California’s $5.2 Billion Rent Relief Fund Nearing Bottom of the Barrel

BY BEN CHRISTOPHER,  CalMatters

Since its inception in 2021, California’s COVID-era $5.2 billion rent relief program has been plagued with delays, criticism and a lawsuit. 

Now, it might be at risk of running out of money. 

More than 100,000 renters who are still awaiting assistance from a program that stopped taking new applications more than a year ago could be officially out of luck.

That could leave the more than 100,000 renters who are still awaiting assistance from a program that stopped taking new applications more than a year ago officially out of luck.

The first warning sign came in the form of an email a staffer with the state Housing and Community Development Department sent out in early September to lawyers representing many of those same anti-poverty groups, which entered into a legal settlement with the department over the program earlier this year.

“As of July 31, 2023, the program had $128,940,473 in funding left for disbursement to applicants,” the staffer wrote in the email shared with CalMatters. The next round of payments would  provide assistance to an estimated 5,521 households. But any money leftover “is unlikely to add enough funds to the remaining balance to support more than one additional” payment, the letter stated.

In other words, the program may soon be out of cash, though it’s impossible to say when. 

In a statement, department spokesperson Pablo Espinoza did not dispute the contents of the email, but insisted that the program still has cash available for now. 

“We have not run out of funds and we continue to evaluate applications that are eligible for funding,” he wrote. “The fact is that this was always meant to be a temporary emergency program, and funding is not infinite.  It is unclear whether there will be sufficient funding to pay all eligible applicants,” he added in a subsequent statement.

That contradicts prior assertions made by the department.

According to the housing department, 92,713 Californians are still awaiting an initial decision on their request for financial assistance. Another 34,751 appealed a prior rejection. 

In March 2022, Nur Kausar, then a spokesperson for the state housing department, told CalMatters that the program would “continue to operate until all complete applications received are processed and all eligible applicants have been paid.”

A statement on the program website, since removed but stored on Internet Archive’s Wayback Machine, included a similar claim: “All eligible applications received on or before March 31, 2022, for rent or utilities owed between April 1, 2020 through March 31, 2022, will be paid.”  

The program was created to help struggling tenants cover rental debt accrued between the beginning of the pandemic and March 2022. The housing department has struggled to work through a backlog of unaddressed applicants and unresolved rejection appeals in the 19 months since. 

Espinoza acknowledged those prior statements in his statement.

“This is an error that has been addressed and corrected with all stakeholders for some time now. We embrace this renewed opportunity to reiterate the information accurately,” Espinoza said.

According to the housing department, 92,713 Californians are still awaiting an initial decision on their request for financial assistance. Another 34,751 appealed a prior rejection. It’s impossible to say how many of these nearly 130,000 applications will ultimately be rejected.

The prospect of the state’s COVID relief fund closing out its accounts comes just as the last COVID-era moratoriums on evictions expire across the state. In Los Angeles and Alameda County, that’s led to a spike in eviction proceedings

The article titled "Is California’s COVID-era rent relief program running out of money?" appeared first at CalMatters here: https://calmatters.org/housing/2023/10/covid-rent-relief/

CalMatters is a nonprofit, nonpartisan media venture explaining California policies and politics.