REP. GOMEZ AND CHAIRWOMAN WATERS SEND LETTER TO TREASURY SECRETARY YELLEN ABOUT UNUSED EMERGENCY RENTAL ASSISTANCE
Washington, February 16, 2022
Tags: Economy and Jobs
WASHINGTON – Today, Congressman Jimmy Gomez (CA-34) and Maxine Waters (CA-43), Chairwoman of the House Financial Services Committee, co-led a letter with 36 Members of California’s Congressional delegation to Treasury Secretary Janet Yellen urging the Department of the Treasury to reallocate unused Emergency Rental Assistance Program (ERA) funds to states with the highest need for such aid.
“As the U.S. Department of the Treasury reallocates unused Emergency Rental Assistance (ERA) program funds, we write to encourage the Department to deploy resources in an equitable and expeditious manner to grantees with the highest proportion of the program’s target population,” wrote the lawmakers. “Californians continue to struggle with immense economic challenges brought on by the coronavirus pandemic. Without urgent action from the Treasury to provide additional ERA funding to California, some of the nation’s highest-need and most vulnerable renters will be at-risk of losing their homes.”
Under the leadership of Chairwoman Waters, Congress provided $46.6 billion in emergency rental assistance to states and localities to help struggling renters during the coronavirus pandemic. According to statute, the Department of the Treasury must reallocate unused ERA funds but has discretion in determining which grantees will receive additional funds through the reallocation process. Given that California has the highest rate of unemployment in the country due to the pandemic, and 1.5 million renters in the state are struggling to pay rent, the California lawmakers want to ensure that Treasury’s reallocation will prioritize states and communities with residents experiencing a disproportionate need for rental assistance.
See the full text of the letter below.
The Honorable Janet L. Yellen
United States Department of Treasury
1500 Pennsylvania Avenue, N.W.
Washington, DC 20220
Dear Secretary Yellen,As the U.S. Department of the Treasury reallocates unused Emergency Rental Assistance (ERA) program funds, we write to encourage the Department to deploy resources in an equitable and expeditious manner to grantees with the highest proportion of the program’s target population. Californians continue to struggle with immense economic challenges brought on by the coronavirus pandemic. Without urgent action from the Treasury to provide additional ERA funding to California, some of the nation’s highest-need and most vulnerable renters will be at-risk of losing their homes.
According to the U.S. Bureau of Labor Statistics, California has the highest rate of unemployment in the country at 6.5 percent, while the latest data from the U.S. Census Bureau reports that more California renters—nearly 1.5 million—have fallen behind on paying rent compared to any other state. At the same time, California has the largest number of people experiencing homelessness in the country with over 161,000 people across the state forced to sleep in shelters or on streets or in cars on any given night. The state’s homelessness crisis is largely driven by individuals being unable to afford their homes—a problem that has been exacerbated by the pandemic. Metro areas in California experienced rapidly rising rents in 2021. For example, Fresno saw the highest rent increase in the country at more than 23%, while communities, including Bakersfield, Sacramento, Riverside and Chula Vista experienced rent increases over 10%. While the California state government has proactively sought to protect struggling renters by requiring landlords to apply for emergency rental assistance before filing for eviction, this protection will be significantly undercut as the state rapidly expends the entirety of its allocation of emergency rental assistance due to overwhelming demand. As a result, we are deeply concerned that there will soon be a wave of evictions across the state, making a dire situation even worse.
As you know, Congress, under the leadership of Chairwoman Waters, established the Emergency Rental Assistance Program (ERA) with $25 billion in initial funding through the Consolidated Appropriations Act of 2021 (ERA1) and later provided an additional $21.6 billion through the American Rescue Plan (ERA2). From the funds provided by Congress, California received a total of $4.62 billion, enabling the state and local governments to assist more than 350,000 households through the end of November. This federal relief has proven essential to ensuring our most vulnerable constituents remain stably housed during the pandemic. However, we know there are many more Californians in need of such assistance as demand continues to far outpace the amount of funding available. While we appreciate that the state will receive an additional $50.3 million in program funds through the reallocation of ERA1 funding, as the Department of Treasury develops new guidance outlining the process for reallocating ERA2 funding, we urge the Department to:
1. Release new guidelines for the distribution of reallocated ERA2 funds as quickly as possible;
2. Prioritize reallocating funding to communities with the greatest need; specifically, Treasury should apply a similar prioritization strategy as was used in the “high need grantee” allocation methodology established in ERA2, which factors in a grantee’s share of very low-income renter households paying more than 50 percent of income on rent, overcrowding, rental market costs, and change in employment since the beginning of the pandemic; and3. Use its statutory authority to reallocate unspent ERA2 funds as quickly as possible, which can begin as early as March 31, 2022.
Thank you for your consideration. We are grateful for your leadership in implementing the ERA program and look forward to continuing to work with you to ensure families in need are receiving this critical relief.