California’s $5.2 billion pandemic rental relief fund is running out of money even as the pandemic deepens economic turmoil and tenant protections expire in March.
Housing advocates have seen a steady demand in recent months for assistance to protect people from displacement or eviction. The state requested an additional $1.9 billion from the federal emergency rental assistance program to cover landlord and tenant debts, but last week received just $62 million in additional funds.
Aid requests from tenants and landlords have now hit $6.9 billion, according to state data. Officials say some of those requests will be ineligible or are duplicate applications that will be denied. Still, Oakland has started a waitlist, anticipating demand will exceed the fund’s resources. The state is still accepting applications.
“It’s premature in this moment to know if we are over-subscribed,” said Geoffrey Ross, deputy director of the state department of housing and community development, “because we don’t know how much more funding we will receive.”
State officials estimate they need an additional $2.5 billion to cover upcoming demand. The federal government is expected to redistribute additional, unused funds this spring. But California’s tenant protections end in March, allowing landlords to resume evictions for nonpayment in most cities.
Housing and landlord advocates say the ever-lengthening pandemic has strained a system launched in March to stem evictions and keep families housed during the health crisis.
“California will need significantly more funding from future federal reallocations in order to continue to meet the needs of low-income California renters impacted by COVID-19,” said Lourdes Castro Ramirez, the state’s Business, Consumer Services and Housing Agency secretary. The state will continue to focus relief toward the lowest income families and tenants facing displacement, she said.
Tenants and landlords apply to state and local programs, and eligible, low-income renters can have up to 100% of their back rent paid to their landlord. Some may also qualify for payment of future rent. The state estimates the various programs have helped nearly 250,000 families and distributed about $2.5 billion to landlords.
The slow pace of payments has been an issue for the program since its inception. After March 31, landlords will again be allowed to evict tenants for nonpayment in most cities, increasing pressure to make aid payments. Housing advocates are worried and landlords are restless.
“We are very concerned,” said Debra Carlton, executive vice president of the California Apartment Association. “Millions of dollars have gone unpaid to tenants and owners. Many owners have received no rent for months. They cannot pay their taxes, mortgages and other expenses if the rent continues to go unpaid.”
Aid programs saw a surge of requests in October when some protections ended for tenants who did not apply for aid. Advocates say although the rapid spread of the omicron variant has not yet produced a spike of increased need, they expect it will as economic upheaval continues for many low-wage and frontline workers.
The Bay Area was slated to receive about $480 million in initial funding, distributed through a collection of city, county and state programs. The state’s largest cities, including Los Angeles, San Jose, San Francisco and Oakland, ran their own programs with federal funds. In the Bay Area, Fremont and Santa Clara and Alameda counties also established local systems.
The joint relief program administered by San Jose and Santa Clara County has received $185 million in requests for its $161 million fund, said Emily Hislop, San Jose housing policy and planning administrator. Advocates have been referring some tenants to private charities.
Demand has remained steady, with the greatest need coming from parts of San Jose and Gilroy. “People did everything they could to keep up,” Hislop said. “Now, it’s catching up with them.”
Shola Olatoye, Oakland’s director of Housing and Community Development, said the East Bay program was averaging about 400 applications a week. It has received about $57 million in requests for its $32 million fund and started a waitlist last week.
“There’s a lot of need here in Oakland,” she said.
Safety net nonprofits have seen steady demand in recent months for food and clothing, allowing low-income families to put money toward rent. “The reality is, people are still struggling in our high-cost region,” said Greg Kepferle, CEO of Catholic Charities of Santa Clara County.
The agency has been conducting pop-up clinics for needy renters at food distribution sites, he said. The nonprofit has helped more than 1,000 families get rental assistance since April. Providing even temporary relief – two or three months rent – will go a long way toward preventing homelessness for many families, he said.
Bart Charlow, CEO of Samaritan House in San Mateo, said increased donations have helped support the charity. But, he added, “we’re far from over with the pandemic and we’re far from over on the economic after-effects … We don’t expect private charity to continue at this pace.”
Jonathan Russell of Bay Area Community Services in Oakland compared the crisis to the long-lasting impacts of the subprime mortgage collapse that began in 2007. Many homeowners lost their houses and saw their credit histories ruined.
“We will very likely, not immediately, see the impact on homelessness,” Russell said. “These impacts will probably slowly grow and accrue in coming months and years.”
