State reaches settlement over pandemic rent relief: What tenants and landlords need to know

Nov 19, 2023

Tenants' rights advocates and the California Department of Housing and Community Development reached a settlement this week to address processing delays and denials in rent relief applications for eligible tenants, meaning more renters could soon get financial aid.

During the pandemic, California tasked the department with administering more than $5 billion in state and federal funds to assist vulnerable tenants with rent relief through California's COVID-19 Emergency Rental Assistance Program. The agency closed the application portal at the end of March 2022.

A surge in denials beginning after the closure propelled advocates to sue, alleging that eligible renters were rejected and left without financial aid. By July, around 30% of applicants had been denied assistance from the program, even though 93% were likely eligible for debt relief, according to the National Equity Atlas, an organization that reports on racial and economic equity.

"The way the program was set up was not responsive to the population it was meant to serve," said Faizah Malik, senior staff attorney at Public Counsel, a nonprofit law firm that helped represent the community advocacy organizations that sued the state.

Tenant advocates sued the housing department in June 2022 for distributing funds through an application process they characterized as muddled with barriers for low-income and vulnerable individuals unfamiliar with navigating government bureaucracy. Tenants found long waits, language and technological barriers, and vague explanations if they were denied assistance, according to lawyers involved in the settlement. The settlement requires the department to make several changes to its system for pending relief applications and to provide tenants with the information they need to appeal.

More than 100,000 households are waiting to hear whether they will receive rent relief, according to a data analysis by Public Counsel.

"Ultimately, the petitioners and [the Department of Housing and Community Development] chose to settle the litigation to move the program forward with the shared goal of assisting Californians," department officials said in a statement to The Times. "We are committed to working with our partners to bring resolution and support to those remaining in the application pipeline."

The settlement comes as the city of Los Angeles' first rent repayment period ends on Aug. 1 — the deadline for tenants to pay rental debt accumulated between March 2020 and September 2021.

According to the complaint, tenants often received rent relief denials that amounted to a few words, such as "nonresponsive," "inconsistent" or "unverifiable" information. Without more detailed explanations, tenants weren't sure why they were denied or how to appeal successfully, the advocates suing the state said.

Applicants who did not speak English received little assistance, while others were denied for a single missing document from the long list of papers required for verification, Malik said. Many tenants do not have formal leases, she added, which also caused denials.

Low-income older adults who are not used to dealing with online technology similarly found the application process "insurmountably difficult," said Cynthia Strathmann, executive director of Strategic Actions for a Just Economy, one of the organizations that sued the state. These individuals often didn't have emails or laptops, struggled to remember their passwords and didn't know how to log in to their portals.

The housing department's call center provided little, if any, help, Malik said: Tenants would call dozens of times, and nobody would answer. People who did answer did not always have authority to enter the portal.

What's more, many tenants were evicted after they applied for funding but before they received it, said Madeline Howard, senior attorney at Western Center on Law & Poverty, one of the law groups that helped file the lawsuit. The state had no mechanism to track people who were evicted while awaiting assistance, Howard added.

Valeria De La Luz said she accumulated over $30,000 in rent debt during the pandemic. The Los Angeles resident, who speaks only Spanish, applied for rental assistance in November 2021. She was approved, she said, but the next day the decision switched to a denial due to insufficient evidence that she qualified. De La Luz submitted an appeal in March 2022, but has yet to hear from the housing department.

"I don't feel safe at home," De La Luz said in an interview with The Times.

On top of mounting debt and debacles with her landlord, De La Luz said she lost her job due to the pandemic and has been diagnosed with several health issues. She says she hesitates to receive the surgery she needs because she has no safe place to recover.

"I do have some peace and quiet. I feel a little bit of a relief, but I am not calling this a win because I still have not gotten the funds that I was promised," De La Luz said. "I know that I’m not the only one."

Landlords, especially those who manage small properties and are eligible for the relief, are also celebrating the settlement after losing several years of rental income during the pandemic. Debra Carlton, executive vice president of the California Apartment Assn., said she still expects some landlord applicants will receive denials.

"It's been much harder on the smaller owners who can't balance it out with other tenants," she said.

The settlement

Tenants who applied for the rental aid before the end of March 2022 and were denied by June 7 of that year or who have pending applications should expect to receive an update about their applications in the coming months, according to a news release. For many tenants, the housing department is required to issue new, more detailed denial notices. Applicants who are denied assistance will have 30 days to appeal.

Additionally, the settlement requires the state agency to make the appeals process easier, fix language barriers, and conduct an audit of denials from March to May 2022 due to "non-responsiveness." The department is also required under the legal agreement to fund local, community-based programs to help tenants navigate the appeals process.

Howard said that plaintiff lawyers and their clients will meet with the housing department every two weeks for three months, and then monthly to ensure that there is open communication in case problems arise.

In a February court filing, the housing department said it had some $300 million in state and federal funds left to administer.

Despite the settlement, rent debt left over from the pandemic will remain a source of stress, eviction and homelessness, Malik said, as renters have still been accruing debt after the application portal closed in March 2022.

"This settlement doesn't mean that this issue is gone," she said.

Tenants and landlords with pending applications can access Public Counsel's FAQ at carentrelief.org or call Housing Is Key's call center at (833) 343-2122. To check your portal and update your information, visit hornellp-ca.neighborlysoftware.com/CaliforniaCovid19RentRelief/Participant.

Times staff writer Hannah Wiley contributed to this report.

This story originally appeared in Los Angeles Times.