating new low-income housing, but there is
aged infrastructure in public housing across the country, and
for years it has been underfunded.
So, I want to thank the committee, and I want to thank
Chairwoman Waters and Congressman Lynch and everybody else who
fights for HUD resources, because people are living in
substandard conditions, not because of management, but because
of a lack of funding.
And so, I think if we could increase the Choice
Neighborhoods funding, the HOPE VI funding, I think we are
going to be better off as a community.
Mr. Lynch. Thank you. And Mr. Winn, I just want to say that
I know that you do a lot of work on military housing--Ft. Hood,
Camp Lejeune, a lot of our bases. And this is probably not
appropriate at this hearing, but I would love to sit down and
talk to you about how we can do a better job of housing our men
and women in uniform and their families.
Thank you. I yield back, Madam Chairwoman.
Chairwoman Waters. The gentleman from Ohio, Mr. Gonzalez,
is now recognized for 5 minutes.
Mr. Gonzalez of Ohio. Thank you, Madam Chairwoman, for
holding this hearing today, and I certainly want to thank
Ranking Member McHenry for all of his work on this important
topic. Mr. McHenry has been talking about the importance of
getting this right for months now, and he should be commended
for his advocacy on behalf of renters and landlords throughout
the country.
The fact of the matter is that this program has been poorly
designed from the beginning, and we should take next week's
scheduled markup and include Mr. McHenry's comments and his
legislation to streamline Federal dollars.
We have put in a lot of programs since the pandemic has
started, and I will contrast this one with the Paycheck
Protection Program (PPP). When you have insatiable need, and a
well-designed program, the money flows, it gets out quickly,
and it gets into the economy in the right way.
That is what happened with the PPP. It wasn't perfect, but
there was a big need, and the program was designed for speed,
and it got out.
When you have a poorly-designed program or a lack of
demand, you get this outcome, which, in Ohio, is that only 6.8
percent of our money has actually been distributed. I do
believe there is demand, but it is blatantly obvious when you
look at the numbers that this program is poorly designed.
And I would at least suggest we think about educating
people, as more than 50 percent of renters and 40 percent of
landlords are unaware of the Federal assistance. But today, we
are talking about the trouble that renters and landlords have
had in accessing Federal assistance, and this is all within the
backdrop, of course, of the eviction moratorium which was in
place until just last week.
Mr. Winn, I want to start with you. Just briefly, what has
been the financial impact on landlords, and how have we seen
landlords respond to the moratorium by putting in restrictions
on new units as they come available that may be a barrier to
some lower-income Americans?
Mr. Winn. I think that the repercussions are significant.
And I think we are, as an industry, very excited to see these
changes to the ERAP program, because so many of the hardships
that are currently outstanding among the landlords would be
resolved through a better administration of these funds.
So, we are talking about the right thing, but if the
administration of these funds is not improved significantly,
then the $37 million of owed rent in our case, the billions of
dollars across the country, is literally going to be lost,
because again, tenants are going to move on, landlords are
going to lose their properties to foreclosure, and they will
never recover.
So the effect has been significant, but there is a wait-
and-see attitude to see if we can figure out this ERAP program,
because that will make a huge difference.
Mr. Gonzalez of Ohio. Thank you. And again, Mr. Winn, in
Chairwoman Waters' bill, it contains a provision which states
that if a landlord receives rental assistance without the
consent of the renter, even if this is payment only partially
covering the renter's debts, that this payment will satisfy all
monetary claims against the renter. Are you concerned that this
provision specifically will deter landlords from seeking out
emergency rental assistance, should that provision be enacted?
Mr. Winn. Yes, it is a subset of the provision, yes, is a
requirement to write off partial balances if only partial funds
are received. I do believe that is a disincentive.
And I don't know that it is necessary. I believe a bill
could create other incentives to stably house folks that don't
entertain these funds, that don't require write-off of past-due
debts. There can be requirements to accept rental assistance
program funds as an example in the future.
That might be a better way to incent landlords to do it
than to say, ``If you accept our money, you are writing off a
30-percent loss.'' I am worried how that will affect the
outroll.
Mr. Gonzalez of Ohio. Thank you. I share that concern. And
before I yield back, it just seems like we have a poorly-
designed program. I think that is very obvious, given the
bottlenecks, again, 6.8 percent of money distributed in my home
State of Ohio. It's a very poorly-designed program, and then we
have a bad idea to fix a poorly-designed program.
So, I oppose that bad idea, I support Mr. McHenry's
legislation, and with that, I yield back.
Chairwoman Waters. Don't forget, we had to correct the
problems with PPP also. The big banks created their own portals
and took care of their concierge clients. We had to put more
money in it to straighten it out. It was not a perfect program.
We made it work, as we are going to make this work.
Mr. Gonzalez of Ohio. That is what I said. I did say it
wasn't perfect, but the money got out.
Chairwoman Waters. Ms. Dean is now recognized for 5
minutes.
Ms. Dean. Thank you, Madam Chairwoman. Thank you for
convening this important hearing and for being focused on
solutions and success in making sure we protect people from
evictions. And I say that with a special twist this week,
because in my area of Montgomery County, Pennsylvania, we were
shockingly hit by Hurricane Ida, associated tornadoes, and
devastating losses to housing, to tenants and their tenancies,
to landlords, to homeowners, and to businesses small, medium,
and large.
We had Biblical-level flooding in my district, and
tornadoes that we have never, ever, ever seen, losing a lot of
our housing stock. So I offer that as a backdrop to say, we
have to find a solution.
I wanted to start with you, Mr. Morris, and I know you have
been talked with a lot, but with good reason. I am from
suburban Philadelphia, so I have heard about your program, and
I am thrilled with its level of success. It is always good to
have a Philadelphia presence on our panels.
I read your testimony and learned more of the details of
the Eviction Diversion Program and Emergency Rental Assistance
Program in Philadelphia. I was hoping you could offer us a
little bit more granular details as to the success:
specifically, how many tenants have participated; how many
landlords have participated; and in what proportion of cases
did mediation result in a good outcome or some agreement?
Your high percentage of being able to deliver relief is
just to be commended. So, can you offer us a little more
specifics on that, so that we might learn from it?
Mr. Morris. Sure. I can try my best to offer you specifics
with the data that we have. I can tell you so far, across all
phases, we have spent $165 million in rental assistance dollars
that have gotten out the door.
In phase 4 alone, there have been about 13,454 households
who have been assisted. So far, I think there are 50,000
applications that are still pending, due to a resource limit,
and also, just that the time to process the applications is not
there.
And we are working as hard as we can. We have spent 86
percent of the money that has been allocated to us across all
phases of the Emergency Rental Assistance Program. So, we are
spending the money.
And in terms of the average amount of assistance that is
being paid out, we are paying out 8 months on average to
households. The utility assistance we are paying is about 4
months on average to households that have applied.
I don't specifically have the number of landlords and
tenants that have applied separately because we track them as
households. The way our system is designed, there is a portal
by which a landlord can go in and pre-register, and some have
been registered since April when Phase 4 actually opened in
Philadelphia, and then a tenant can apply with their
applications and those applications are synced on the back end
and processed as one.
So for every household, I would not consider that a
landlord in and of itself, because landlords do own several
properties. But we measure them by households that have
applied, and there are about 50,000, as I said, that are still
outstanding, and we just don't, right now, have the financial
resources to help all 50,000 of those, because we have spent 86
percent of our funding thus far.
But in terms of demographic data, I can provide that over
74 percent of the households that we have helped have been
below 30 percent of the area median income. So, those are very
poor households that would otherwise not have any funds left
over to help them deal with any sort of crisis. Never mind an
ongoing COVID pandemic; they wouldn't have $500 to pay on a
bill that they are not expecting. So, we are helping the most
vulnerable. And our clients are also predominantly female; over
66 percent of the applicants have been female.
Ms. Dean. I wanted to ask you very quickly, how did you
spread the word? And then, I want to get one more question in
if I have the chance.
Mr. Morris. We had an existing network of housing councils
from the 2008 housing crisis. The City has also done a lot of
advocacy around the program. And we have tenant advocates who
have been on the ground working, and as someone contacts us
about an eviction or has an instability, we provide information
that rental assistance is available, and the courts have also
cooperated with us in that process.
Ms. Dean. Thank you. Thank you for that extraordinary
success, and I hope we send you the resources you need.
Mr. Schwartz, I just have a little bit of time left, but
from the landlord perspective--because our committee and our
Congress is always concerned with tenants and landlords, what
successful outreach have you participated in?
Mr. Schwartz. Outreach as far as promoting the programs,
the ERAP program?
Ms. Dean. Exactly.
Mr. Schwartz. Yes. In our communities, we make all of our
residents aware of rental assistance. Even before the pandemic,
if anyone had trouble paying rent, we connected them with local
charities or other programs. So nothing has changed.
With the ERAP program, as I mentioned earlier, this has
been an all-hands effort to help our residents.
Chairwoman Waters. The gentlewoman's time has expired. I am
so sorry, but we have to move on.
Ms. Dean. Thank you.
Chairwoman Waters. The gentleman from Wisconsin, Mr. Steil,
is recognized for 5 minutes.
Mr. Steil. Thank you very much, Madam Chairwoman. I would
like to dive in and follow up from right where my colleague,
Mr. Gonzalez from Ohio, left off. Mr. Schwartz, I would like to
ask you about the impact of landlords being forced to take a
haircut. Maybe on the surface, it sounds like that might be a
productive thing, it is anything to help renters, but I think
in--not in a static model but in a dynamic model, where are
those costs going to go?
And, so, I would love your insight, in particular, if you
think that there are going to be landlords across the country
that are going to take those losses in one place, and then
reach out to other renters in their pool, and try to recoup
those costs, and what the impact would be on other renters who
were not the beneficiary where the landlord took a haircut?
Could you just start there? And then I have a follow-up
question to that, if you would, Mr. Schwartz.
Mr. Schwartz. Yes. One thing I mentioned is, we have rental
inflation going on now that we probably all have read about,
and one of the contributors is kind of the costs associated to
the industry with moratoriums and haircuts, as you suggest.
In California, when ERAP first came out, there was a
blanket 20-percent haircut to the landlords by the State, and
thankfully, that was changed, because the flow of funds from
ERAP was going very slowly because of that haircut.
Mr. Steil. So you are seeing the causation of some of these
increases being--well, you take a haircut on the left, but
ultimately you are raising prices on the right. Does that
uniquely impact low- or moderate-income renters?
Mr. Schwartz. I believe it does. Low- and moderate-income
renters have a higher percentage of their income going to rent,
and the rent--
Mr. Steil. Okay. Trying to move quickly, I appreciate your
insight on that. Let me shift over to you, Mr. Winn, if I can.
In southeast Wisconsin, we have a lot of really small
landlords. I lived in a duplex before I bought the house that I
am in today. I was a renter there.
Often, it's the case here in southeast Wisconsin that you
will have somebody who owns a duplex where they live in one
side of the duplex, and they have a tenant in the other. That
is how they are covering their mortgage.
Could you provide some insight as to how these policies
have different impacts between the really big landlords that
are out there versus these true mom-and-pops? I can't tell you
how many landlords in a technical sense, but often they think
of themselves as just a homeowner--they own a duplex, they are
trying to rent out the other side--have been negatively
impacted either by the eviction moratorium, or the ability to
obtain funds and what the impact is, in particular, on some of
these smaller families who are just trying to build some equity
for themselves, of this policy would be, Mr. Winn?
Mr. Winn. Yes. In Congressman Lynch's district, we call
them triple deckers. So, yes, I understand what you are saying.
No, the impact has to be severe. I think at this moment, we
know the statistics are that 10 to 20 percent of the funds have
reached their intended recipients.
For a small landlord who has four or five units, or one or
two, that is the real estate tax bill, that is the mortgage
payment. That is it. So, we know that they don't have any
wiggle room. They don't have any ability to go get a line of
credit to cover these gaps.
So, urgency is just as important as the actual amount of
money for those small landlords. I think the committee is doing
the right thing. We are here talking about it. We are here
seeing how we can get the money out. But I can only imagine the
hardships that small landlords are going through.
Mr. Steil. I can't tell you how many of them have called my
office, frustrated with the policies put in place by
Washington, frustrated with how poorly-run and operated this
has been in getting the funds out.
There are a lot of people who are looking at their home's
mortgage. If you own a duplex, your home is on the line when
the other half of that duplex is truly paying zero rent, and
you have no ability for recourse. It is a really serious
problem, and I appreciate you providing those insights, Mr.
Winn.
With that, Madam Chairwoman, I will yield back.
Chairwoman Waters. Thank you very much. The gentlewoman
from North Carolina, Ms. Adams, is now recognized for 5
minutes.
Ms. Adams. Thank you, Madam Chairwoman, and I appreciate
the opportunity to share with you today. Ms. Yentel, Mr.
Schwartz, thank you both for being here.
During today's hearing, we have heard plenty about
provisions in our legislation that allow landlords to directly
apply for back rent. Specifically, we have heard about
landlords' hesitancy regarding the requirement that accepting
ERA funds would mandate them to house for an additional 120
days.
I think it is absolutely critical, though, that we tackle
that hesitancy, and I want to talk just a moment about a
solution that my local nonprofit is employing with a great deal
of success.
I represent Charlotte, North Carolina. Ramp CLT, as we call
it, is, beyond any doubt, one of the most effective ERA
administrators in the nation, serving the entirety of the City
of Charlotte and Mecklenburg County in North Carolina.
They have been accepting self-attestations since the early
days of the pandemic, and they work mostly with our County, our
City, and other nonprofits to distribute ERA funds rapidly and
accurately and critically. And in addition to any arrears they
award, they also provide an additional 3 months of funding to
ensure that tenants will remain stably housed.
Now, those additional funds immediately help landlords and
tenants come to the table, and have made Ramp CLT one of the
most effective distributors of ERA dollars in my State.
So, Ms. Yentel first, and then Mr. Schwartz, as a way to
help bring reluctant stakeholders to the table, do you believe
that ERA administrators should consider automatically providing
several future months of rent along with any arrears?
Ms. Yentel. Yes. Thank you for the question, but first, I
think it is important just to clarify, as you did, that the
prohibition on eviction for a short period of time is only for
landlords who receive funds without any tenant involvement.
That is a very important protection against fraud, against
potential tenant harassment, against housing stability of
tenants.
I agree that the program that you named is a very strong
program, and has been from the very beginning. They were very
early to get started in spending with their ERA program. They
set up a program that was very accessible for low-income
tenants and for landlords, and they have been doing a great job
in getting the money out.
I think the solution that they came up with is a good,
creative one that can be helpful in many cases. Certainly, it
provides additional housing stability for those low-income
renters, and it provides assurances for the landlords that
those months of rent will be paid.
So, I think it is a good solution that should be
considered. The only caution I would make is that in some
communities, they would need to first be sure that they have
enough ERA to cover the arrears of all of the tenants in need
before making this future 3-month rent payment automatic for
all applicants.
But I certainly think that in some cases, and in cases
where the tenant needs that additional assistance, I think that
is a very good component to a successful program.
Ms. Adams. Thank you.
Mr. Schwartz?
Mr. Schwartz. Yes. I agree with Diane. I think you need to
make sure you have enough money to pay the arrearages and what
has been owed before committing to go forward.
I think it would work on a voluntary basis. I think
legislating it would, again, create this effect of reducing
participation in the program that we don't want to happen, but
I do think landlords would take advantage of it on a voluntary
basis.
Ms. Adams. Okay.
Ms. Salazar, I want to just speak for just a moment about
COVID-19's impact on women of color. In my conversations with
the Ramp CLT administrator, I was disturbed to hear that the
highest number of ERA applications were coming from African-
American women between the ages of 20 and 35, who had at least
one child.
So, how can Congress ensure that the outcomes of the
Emergency Rental Assistance Program do not exacerbate existing
racial inequities in housing?
Ms. Salazar. Thank you so much, Ms. Adams. It is such a
critical issue. We knew from the start that this pandemic would
have a disproportionate impact on Black, Indigenous, and People
of Color (BIPOC) communities, communities of color, and we are
seeing that play out, of course.
In our program here in the State of Oregon, we have
contracted with the local community-based organizations to do
outreach specifically in communities of color, with translated
materials, to get the trusted relationship with community-based
organizations to help folks apply for rental assistance. So,
that outreach is critical.
And the other piece that we are employing in our State is--
Ms. Adams. I think I am out of time.
Ms. Salazar. --priority within the queue. So, I would say
that there are some reforms in the proposed legislation that we
are talking about today--
Ms. Adams. Thank you very much.
Ms. Salazar. --to increase that technical assistance--
Ms. Adams. Madam Chairwoman, I am yielding back. Okay,
thank you.
Chairwoman Waters. The gentlewoman's time has expired.
Thank you.
The gentleman from Texas, Mr. Taylor, is now recognized for
5 minutes,
Mr. Taylor. Thank you, Madam Chairwoman. I appreciate this
hearing. I will comment that it is clear to me from all of our
colleagues, the importance of trying to get this program to
work properly and the frustration with it. And I certainly
appreciate the bipartisan consensus that this needs to work
well.
What I have to admit I am frustrated with is, where is the
Administration? They have been trying to operate this program
for months and months and months, and they are not here. They
are not providing the suggestions.
I know, Madam Chairwoman, that you are very passionate
about protecting renters, advocating for essentially the
eviction moratorium. The President, only at the very last
minute, advocated for it and then ultimately tried to do it by
rule. And we knew that was unconstitutional, knew that it was
illegal. It was struck down in court.
He could have been here, ``here,'' meaning in this
building, in Congress, advocating for change months and months
ago, but he hasn't been. And so here we are, here you are,
Madam Chairwoman, working to try to address this and, ``clean
up the mess.''
And so, I wanted to just say that one thing that is
concerning to me in this legislation is the idea of self-
attestation. I know that nobody here wants to see limited
government resources, limited taxpayer resources wasted,
squandered, used in a way that is fraudulent. And I think that
I speak for all of us when I say that none of us want to see
that.
I am concerned that self-attestation opens the door for
fraud. And so, I really hope that we would revisit that. I know
we want to go expeditiously, and I certainly concur with that
general sentiment of, let's move quickly, let's make sure we
get these dollars out.
And I think that you have heard Republicans and Democrats
talk about the slowness of the process in terms of getting the
dollars out. And that is why we are here, we are here to talk
about why it is slow, and how can we improve it.
I think it is a little late to be having this discussion.
We should have been having this discussion months and months
ago. But nevertheless, here we are today.
Ms. Salazar, a question for you, you indicated earlier, a
few hours ago I think, that you had participated, or been
consulted about the drafting of the legislation in front of us
today. Did I hear you correctly?
Ms. Salazar. Thank you so much, sir. Yes. The National
Council of State Housing Agencies (NCSHA) has been engaged in
these dialogues around the legislation.
Mr. Taylor. And was that consultation by the Legislative
Branch or the Executive Branch?
Ms. Salazar. It was the Legislative Branch.
Mr. Taylor. Okay. So, has the Department of Housing and
Urban Development or the Secretary of the Treasury reached out
to you? Has there been any effort by the Executive Branch to
try to reach out to you to ask about the implementation of this
program?
Ms. Salazar. Certainly, Representative. We have had
dialogues with officials at the U.S. Treasury. They have been
helpful dialogues. NCSHA proposed, for example, the bulk
payment process to get bulk payments out to landlords, and the
Administration was receptive.
I think where we stand at this point is that the guidance
from Treasury has been helpful, but we need those statutory
changes to really codify the reforms necessary to be able to
expedite the program. Sox, really building on some of the early
dialogues we have had with Treasury.
I will just say one other piece is that we are in dire need
of guidance from Treasury around how they will approach the
reallocation issue. We are rapidly coming up on September 30th.
Programs like ours in Oregon are pulling out all the stops
to expedite payments getting out the door, and we need to
understand clearly from Treasury that they will take into
account things like the strong demand for the program on the
ground, and the efforts that States like ours are making to
expedite payment.
That is one area where we have not received the guidance
that we need.
Mr. Taylor. Sure. Are you testifying here today that you
are still waiting for guidance from the Administration in order
to implement these programs?
Ms. Salazar. I would say, in some regard, the guidance has
been forthcoming. For example, the recent guidance to--
Mr. Taylor. But I think you just said you are waiting for
guidance--is that right, you are waiting for guidance?
Ms. Salazar. We are waiting for guidance, sir, specifically
on the issue of how Treasury will address the September 30th--
Mr. Taylor. Again, I guess I will just express frustration,
individually, and I think I speak for my colleagues--I am
really frustrated that the Administration isn't really coming
to the table, isn't really offering legislative solutions,
isn't really leading on this.
I am glad to see the chairwoman and the ranking member
working, in slightly different contexts, but trying to come up
with solutions. And I really think that the Executive Branch
needs to be part of this and part of these discussions.
Madam Chairwoman, I yield back.
Chairwoman Waters. Thank you very much. And we are all
working toward finalizing some of these issues and concerns. I
am working with the Treasury, working with the Administration,
and offering to work with the ranking member. So thank you very
much.
Next, we will hear from the gentlewoman from New York, Ms.
Ocasio-Cortez. You are now recognized for 5 minutes.
Ms. Ocasio-Cortez. Thank you so much, Madam Chairwoman, for
hosting this hearing, and as Representative Dean had mentioned
earlier, we just experienced devastating floods for which my
district was ground zero, in New York City, for the floods from
Hurricane Ida.
And this has been a travesty in my district. We have lost
12 people in these floods, and the connection here is that in
almost every person lost to the floods, it was related to our
housing crisis. The lack of available housing stock and the
fear of eviction existed even prior to the pandemic, and the
pandemic has only made it worse, to the point that people are
seeking alternatives to the housing stock that are often
dangerous.
Now, that being said, speaking about those long-standing
inequities, many low-income renters struggled to make ends meet
even before the pandemic. And with the lapsing of unemployment,
the striking of the eviction moratorium, all of these things
have placed renters in an even more perilous position.
We have discussed some of the difficulties, and the
committee has addressed some of the difficulties in State
implementation. But I also want to talk a little bit about the
difficulties in getting these funds out with the segment of
landlords who are refusing to participate in emergency rental
assistance.
Ms. Yentel, is there evidence that lack of tenant
participation is a widespread problem for the Emergency Rental
Assistance Program?
Ms. Yentel. I have not seen any evidence or data to show
that there is a widespread problem of tenants not
participating.
Ms. Ocasio-Cortez. Okay.
Ms. Yentel. There is clear evidence of tenants not
completing applications, which points to inaccessible and
overly complicated applications that need to be simplified.
Ms. Ocasio-Cortez. Okay. I see. And would you say that in
relation to tenant participation, is lack of landlord
participation in the program more of a frequent problem that we
are noticing?
Ms. Yentel. We have seen evidence of this, yes. In a survey
that we and others did, about 44 percent of program
administrators said that landlords refusing to participate in
ERA programs was a challenge. And from some of the more recent
conversations, I would say that number has likely grown.
Ms. Ocasio-Cortez. So that means that when landlords refuse
to participate, some Emergency Rental Assistance Programs are
not required to provide assistance directly to tenants, and
they could face eviction or homelessness if their landlord
vetoes the application. Is that right?
Ms. Yentel. That is right. Unfortunately, it is optional
for program administrators to utilize direct-to-tenant
assistance if landlords participate, and we are seeing that
only about 28 percent of all ERA programs are explicitly
allowing direct-to-tenant assistance. That means there are many
tenants who are having their application closed, who are not
getting any of the assistance they need because the landlord
has refused to participate.
Ms. Ocasio-Cortez. And this is consistent with something I
have been seeing. If you are a tenant and you want to make
right on your back rent, and you apply for the Emergency Rental
Assistance Program, if your landlord has been trying to get you
out, they can refuse, in the majority of programs, to accept
your rental assistance and evict you and use that as grounds to
evict you. Is that correct?
Ms. Yentel. That is correct, and we are seeing some very
egregious cases of tenants showing up in eviction court with
the emergency rental assistance in their hands, and the
landlord saying, I don't want it, and the judge allowing the
eviction to move forward.
Ms. Ocasio-Cortez. It seems as though we have a very urgent
issue, and I am so thankful to see Chairwoman Waters address
these issues.
Now, my last question is, what types of enforcement
mechanisms should we be exploring to ensure that the tenant
protections in this bill are adhered to by landlords?
Ms. Yentel. That is a really important point, and we
strongly recommend that the legislation be very clear in
identifying a Federal agency, the DOJ or the CFPB, and give
them clear authority and responsibility to ensure that the
tenant protections in this legislation are followed and adhered
to.
Ms. Ocasio-Cortez. Thank you so very much.
Ms. Yentel. Thank you.
Mr. Schwartz. I would like to just chime in on this topic,
because I am a landlord, so I can give you some reasons we have
seen landlords not want to participate. In a State like New
York, there are conditions imposed by participating, like rent
freezes, not being able to charge late fees, and extended
protracted moratoriums. That makes it hard for the landlords to
participate with all of those conditions.
Chairwoman Waters. Thank you. The gentlelady's time has
expired.
The gentleman from Georgia, Mr. Loudermilk, is now
recognized for 5 minutes.
Mr. Loudermilk. Thank you, Madam Chairwoman.
First, I would like to recall how we arrived at this point.
First, the CDC established an eviction moratorium despite
having no statutory authority to do so. Then, after Congress
established a bipartisan rental assistance program in December,
Democrats created an entirely new partisan program with a
conflicting set of rules.
Because of that incompetent law-making or policy-making,
the funds are now stuck in an administrative mess, and only a
fraction, a small fraction has been distributed.
When HUD Secretary Marcia Fudge testified before this
committee 2 months ago, she said if we get the rental
assistance programs to actually work, then there is no need for
an eviction moratorium. But instead of focusing on getting the
rental assistance program to work, Democrats tried to pass
legislation to extend the eviction moratorium.
When that failed, the President then directed the CDC to
extend the eviction moratorium, which he knew was
unconstitutional, and the Supreme Court struck it down.
The HUD Secretary also said that streamlining the rental
assistance program would help get the funds out more quickly,
and unlike the Members of the Majority who are just now turning
their attention to this, Republicans proposed a bill to fix the
rental assistance program 3 months ago.
There are more than 10 million jobs available right now,
more than at any other time in the history of this country.
There are more open jobs than there are unemployed people, but
instead of focusing on getting people back into the workforce,
the Majority now wants to remove any requirement for renters to
have a hardship in order to receive rental assistance, and make
taxpayer-funded rent a long-term entitlement regardless of
whether people actually need it.
Mr. Winn, one of the items in the Majority's bill is that
it would require landlords who apply for rental assistance on a
tenant's behalf to accept any amount they receive as satisfying
the entire rent debt, even if the amount they receive is
thousands of dollars short of what is owed. Does that provide
any incentive to the landlords to apply for these funds?
Mr. Winn. Thank you for the question. And I would answer
that in two ways. One is, I think we would appreciate more
clarity on what the proposal actually says, because read in its
worst way, it could be true that by accepting $3,000 in rental
assistance, you could be foregoing $6,000. And that doesn't
help anybody.
So, I think it would be very important to clarify what
those rules are, and frankly, don't make them so burdensome
that landlords can't participate.
Mr. Loudermilk. I appreciate that.
Also, the government is the reason why so many property
owners have been unable to collect rent and evict non-paying
tenants. Should the government make landlords whole by allowing
the rental assistance funds to reimburse property owners even
if the renter has moved? That is for Mr. Winn.
Mr. Winn. Yes. I think--and I mentioned this earlier--that
is a critical aspect of this. And it is only going to happen
more as we go through the pandemic. There are going to be
tenants who see insurmountable balances of rent delinquency,
and just say, I have to move. And so it is almost an effective
eviction, but it is somebody deciding to move, and unless the
program explicitly allows rent on those vacant units, the
landlords are the only ones left holding the bag. So the
proposal really should, and I hope does, address that.
Mr. Loudermilk. Okay. Thank you.
Mr. Schwartz, do you agree that consolidating the two
Emergency Rental Assistance Programs under the ERA 1 program
rules would get the funds out more quickly?
Mr. Schwartz. I agree with respect to focusing on
arrearages, arrearages with respect to vacant units like you
just spoke about, and occupied units, and by consolidating
them, because ERAP 1 did prioritize arrearages, and we think
that is very important.
Mr. Loudermilk. Okay.
Madam Chairwoman, I have no other questions, so I will
yield back. Thank you.
Chairwoman Waters. Thank you very much.
The gentleman from Illinois, Mr. Garcia, is now recognized
for 5 minutes.
Mr. Garcia of Illinois. Thank you, Madam Chairwoman, and
thank you for your leadership on this issue. Good afternoon to
all of our panelists.
The majority of the constituents I represent are renters,
so this issue is very personal to me. Millions of people across
the country lost their homes after the last financial crisis 10
years ago, but working-class communities like mine never
recovered. Families got evicted and priced out. In Chicago,
this is a racial-justice issue.
The Logan Square neighborhood in my district lost over
10,000 Black families and 20,000 Latino families in the last
decade. I can't stand by and let this happen again, and that is
why I fought for an eviction moratorium, and why I fought for
emergency rental assistance, and now, I am fighting to make
sure that the program works for neighborhoods like those in my
district.
The whole point of rental assistance is to keep people in
their homes, and it is our job to make sure that happens. So, I
want to thank the chairwoman and the ranking member for
convening this important hearing, and say thanks to all of our
witnesses today.
I do want to direct a couple of questions to Ms. Yentel.
You talked about the importance of tenant protections in the
Rental Assistance Program. I know firsthand how landlords have
a lot of different tools to get rid of tenants they don't want.
Filing an eviction in court is only one of them.
Can you briefly talk about how landlords might get rid of
tenants without formally evicting them, and is this common?
Ms. Yentel. Yes. And it is important to recognize too that
there are multiple reasons why landlords might refuse to
participate in programs, and we have heard that concessions
required of them is one.
Another reason why we are seeing some landlords not wanting
to participate is because they are in hot rental markets and
there is a financial benefit to actually evicting the current
tenant, increasing rents, and making more money in the long
run. There is also a challenge of landlords who have unlicensed
or otherwise illegal units who can't access the emergency
rental assistance funds.
We do see during the pandemic and at other times as well,
unfortunately, ways that landlords harass or push out tenants.
It is not a formal eviction filing and it is illegal in most
places, but they might put a lock on the door and just not let
the tenant back in; they might turn off utilities, turn off
water, and force that tenant out; or, in less explicit ways,
they use harassment to push that tenant out.
It is part of the reason why it is so essential that these
protections be included if ERA is given directly to landlords
without any tenant involvement. It is certainly not all
landlords who will act this way, but we have to prevent
creating perverse incentives for landlords to potentially
harass tenants, to push them out, receive the emergency rental
assistance, without having to agree to any of these other
requirements that we are hearing are considered so onerous for
landlords.
Mr. Garcia of Illinois. Thank you for that. And I have a
follow-up question. How can Congress improve the rental
assistance program to prevent landlords from unreasonably
getting rid of tenants and claiming funds anyway?
Ms. Yentel. Again, in most cases, landlords and tenants are
applying for assistance together, and the landlord gets paid
for the arrears that are owed to them. In those cases, there
are ways the programs need to be improved; they need to be
simplified; there needs to be self-attestation used; they need
to do outreach to get that money out faster.
In cases where the committee considers allowing landlords
to receive assistance without involvement of the tenant, there
have to be strong protections in place for that tenant to
remain stably housed. And many of those protections are
included in the chairwoman's legislation--protections against
eviction immediately after receiving the funds, protections
against going back and claiming more funds from the tenant in
the future--and are really important protections to ensure that
we are not increasing tenant harassment or housing instability.
Mr. Garcia of Illinois. Great. Thank you very much.
Madam Chairwoman, I yield back.
Chairwoman Waters. The gentleman from South Carolina, Mr.
Timmons, is now recognized for 5 minutes.
Mr. Timmons. Thank you, Madam Chairwoman.
We all voted for the CARES Act back in March of 2020. That
legislation, of course, included an eviction moratorium which
would last until July 24, 2020. I think that most people
thought that was reasonable. It was the right thing to do. We
needed to help people who needed help. But I don't think anyone
on this committee would have anticipated or supported such a
moratorium going on for another year, but that is exactly what
happened, and even that wasn't long enough for some people.
I also think it is fair to say that, at that time, most of
us serving on this committee truly believed that renters who
are economically disadvantaged because of economic lockdowns
often imposed by State and local governments should not have
been evicted from their homes. That is just straightforward
common sense.
But so much has changed between then and now, primarily the
development and distribution of safe and effective COVID
vaccines for anyone who wants one. This allowed the economy to
largely reopen over the spring and summer months of 2021,
making jobs available literally almost everywhere. There are
10.9 million jobs available in this country today.
I talk to employers of all different sizes and industries,
and a common refrain is always, we need more people. We need
more people working. Jobs are available, and thanks to the
vaccine, it is safe to return to the workplace.
On top of this, as we all know, Congress has shelled out
close to $50 billion in rental assistance funds to help renters
cover back rent they may owe. These two developments, vaccines
allowing for the economy to reopen and the Emergency Rental
Assistance Program, made an eviction moratorium completely
unnecessary many months ago.
If the last few months have taught us anything, it is that
the current Administration is completely incapable of putting a
plan in place and executing it, with the primary examples being
the disastrous Afghanistan debacle, and this emergency rental
program.
We have also learned that President Biden has zero qualms
about abusing his power. I think at the other end of
Pennsylvania Avenue, we have forgotten that in our system of
government, Congress writes the laws and the President executes
them. He doesn't get to just do whatever he wants or gets
pressured into doing when people camp out on the Capitol steps.
The Supreme Court has already knocked down this illegal
moratorium extension, and will surely do the same for the
vaccine mandates we saw last night.
What is sad is that this was all avoidable. A competent
White House would have had ERAP up and running, and been
working with State and local governments to distribute dollars
in a productive way that would have made the eviction
moratorium debate a moot debate.
I know everyone on this committee wants to help people in
this country who need help, but we need to be thoughtful in the
manner in which we deliver that help, and make sure that it is
not counterproductive.
One of the biggest problems we have had implementing any
new program, particularly ones that are quickly stood up and
quickly send money out the door, is with making sure that only
the intended eligible recipients get funds, and fraudsters get
locked out.
I think that we need to really be careful that we are not
going to do more harm than good. We have to get back to work.
We have almost 11 million jobs available, and the only way that
we are going to get out of this--the only way we are going to
get our economy back on track is by getting back to work.
Mr. Winn, I know hindsight is 2020, and it is easy to be a
Monday morning quarterback, but looking back over the last 18
months, if you knew all this was coming, what is the one step
you wish we could have taken to weather the storm that was/is
COVID, and why?
Mr. Winn. I would say--I feel like I am repeating myself so
I apologize, but I do believe it would be the informed consent
model for tenants rather than the wet signature. I do believe
that would have doubled the amount of resources we could have
given to tenants on that basis.
Mr. Timmons. Thank you. I just want to remind everybody
that we have $30 trillion in debt and we are talking about
spending trillions and trillions of dollars we don't have. Our
kids, our grandkids, and our great grandkids are going to have
to pay this money back. It is not just funny money.
We have to get serious and we have to help people who need
help, but we have to get our economy back open and get people
back to work, because that is the only way that we are going to
be able to help the people who need help the most.
And, with that, Madam Chairwoman, I yield back. Thank you.
Chairwoman Waters. Thank you very much.
The gentlewoman from Texas, Ms. Garcia, is now recognized
for 5 minutes.
Ms. Garcia of Texas. Thank you, Madam Chairwoman. And thank
you once again for your leadership on this issue and for
prioritizing this very important piece of legislation that will
help many constituents in my district and all across America
stay housed this winter.
During the pandemic, our county has faced unimaginable
challenges. In Houston, many families were still trying to
recover from Hurricane Harvey when COVID hit. As of now,
hundreds and thousands of Houstonians are behind on their rent,
and since April 2020, Harris County landlords have filed almost
34,000 cases for eviction--34,000 just here in Harris County.
With our dollars that we have received through the ERA 1,
as page 10 of Ms. Yentel's paper suggests, Harris County is at
81.9 percent, almost 90 percent of the dollars. I understand
anecdotally that the dollars are gone, and I can tell you that
if there is any city or State or county that has extra dollars,
we will take them, because the need is great in Houston and
Harris County. We must also make sure that all of the measures
that we are taking here do not adversely impact on any renter's
ability to apply for any of these funds.
My first question is for Ms. Yentel. Ms. Yentel, in your
testimony, you highlighted that among those behind on their
rent, 31 percent of the households were forced to use debt
instruments such as credit cards to make ends meet. And last
month, the New York Fed reported that household debt is at an
historic high of almost $15 trillion, that is, ``trillion,''
with a ``T,'' marking the largest nominal household debt
increase since 2007.
This, of course, concerns me because some people did pay
their rent, they just put it on their credit card, and now they
are stuck with credit card debt. So what can we do to make sure
that we aren't forcing people to take on more risk than they
are ready for? And could you elaborate on any of the ripple
effects that any of these financial hardships due to housing--
what that does to consumers and the economy in general?
Ms. Yentel. Yes, and it is one of, I would say, the very
unfortunate consequences of Congress having delayed action on
finalizing emergency rental assistance for so long. As you
know, in the House of Representatives, emergency rental
assistance was passed 3 times, in May, June, and July. If the
emergency rental assistance had been enacted in that time, it
could have been used as it was designed, which was to keep low-
income renters current on their rent, to help them pay the rent
during the pandemic and not fall behind.
The legislation was held up in the Senate under Republican
leadership, and it wasn't enacted until December of 2020. By
then, tenants had accrued an estimated $50 billion in rent
arrears, and it became a different need that the program was
trying to serve, which was to help pay those rent arrears. So,
that is one of the more unfortunate outcomes of how long it
took for Congress ultimately to enact this.
As you said, in the meantime, most tenants did everything
they could to stay current on their rent during the pandemic.
And some of them had to make tradeoffs in not buying store-
bought food or paying for internet, despite their children
needing it for virtual school, and many of them took out loans
or used credit cards to pay for the rent.
The data is very clear that there was an increase in the
number of tenants using credit cards to pay the rent, and, in
fact, many landlords were in communication with tenants,
encouraging that to keep the rent payments current.
It is unfortunate now that many of those tenants hold that
debt but are not able to be paid back through the Emergency
Rental Assistance Program for the debt that they owe. And I
would encourage the committee to consider ways to enable
tenants who can prove that they used credit cards or otherwise
took out loans to stay current on their rent, to access
emergency rental assistance to make them whole as well.
Ms. Garcia of Texas. Thank you.
And quickly, Mr. Morris, I had a question for you about
translation services and interpreters. I think it was you who
testified that some of the delay and some of the concerns from
the renter side is not having the forms and the information,
the outreach information in the language of their own. Is this
a problem nationwide that we also need to address?
Mr. Morris. I believe this is a nationwide problem, and all
of our applications in Philadelphia are available in several
languages based on demographics for the populations.
Ms. Garcia of Texas. But should this be a mandate in the
bill itself? Because obviously--
Mr. Morris. It should.
Ms. Garcia of Texas. --we are hearing that in some cities,
in some programs, that is not the case. So, the only way that
we can make it uniform and that we make the program accessible
to everyone would be to put it in the bill. Would you agree?
Mr. Morris. I agree. Even if the bill itself has not
changed, there should be a person who can interpret on behalf
of someone in a different language available.
Chairwoman Waters. The gentlelady's time has expired.
Ms. Garcia of Texas. Thank you, and I yield back. Thank
you, Madam Chairwoman.
Chairwoman Waters. Thank you.
The gentlewoman from Georgia, Ms. Williams, is now
recognized for 5 minutes.
Ms. Williams of Georgia. Thank you, Madam Chairwoman, and
thank you for holding this hearing today.
Too many renters, through no fault of their own, have
fallen behind on rent payments during this pandemic due to
economic hardship, forcing people on the streets during a
pandemic that is still raging, and I have seen it firsthand.
Back in early June, when a local eviction moratorium
expired, I posted pictures on social media from my district
where people's belongings had been tossed out on the street,
and this was with the CDC eviction moratorium still in effect.
That is because people didn't know how to access the actual
moratorium, let alone the rental assistance associated.
Those pictures were a stark reminder that we must keep
working to find a Federal solution to keep people in their
homes. I knew that we had to pull every lever to protect
tenants from eviction and give them a leg up in recovering from
this pandemic.
For one, the CDC eviction moratorium protected countless
families, which is why I was quick to cosponsor Chairwoman
Waters' bill to extend it through the end of the year.
Unfortunately, some Members of Congress stood in the way of
this extension despite the tireless work of Chairwoman Waters,
Speaker Pelosi, and so many other Members of Congress working
to protect our constituents.
However, like Chairwoman Waters, I knew that we couldn't
stop fighting. We still have to address the fundamental problem
of getting folks out of rental debt. The key is efficiently
distributing the rental assistance already provided by
Congress, which has gone out too slowly in many localities.
This week, I was proud to join Chairwoman Waters, and co-
sponsor the introduction of the Expediting Assistance to
Renters and Landlords Act, which will make the rental
assistance Congress approved go out more efficiently. And
today, I am glad to talk more about how we get rental
assistance to the people.
Ms. Yentel, in your testimony, you noted that my home
county of Fulton County, Georgia, has distributed 76 percent of
the ERA 1 funds that were allotted; however, the rate is not
that high in every county nearby. In fact, you noted that
Georgia as a whole has only distributed 3.6 percent of its
funds.
If enacted, to what extent will the Expediting Assistance
to Renters and Landlords Act help to reduce distribution
disparities in places like my home State of Georgia? And in
addition to pushing for passage of this legislation, what
should Members of Congress be doing to help more localities get
assistance out the door more quickly to people in need?
Ms. Yentel. Thank you. The legislation that Chairwoman
Waters has introduced and that you cosponsored would speed up
the assistance of emergency rental assistance in several ways,
and it would build on lessons learned and best practices during
the pandemic.
We have learned by now very clearly what makes some
programs so successful and what makes some programs much less
so. Some of the reforms that are included in this legislation,
for example, would require that all programs use self-
attestation for all eligibility requirements. This would
drastically streamline applications, and speed up the delivery
of funds. It would also require that all programs utilize
direct-to-tenant assistance when landlords refuse to
participate, ensuring that tenants aren't penalized for their
landlord's lack of action.
It would redefine eligible grantees for emergency rental
assistance to go beyond State and local government entities to
include the community-based nonprofit organizations that are
doing the door-knocking and outreach to get tenants engaged in
the process.
It would prohibit the requirement of written leases, which
has also been a barrier for some landlords and for many of the
most marginalized tenants who have informal leases but still
owe rent to their landlords. So, there are a number of really
important changes and protections in the legislation, which we
support.
In terms of what more Members of Congress can do, I think
this legislation is a very good start, but I also think taking
the actions that you have taken in your community to help
improve and encourage improvement of these Emergency Rental
Assistance programs, the example that Chairwoman Waters gave of
the actions she has taken in Los Angeles, to connect legal aid
attorneys with the emergency rental assistance with the
landlords, this is really important leadership that all Members
of Congress could take that could help educate constituents
about the availability of resources and then help them to
access them.
Ms. Williams of Georgia. Thank you, Ms. Yentel. And not
knowing what the future holds, do you think it would be useful
to study the implementation of the Emergency Rental Assistance
Program, including any changes to the program, to see how we
might improve other programs, going forward, across the
country?
Ms. Yentel. Absolutely, we should be constantly studying,
learning, and improving as we go for this and for any future
programs that are set forth.
Ms. Williams of Georgia. Thank you, Madam Chairwoman. My
time has expired, and I yield back.
Chairwoman Waters. Thank you.
The gentleman from West Virginia, Mr. Mooney, is now
recognized for 5 minutes.
Mr. Mooney. Thank you, Madam Chairwoman.
We understand that last month, the White House essentially
caved to political pressure from the left and unilaterally
extended the eviction moratorium, even though they knew it was
unconstitutional for President Biden to assume this power to
himself, the power that is rightly placed in the legislature,
the Congress.
After the court struck down the moratorium and once again
told the White House that it was unconstitutional, Democrats in
committee here, in Congress, finally decided to propose changes
to the Emergency Rental Assistance Program. The Republicans had
already proposed changes to the Emergency Rental Assistance
Program months ago, well before the eviction moratorium
standoff took place.
Instead of going to the President to abuse his powers, we
should have worked with committee members on common-sense
reforms. Now, the Democrats are rushing to do a rental
assistance program through this process. We are scheduled to
mark up this bill on Monday of next week. And we are having a
hearing on the bill Friday, today, the week before.
Hearings are supposed to give us a chance to step back and
assess legislation well before they are marked up or make it to
the House Floor. But there are zero business days between our
hearing and this legislation and the scheduled markup vote.
That is unfortunate, because I think this bill has some very
significant problems.
I am concerned that the legislation could open up the
Emergency Rental Assistance Program to waste, fraud, and abuse.
One of the most irresponsible provisions in this bill, which
appears to be a completely one-sided partisan Democrat bill,
which we have seen too much of in this Congress, is it requires
self-attestation from a renter to be considered as proof of
eligibility for the program.
That means an applicant could self-report their income and
receive rental assistance from the United States taxpayers with
no documentation, and no verification. If someone simply tells
the government they are income eligible for the program, we
just take their word for it. This bill would say, take their
word for it and give them the hard-earned taxpayer dollars.
I was pleased that my colleague, Congressman Andy Barr of
Kentucky, mentioned earlier in his comments that we are talking
about the use of hard-earned taxpayer dollars here, not money
that grows on trees that the government just has; the
government doesn't have any money that they don't first take
from the United States taxpayers. It is their money we are
watching over here.
So, my question is directed to you, Mr. Winn and Mr.
Schwartz. When a potential resident begins the process of
moving into one of your units, can they self-attest their
income level or do you use some means of verifying their income
level?
Mr. Winn. I can answer that as it relates to governmental
programs that we help administer, like the Low-Income Housing
Tax Credit or Section 8. Yes, there has to be verified income
for those Federal programs. So by and large, we do have that
information in our own portfolio. For market-rate renters, for
renters who are not under those programs, we are not in the
business of verifying their income necessarily, so I just
wanted to point that out.
Mr. Mooney. Mr. Schwartz?
Mr. Schwartz. Yes, we do income verification for our
residents. I guess my only point with self-attestation is the
download of these forms, particularly for lower-income
residents, has been a big barrier to getting the emergency
renters assistance, and we do our best to help them, but self-
attestation would streamline the process. And I do think there
is a capability of the Federal Government to audit the self-
attestations through the tax returns and information the
government has and catch people who are committing fraud.
Mr. Mooney. Okay. Thank you for that.
A quick follow-up to both of you, if you were forced to
accept self-attestation as proof of income, would that cause
you to be concerned about the tenant's ability to pay rent?
Mr. Winn. I just want to say, I think that the issue that
we are encountering now as a country is not landlords getting
paid too much out of ERAP; it is landlords getting paid too
little. So, I do believe that if the attestation can help get
the money out--the flip side of that argument is that smaller
landlords are often unable to have the follow-up required to
verify incomes themselves, to make sure that the tax returns
are properly dated, to make sure that they have filed it
correctly. So, I do believe there is a need to simplify the
process.
And to your question of, would it put us in a position to
take somebody as a tenant that we otherwise wouldn't have, I
think the issue is that they are already there. They are
already in our units, and we can't find a way to get them ERAP.
Mr. Schwartz. Yes. And I would just follow up--I know you
are out of time--that we only verify once. We don't know after
the tenant moves in what their income is. They could be with us
for 10 years, and we wouldn't know.
Mr. Mooney. Okay. I don't know if I am out of time, but I
have a closing statement if I am not out of time. Thank you for
your comments.
I want to say, I think it would be irresponsible--
Chairwoman Waters. Thank you. The gentleman's time has long
expired.
The gentleman from Massachusetts, Mr. Auchincloss, is now
recognized for 5 minutes.
Mr. Auchincloss. Madam Chairwoman, thank you for the
opportunity to work on this bill.
I have heard a number of my colleagues on the other side of
the aisle talk about the unconstitutionality of President
Biden's actions. And while I appreciate that everyone in
Congress needs to be laser-focused on protecting the
Constitution and holding the Administration to account, I have
to say that these words would resonate more with me if we had
seen this same kind of attention on the Constitution in the
last 4 years, after the most egregious depredations of the
Constitution in the history of the United States, by President
Trump. So, I would encourage everybody in Congress of both
parties to continue to hold Presidents of both parties to
account for protecting and defending the Constitution.
I am also hearing a tremendous amount of frustration, again
from both sides, about the bureaucracy and the paperwork around
if it was grounded in good intentions and was really directed
towards an extreme need. And it has made me think a lot about
the Child Tax Credit.
And the connection here is that we have seen over and over
again empirically with Federal policy that when we directly
transfer money to working families, whether it is through the
Child Tax Credit or the Earned Income Tax Credit, they spend it
on what they need and they spend it on a better future for
their kids.
And so, the expansion of the Child Tax Credit and making
permanent the tremendous gain in childhood poverty reduction
that we will achieve in the American Rescue Plan and
reconciliation can be viewed not just as expanding and
improving social welfare, but also, in the long run, obviating
the need for some of these programs that I know my Republican
colleagues get frustrated with for sometimes being inefficient
or bureaucratic or increasing red tape. Just give money
directly to people [inaudible] Needs [inaudible] Without being
market distortions or even without creating a new level of
Federal bureaucracy. So, I would encourage you to think about
the Child Tax Credit in that lens.
I will pivot now towards the program in question. And,
again, Madam Chairwoman, thank you for the work that you have
done to help correct some of the flaws we have had in the
distribution of these funds.
Earlier this week, a local news station, WBUR, [inaudible]
Renters in the southern part of the district I represent in
Bristol County were twice as likely to have been evicted during
the pandemic. And they have actually seen more authorizations
for evictions in two cities, Fall River and New Bedford, than
in Boston, which is a city 6 times their size.
There are a lot of reasons for this, but one of them, as
the article pointed out, is that some renters do not even learn
of the rental assistance at all until they are actually in
eviction court itself, and sometimes learn of rental assistance
even in eviction court. They are literally getting evicted
through the court process and never had been told about it.
So, I would like to focus on housing courts and their role
as the last tripwire in this whole process for making people
aware of their rights. Ms. Salazar, if you could start by
saying if you have seen any programs that are effective, where
the courts are doing their job?
Ms. Salazar. Thank you, sir, for that question about the
role of courts and eviction diversion. Certainly, our hope is
to be able to respond quickly to get rental assistance into the
hands of tenants before we reach that point.
But one of the things that we are seeing work really well
is that our local program administrators on the ground are
collaborating with the court systems to intervene and directly
get rental assistance into the hands of folks who have received
a filing. And so, it is those kinds of relationships and
cooperation that are absolutely critical.
And I would say that one of the things that is helpful in
the chairwoman's bill is being more focused on administrative
dollars, technical assistance, and the support for local
community-based organizations so that we can set up those kinds
of effective programs to engage [inaudible] Solution.
Mr. Auchincloss. And in my final minute, Ms. Salazar,
again, perhaps you could, and with each witness [inaudible] Say
for the sake of the record whether you support self-attestation
as programmed in this bill.
Ms. Salazar. Thank you for the question. Self-attestation
certainly speeds the provision of rental assistance. What we
have seen in our own program in Oregon is that some of our
local administrators have been quick to adopt self-attestation
as part of the process and some have been slower to adopt it
for various reasons. And when we see it utilized--
Mr. Auchincloss. Ms. Salazar, I apologize for interrupting,
but I only have about 20 seconds. I want to let the other
witnesses quickly say if they support self-attestation or not.
Mr. Morris, perhaps you next?
Mr. Morris. I do support self-attestation.
Mr. Auchincloss. Thank you.
Mr. Winn?
Mr. Winn. Yes. It is not a perfect solution, but I do think
it is required at this time to get the money out effectively.
Mr. Auchincloss. Thank you.
Mr. Schwartz?
Mr. Schwartz. Yes, I support self-attestation.
Mr. Auchincloss. Okay. Thank you.
Ms. Yentel. And we strongly support it as well.
Mr. Auchincloss. Thank you all.
Madam Chairwoman, I yield back.
Chairwoman Waters. Thank you. The gentleman's time has
expired.
Do we have any more Members on the platform who have not
yet participated?
If not, I would like to thank all of our witnesses for
being here today and for providing us with very valuable
testimony.
The Chair notes that some Members may have additional
questions for these witnesses, which they may wish to submit in
writing. Without objection, the hearing record will remain open
for 5 legislative days for Members to submit written questions
to these witnesses and to place their responses in the record.
Also, without objection, Members will have 5 legislative days
to submit extraneous materials to the Chair for inclusion in
the record.
And, with that, this hearing is adjourned.
[Whereupon, at 3:44 p.m., the hearing was adjourned.]
A P P E N D I X
September 10, 2021
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