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JOINT PRESS RELEASE: California Says Emergency Rental Assistance Program Will Likely Run Out of Funds with Over 140,000 Applicants Still in Limbo

For Immediate Release: January 23, 2023​

Press Contact:

Joshua Busch, 310-991-2503, ​[email protected]
Estevan Montemayor, [email protected]

 

California Says Emergency Rental Assistance Program Will Likely Run Out of Funds with Over 140,000 Applicants Still in Limbo

State lawyer says the program’s remaining $177 million could go to private contractor if the state is forced to comply with a Superior Court order, leaving no money for tenants.​

Oakland, California – January 23, 2023 – More than 140,000 Californian households who have been waiting for over ten months for a response to their rental assistance applications may be denied their opportunity to receive rent relief because the program will run out of money, according to the state’s lawyer. In a court hearing last Thursday afternoon, a lawyer for the State of California told a judge that the state’s Emergency Rental Assistance Program would need to spend its remaining $177 million on administrative costs if forced to comply with the court’s order to provide basic constitutional due process, leaving no money for tenants. The state claims it will pay its private contractor most – if not all – of its remaining funds just to fix its flawed application process and provide basic information to tenants it believes are ineligible for assistance.

At stake at Thursday’s hearing was how the state would issue denial notices to around 104,000 renters who submitted applications over ten months ago, and another 40,000 who have pending appeals. The state was sued by community groups Alliance of Californians for Community Empowerment (ACCE Action), Strategic Actions for a Just Economy (SAJE) and PolicyLink last June for issuing flawed notices that provided little or no explanation for why an applicant was denied, making it difficult for wrongfully denied tenants to appeal. Last July, a Superior Court judge agreed the state was violating applicants’ due process rights and issued an injunction blocking the state from denying tenants until the problems were addressed. But in the past six months, most tenants have received no information about why their applications have been delayed. Now, after waiting nearly a year, many may receive no assistance, even if the state determines they are eligible. This goes back on a guarantee the state made last year when announced it was abruptly closing the rental assistance program but promised that “every eligible applicant seeking assistance for eligible costs submitted and incurred on or before March 31, 2022, would be assisted.”

On Thursday, Alameda Superior Court Judge Frank Roesch said the state’s denial notices must “specify the facts supporting the denial” to satisfy due process, meaning the notice must provide enough information for applicants to understand why the state does not believe their application meets program requirements. The Court acknowledged that being told why tenants are being denied is important to allow applicants a meaningful opportunity to appeal and correct their paperwork. The state’s lawyer argued such a requirement would be too burdensome, and the state would have to pay its remaining rent relief funds to the private contractor it hired to administer the program. Judge Roesch rejected the state’s argument and its implications that “a constitutional principle can be ignored because of budgetary reasons.”

“We’re relieved that tenants who applied for desperately needed rent relief will finally get a notice that tells them the reason they are being denied assistance, and a fair chance to appeal – that’s been our goal since this suit was filed,” said Madeline Howard, senior attorney with Western Center on Law & Poverty. “But it’s extremely frustrating that the state has been fighting so hard to avoid giving tenants this basic information that should have been provided from the start. We are alarmed by the state’s threat to use the program’s remaining funds to pay an out-of-state contractor $177 million just to tell tenants the reason they are being denied. This threat raises very serious concerns about how the Department of Housing and Community Development has managed this funding.”

“Low-income people were decimated by this pandemic—financially, physically, and emotionally—and it is the responsibility of government to provide support for residents in times of crisis such as these,” said Cynthia Strathmann, executive director of SAJE. “Instead, the state is threatening to use all of its funds to deny people the financial support they so desperately need, after spending hundreds of millions on a private contractor. This terrible irony should not be accepted.”

In court documents, California’s Department of Housing and Community Development revealed that it hired a private, for-profit company to administer the state’s rent relief program. Based in Mississippi, Horne LLP has developed a business running and profiting off of safety-net programs created in the wake of calamitous events like hurricanes, floods, and, more recently, pandemics. California has already agreed to pay Horne over $260 million to administer its program. Recent invoices show California has been charged an average of $7.72 million per month, even with the program closed to new applications and apparently at a standstill.

“The Emergency Rental Assistance Program was created to keep struggling Californians housed during an unprecedented pandemic that put millions on the brink of homelessness,” said Faizah Malik, a supervising senior attorney with Public Counsel. “However, the execution of the program has been terribly flawed. While Judge Roesch’s order helps to correct one major problem, it is fundamentally unfair for the state to now deny tenants crucial assistance because of its poor management of the program. If it is true that the state must use the remaining funds to just satisfy its constitutional obligations, it must allocate additional funds to provide the rental relief that tens of thousands of California families were promised.”

“I’m grateful the judge is on our side on this issue, but many eviction protections are expiring imminently, and HCD needs to hurry up to prevent more families from being forced to live under bridges,” said Patricia Mendoza, statewide organizer for ACCE. “The state asked us to stay home during the pandemic, and they promised that if we did so, we would be taken care of. If they want to follow through on that promise, they need to do what it takes to increase their funding to ensure tenants get the rent relief they are due now.”

“Nothing was stopping the state from reaching out to the renters who have been in limbo over the past six months to help them fix potential mistakes on their applications or ask for missing information,” said Jonathan Jager, an attorney at Legal Aid Foundation of Los Angeles. “Yet, that wasn’t done, and our neighbors and communities will pay the price.”

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Western Center on Law & Poverty fights in courts, cities, counties, and in the Capitol to secure housing, health care, and a strong safety net for Californians with low incomes, through the lens of economic and racial justice.

Legal Aid Foundation of Los Angeles (LAFLA) is a nonprofit law firm that seeks to achieve equal justice for people living in poverty across Greater Los Angeles. LAFLA changes lives through direct representation, systems change, and community empowerment. It has five offices in Los Angeles County, along with four Self-Help Legal Access Centers at area courthouses, and three domestic violence clinics to aid survivors. 

Public Counsel is the nation’s largest provider of pro bono legal services, utilizing an innovative legal model to promote justice, hope, and opportunity in lower-income and communities of color in Los Angeles and across the nation. Through groundbreaking civil rights litigation, community building, advocacy, and policy change, as well as wide-ranging direct legal services that annually help thousands of people experiencing poverty, Public Counsel has fought to secure equal access to justice for more than 50 years.

 

 

Western Center Roundup – July 2022

A Summer of Advocacy: Protecting Tenants & Securing Budget Wins


Judge orders CA HCD to stop denying Emergency Rental Assistance until further review

Last month, we told you about our second lawsuit against California’s Department of Housing and Community Development (HCD) on behalf of tenant groups over the lack of transparency and due process for applicants to the state’s COVID-19 Emergency Rental Assistance Program (ERAP). This month brought good news for California tenants in need of assistance in the form of a court injunction ordering HCD to stop denials for rental assistance applications until the court can determine if HCD’s process meets constitutional due process standards.

In the meantime, HCD can continue to approve applications to get assistance to those who need it, but they cannot deny pending applications. Tenants with pending ERAP applications or applications the court decision might make eligible for appeal should continue to contact HCD and fight eviction attempts. We will keep you posted as the process continues, but for now, we are celebrating with a sigh of relief.


Protecting Californians from housing price-gouging after disaster 

The Sacramento team is gearing up for the end of the legislative session in August, which includes pushing for the passage of this year’s Western Center sponsored bills as well as making sure harmful bills don’t pass. Western Center housing policy advocate Tina Rosales has her eye on a problematic bill, SB 1133, that would undo decades of price-gouging protections during disasters and green light landlords who would capitalize on emergencies by hiking rents.

Tina wrote a blog post outlining the spate of problems with the bill and calls on readers to help stop price gouging after disaster by contacting state legislators to urge their NO vote on SB 1133.


California Assembly Holds Inaugural Select Committee on Poverty & Economic Inclusion Hearing  

Western Center and community groups were honored to join conveners Assemblymember Isaac Bryan and EPIC (Ending Poverty in California) for a powerful event centered on shaping California’s roadmap to ending poverty. Western Center’s Director of Policy, Mike Herald provided committee testimony addressing the high costs of being poor, tackling the State’s burdensome CalWORKs requirements and unjust interception of child support that should be benefitting low-income families on CalWORKs. You can read more from EPIC’s Executive Director, Former Stockton Mayor Michael Tubbs on the organizing and policy work to secure this year’s historic antipoverty investments in the State budget and watch a video of the hearing and rally.


Save the Date: 8/15 at 12PM Meet the Advocates Webinar 

Join us for a free webinar focused on Senate Bill 972 and the advocacy efforts to support California’s street food vendors by removing barriers to accessing food vending permits. Community organizers and policy advocates will lead a discussion on food justice, highlighting street vendors’ role in expanding access to healthy food in California’s food deserts and beyond. REGISTER HERE.


Final 2022-23 California Budget 

Finally, in case you missed it, we published Western Center’s overview of the final 2022-23 California Budget at the tail end of June. You can read it here!


 

California can’t deny pending applications for rent relief while its denials are under review, judge says

“That hearing will probably take place in September, said attorney Lorraine Lopez of the Western Center on Law and Poverty, one of the organizations representing the renters. During the interim, Lopez and her colleagues said, nearly 100,000 households will be entitled to rental benefits without interference by the department.”

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PRESS RELEASE: Judge Orders CA Dept of Housing & Community Development to Stop Denying State Rental Assistance Applications Until Further Review

FOR IMMEDIATE RELEASE

The court agreed that HCD denied applications without meaningful explanation or a transparent appeals process

Oakland, CA – An Alameda County court has sided with tenant advocates and ordered California’s Department of Housing and Community Development (HCD) not to deny any pending rental assistance applications until the court can determine if HCD’s process meets constitutional due process standards. The court concluded that HCD may be violating the constitutional rights of tenants who applied to the state’s Emergency Rental Assistance Program (ERAP) by failing to provide an adequate process for tenants to challenge denials.

“Over the past few months, I’ve worked with hundreds of tenants who received a denial with little to no explanation and are terrified about losing their homes. I’m just so relieved to see the judge take action to address this problem, and to give families a fighting chance to receive the rent relief they are due,” said Patricia Mendoza, Organizer at Alliance of Californians for Community Empowerment (ACCE).

The court also paused the 30-day deadline for tenants to appeal denials, meaning denials issued will not become final. It’s estimated the decision could impact nearly 100,000 tenant households across the state, including those who still have applications pending and those who had their appeals denied. The court’s order does not prevent HCD from approving pending rental assistance applications, including those on appeal.

“At SAJE, we have helped over 300 tenants through our Emergency Rental Assistance Program Clinics; many have still not heard back, or were denied for ‘lack of response,’” said Mateo Gil, Community Organizer at Strategic Actions for a Just Economy (SAJE). “There was even a case where a tenant in need was denied for a lack of lease when they had a verbal rental agreement. SAJE and the Keep LA Housed Coalition are working hard to ensure our communities, many undocumented, get their applications processed. Thousands of households are still at risk of eviction, and many of those are possibly going to fall into homelessness without stronger permanent protections now and after the pandemic.”

Last month, ACCE and SAJE, along with research and action institute PolicyLink, filed a lawsuit against HCD for administering ERAP in an opaque and discriminatory way and for refusing to provide adequate explanation to tenants who were denied assistance. Yesterday, a judge agreed that the denial notices HCD sent out are too vague, that applicants have no meaningful way to appeal, and that HCD indefensibly refused to tell applicants which of their documents led to denial. The tenant organizations are represented by Western Center on Law & Poverty, Public Counsel, and Legal Aid Foundation of Los Angeles.

“Too often, tenants have been wrongfully denied rental assistance that they are eligible for. It is crucial to prevent further denials and existing denials from becoming final until HCD gives tenants the information that they need to challenge a wrongful denial,” said Nisha Kashyap, Supervising Staff Attorney for Consumer Rights and Economic Justice at Public Counsel.

The Emergency Rental Assistance Program was created to keep vulnerable tenants housed amid the ongoing economic fallout from the pandemic, but it has been the target of multiple lawsuits challenging how the program was designed and implemented. Advocates point to the latest comprehensive numbers released from the state, which show that as of June 23 2022, 157,881, or 33 percent, of the reviewed applications were denied, putting tens of thousands of people at risk of eviction now that the state’s eviction protections have expired. California received $5.2 billion in federal funds and HCD was charged with creating an application process, screening tenants for eligibility, and distributing the funds.

“We have to keep people housed,” said Madeline Howard, Senior Attorney at Western Center on Law & Poverty. “That’s why we filed this lawsuit — the program was created to prevent evictions but falls woefully short. We are very pleased that the judge ordered HCD to stop denying tenants with this unfair system.”

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Legal Aid Foundation of Los Angeles (LAFLA) is a nonprofit law firm that seeks to achieve equal justice for people living in poverty across Greater Los Angeles. LAFLA changes lives through direct representation, systems change, and community empowerment. It has five offices in Los Angeles County, along with four Self-Help Legal Access Centers at area courthouses, and three domestic violence clinics to aid survivors.

Public Counsel is a nonprofit law firm and the nation’s largest provider of pro bono legal services. It serves communities locally and nationwide by advancing civil rights litigation, advocating for policy change and providing free legal services to thousands of clients annually.

Western Center on Law & Poverty fights in courts, cities, counties, and in the Capitol to secure housing, health care, and a strong safety net for Californians with low incomes, through the lens of economic and racial justice.

Tens of thousands of Californians in limbo as eviction protections end

“Tenants are facing eviction even as their landlords are given these giant checks and tenants who are eligible for assistance are being denied with these cryptic notices that don’t tell them why. It just doesn’t make sense,” said Madeline Howard, a senior staff attorney at Western Center on Law & Poverty, one of the groups suing the state over the program.”

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