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Tenants’ Rights Advocates Reach Landmark Settlement on Behalf of Californians Struggling With Pandemic Rent Debt

TENANTS’ RIGHTS ADVOCATES REACH LANDMARK SETTLEMENT ON BEHALF OF CALIFORNIANS STRUGGLING WITH PANDEMIC RENT DEBT

The agreement requires the California Department of Housing & Community Development to give pending and denied applicants a fair chance to receive Covid-19 rental assistance

LOS ANGELES—A landmark settlement has been reached in a case brought by tenants’ rights advocates alleging that the California Department of Housing & Community Development (HCD) unconstitutionally operated the state’s Covid-19 Emergency Rental Assistance Program (ERAP or Housing is Key), which has led to qualified applicants missing out on the assistance they were promised after the pandemic destroyed many Californians’ livelihoods. More than 100,000 households are still waiting for a decision on their applications—and many of them are being served with eviction notices and being harassed by their landlords for rent they still owe. The settlement agreement will offer a renewed chance for applicants who remain in limbo to receive Covid-19 rental assistance, which remains essential to supporting and stabilizing families as the housing and homelessness crisis worsens in California.

California’s Covid-19 Emergency Rental Assistance Program was created to provide direct assistance to low-income families struggling to pay rent during the pandemic. The Alliance of Californians for Community Empowerment (ACCE Action), Strategic Actions for a Just Economy (SAJE), and PolicyLink—represented by Western Center on Law & Poverty, Public Counsel, the Legal Aid Foundation of Los Angeles, and Covington & Burling LLP—sued HCD in June 2022 for several systemic failures in the program, including a confusing application process that led eligible tenants to be wrongfully denied assistance.

“The rental assistance program was intended to provide housing stability for low-income tenant families who were impacted by Covid-19, but delays and dysfunction left far too many eligible families facing eviction because they could not access this critical assistance,” said Madeline Howard, Senior Attorney at Western Center on Law & Poverty. “We are hopeful that this settlement will create an opportunity for these tenants to finally receive the help they need.”

“This settlement will mitigate some of the worst long-tail impacts of the Covid-19 pandemic on our local communities, and Covington is very proud to have partnered with our co-counsel and clients in this important work,” said Neema Sahni, Partner at Covington & Burling LLP.

California identified more than $6 billion in rental assistance from the state and federal government for the Housing is Key program, which came at a critical time and should have made a profound difference for the hundreds of thousands of families impacted by the economic fallout of the pandemic. More than half a million households applied to the program. Thus far, HCD has denied nearly 30 percent of applicants, according to an analysis of program data conducted by the National Equity Atlas (a research partnership between PolicyLink and the USC Dornsife Equity Research Institute). The vast majority of those denied (93 percent) have incomes below 80 percent of the area median income—the income threshold to be eligible for the program. Tenants did not receive any meaningful explanation of why they were being denied the help they needed to avoid eviction, and many had difficulty accessing the appeal process.

“We filed this case because we started to see a sharp rise in denials for tenants we knew were eligible, including clients of legal aid organizations across the state, who were relying on rental assistance to stay housed and off the streets,” said Faizah Malik, Senior Supervising Attorney at Public Counsel. “With the settlement of the case, many thousands of families will have another chance to receive the aid that they were promised.”

As part of the settlement, HCD has agreed to take several steps to improve its process for the remaining ERAP applications, including:

  • Providing tenants who are going to be denied all or part of the assistance they requested with a detailed explanation of the reason for denial, so they can address issues with the application and have a fair opportunity to appeal;
  • Ensuring that tenants subject to “recapture” of rental assistance funds have a fair opportunity to challenge the state’s decision;
  • Providing better access to the appeal process; 
  • Expanding funding to the Local Partner Network, which will assist tenants with navigating their pending applications and appeals;
  • Conducting an audit of prior denials to correct wrongful denials of assistance;
  • Improving language access and reasonable accommodation procedures; and
  • Providing greater transparency about who is receiving rental assistance and who is not, with data about the race, ethnicity, and zip code of people denied assistance.

Tenants who have been waiting for a decision on their applications will receive an update in the coming months and should regularly check their email, application portal, and postal mail for notifications. Tenants who have been evicted or moved since they applied for rental assistance should contact the Housing is Key program to update their contact information and ensure they receive any important notices. Those who receive a denial will have 30 days to file an appeal.

“SAJE has assisted hundreds of tenants on their rent relief applications, and many of the most vulnerable tenants are still in the waiting pool, confused and scared,” said Cynthia Strathmann, Executive Director of SAJE. “We hope that tenants now will finally get the information they need to get their applications approved so they can pay off their pandemic rent debt, a major source of continued stress and harassment.”

“This case brought us in contact with so many families who were evicted or facing eviction because of the Covid-19 pandemic,” said Jonathan Jager, LAFLA staff attorney. “We encourage any renters who are still waiting for an ERAP decision to not give up hope. Keep your contact information up to date with Housing is Key and reach out to the Local Partner Network if you have questions about any communications you receive from the program.”

Rent debt across California remains at crisis levels: an estimated 688,000 households across the state remain behind on rent, according to the National Equity Atlas. Altogether, they owe nearly $2.6 billion in total rent debt, with the average rent debt per household hovering around $3,700. The vast majority of these renters are low-income people of color who have suffered job and income losses due to the pandemic. This persistent and mounting debt further illustrates the importance of this settlement to keeping families in their homes and curbing the surge of evictions that have followed the end of pandemic eviction moratoriums.

“I lost everything I had because of issues with the rent relief program. Right before the pandemic, I put my life’s savings into opening a restaurant. I was then forced to close down, and as a result lost my income, my business, and my entire savings trying to hold on to what I had. I applied for rent relief and at first was denied without explanation. Then I appealed, got approved, but have now been waiting for nearly 2 years for the money to come through. I tried calling the program for help dozens of times but got no help. A year into waiting for the funding, my landlord pressured me to move out, and I became homeless. Thousands of lives have been destroyed because of the failure to get the money out to families that they are due. I am hopeful that this settlement will finally bring us closer to some relief,” said Blake Phillips, former resident of Los Angeles.

“In creating the Covid-19 rent relief program, the state promised to cover 100 percent of pandemic rent debt for tenants in California. We brought this case to ensure that the state lived up to that promise so hundreds of thousands of Californians could survive the pandemic,” said Jefferson McGee, State Board Chair of the Alliance of Californians for Community Empowerment (ACCE). “Housing is health and housing is a human right and we will keep fighting to make that a reality for our members.” 

More information on the details of the settlement can be found here. 

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About Western Center on Law & Poverty

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.

About Public Counsel

Public Counsel is a nonprofit public interest law firm dedicated to advancing civil rights and racial and economic justice, as well as to amplifying the power of our clients through comprehensive legal advocacy. Founded on and strengthened by a pro bono legal service model, our staff and volunteers seek justice through direct legal services, promote healthy and resilient communities through education and outreach, and support community-led efforts to transform unjust systems through litigation and policy advocacy in and beyond Los Angeles.

About Legal Aid Foundation of Los Angeles

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.

About Covington & Burling LLP

In an increasingly regulated world, Covington & Burling LLP provides corporate, litigation, and regulatory expertise to help clients navigate their most complex business problems, deals, and disputes. Founded in 1919, the firm has more than 1,300 lawyers in offices in Beijing, Brussels, Dubai, Frankfurt, Johannesburg, London, Los Angeles, New York, Palo Alto, San Francisco, Seoul, Shanghai, and Washington. Since its founding, Covington has demonstrated a strong commitment to public service. The firm is frequently recognized for pro bono service, including 11 times being ranked the number one pro bono practice in the U.S. by The American Lawyer. 

About the Alliance of Californians for Community Empowerment Action (ACCE Action)

The Alliance of Californians for Community Empowerment (ACCE) Action is a grassroots, member-led, statewide community organization working with more than 16,000 members across California. ACCE is dedicated to raising the voices of everyday Californians, neighborhood by neighborhood, to fight for the policies and programs we need to improve our communities and create a brighter future.

About Strategic Actions for a Just Economy (SAJE)

SAJE is a 501c3 nonprofit organization in South Los Angeles that builds community power and leadership for economic justice. Founded in 1996, SAJE focuses on tenant rights, healthy housing, and equitable development. SAJE runs a regular tenant clinic, helps connect local residents to jobs, organizes for tenant rights, and fights for community benefits from future development through private agreements and public policies. We believe that everyone, regardless of income or connections, should have a voice in creating the policies that shape our city, and that the fate of city neighborhoods should be decided by those who live there in a manner that is fair, replicable, and sustainable. 

About PolicyLink

PolicyLink is a national research and action institute advancing racial and economic equity by Lifting Up What Works®. With local and national partners, PolicyLink works to ensure all people in America — particularly those who face the burdens of structural racism — can participate in a just society, live in a healthy community of opportunity, and prosper in an equitable economy. PolicyLink is guided by the belief that the solutions to the nation’s challenges lie with those closest to these challenges.

Court orders California to pause denying pandemic rent aid

“We have to keep people housed,” said Madeline Howard, senior attorney at Western Center on Law and Poverty, in a statement. “That’s why we filed this lawsuit — the program was created to prevent evictions but falls woefully short.”

https://www.pe.com/2022/07/13/court-orders-california-to-pause-denying-pandemic-rent-aid/

Tenant Protections are Expiring as Thousands Wait on Rent Assistance

“At the same time, the state’s rent relief program will stop taking applications at the end of March. Applications will still be processed and payments completed beyond that date. But a new report from PolicyLink and the Western Center on Law and Poverty indicates applicants have been waiting months for the state to make decisions on their cases, and that most applicants have not received payment.”

Tenant Protections are Expiring as Thousands Wait on Rent Assistance

Only 16% of California’s COVID Rent Relief Applicants Have Received Their Checks, New Study Finds

“It really is very problematic to have people still waiting for their money when they’re about to be subject to eviction if they can’t pay,” said Madeline Howard, a senior attorney at the Western Center on Law and Poverty, and one of the study’s authors. The state, she said, must speed up the payment process and extend eviction protections.

“It would be so profoundly unfair and wrong for tenants to be evicted because of these bureaucratic delays,” Howard said.”

Read or Listen Here

State Failed to Offer Legal Aid to State Rent Relief Applicants

“Madeline Howard says the action may be too little too late. She’s a senior attorney with the Western Center on Law and Poverty. “It’s inevitable that many people who needed assistance at this point have already been harmed, have already been evicted from their homes, so it’s going to be too late.”

Listen Here

Western Center’s 2021 Legislative Wrap-Up 

The  2021 California legislative season is over, and Governor Newsom has signed the bills that will become law. Many Western Center priorities made it past the governor’s pen, including groundbreaking legislation like SB 62, which makes California an international leader in the fight to end exploitation of people working in the garment industry, and SB 65, which implements proven interventions to lower California’s unacceptably high mortality rate for Black and Indigenous people who give birth here. 

Below is our slate of co-sponsored bills that were signed by the governor this year, as well as those we plan to bring back next year.


HIGHLIGHTS

SB 62 – The Garment Worker Protection Act seeks to end wage theft in the California garment industry and ensure decent wages for California garment workers by holding California fashion brands to a higher standard of responsibility for the labor of garment workers.  

SB 65 – The California Momnibus is an innovative and comprehensive piece of legislation that reimagines perinatal care in order to close existing racial gaps in maternal and infant mortality and morbidity within the state. 


FINANCIAL SECURITY

AB 461 – CalWORKs Self Employment: Creates a more accessible pathway for CalWORKs recipients to choose self-employment as a work activity. This bill is timely as the state begins to rebuild its economy, which will heavily rely on the talents and creativity of Californians with an entrepreneurial spirit. 


HEALTH

AB 326 – Removes the sunset clause to permanently extend the Consumer Protection Program, which awards advocacy fees to any person or organization that represents the interests of consumers and has made a substantial contribution on regulations, orders, or decisions, within the Department of Managed Health Care.

AB 1020 – Enforcement of the Hospital Fair Pricing Act: We hope that passage of this bill means patients no longer need lawyers to benefit from the Hospital Fair Pricing Act. This bill rose directly out of our legal services partners’ experience in trying to enforce the Hospital Fair Pricing Act. Major components include prohibiting hospitals from selling debt to debt buyers unless they meet all the current standards applicable to debt collectors and agree to take a bill back if the patient should have gotten financial assistance, Medi-Cal, or another payor for their bill; requiring debt collectors and debt buyers to also send patients applications for financial assistance; and increasing eligibility for patients for financial assistance from 350% of the poverty level to 400%.

AB 1355 (2-Year Bill Extending Into Next Year) – Expands Independent Medical Reviews to all Medi-Cal beneficiaries to ensure more beneficiaries can access medically necessary care. Also improves the state’s fair hearing process. 

SB 644 (2-Year Bill Extending Into Next Year) – Allows California’s unemployment department to share information with Covered California when someone applies for or loses benefits to help individuals apply for Covered California or Medi-Cal.


HOUSING

AB 832 – Extended the temporary halt on evictions for nonpayment of rent until September 31, 2021. The bill also created additional tenant protections in court that may halt an eviction if the tenant qualifies and has an approved application for rent relief. For more information, please refer to our COVID-19 tenant relief fact sheet. To apply for financial assistance please visit housingiskey.com.

AB 838 – Enforcement Response to Housing Complaints: Prohibits local code inspection agencies in California from implementing restrictions or preconditions before responding to tenant habitability complaints. The bill specifically prohibits code enforcement agencies from refusing to inspect a unit based on unreasonable conditions, including on the basis that the tenant is behind on rent, is alleged to be in violation of their lease, or is currently in an unlawful detainer (eviction) or other legal dispute with the landlord.

AB 1304 – Affirmatively Further Fair Housing: Strengthens requirements for cities and counties to analyze and proactively address fair housing issues as part of their obligation to affirmatively further fair housing. The bill requires the housing element to include an analysis of how the jurisdiction’s inventory of housing affirmatively furthers fair housing; requires that in assessing contributing factors to fair housing issues, jurisdictions look through both a local and a regional lens, take race into account, and examine historical context; and requires jurisdictions to state explicit goals, objectives, and policies related to affirmatively furthering fair housing. 

SB 91 – Expanded protections provided by AB 3088 (2020) and established a statewide rental relief program that pays up to 100% of arrears, prospective rent, and utilities for households experiencing COVID-19 financial hardships. The bill also extended a temporary halt on evictions for nonpayment of rent until June 2021. SB 91 prohibited landlords from charging or attempting to charge late fees and explicitly prohibits the sale or assignment of any unpaid COVID-19 rental debt. 

Did you get an eviction notice in California? Don’t leave yet. Follow these steps

“In California, the statewide eviction moratorium ended September 30. That means starting this month, landlords can issue eviction notices for nonpayments. Those notices are typically issued as a three day, pay or quit notice both nailed to the door and sent via mail, according to Tina Rosales, an attorney and policy advocate with the Western Center on Law and Poverty. “We are getting an uptick in nonpayment of rent evictions, and those are three-day evictions to pay the rent or to leave,” Rosales said.”

Read More

 

Victory for COVID Tenant Protections in Los Angeles

In an opinion issued last week, the Ninth Circuit Court of Appeals upheld the City of Los Angeles’ COVID-related tenant protections and affirmed the City’s ability to protect tenants from becoming unhoused during a pandemic that has claimed over 600,000 lives in the United States.

The Apartment Association of Greater Los Angeles filed a lawsuit in federal court to challenge, on constitutional grounds, the city’s ability to enact COVID-related tenant protections during the local emergency period: one barring evictions for nonpayment of rent or certain lease violations for COVID-related reasons and one barring rent increases for rent control units.

Western Center, along with Public Counsel, The Public Interest Law Project, and Susman Godfrey LLP, represent two tenants’ rights organizations, ACCE Action and Strategic Action for a Just Economy (SAJE), who successfully intervened in the lawsuit to help defend the ordinances. Since the lawsuit was filed, California enacted rental protections, recently extended by AB 832, which overlap significantly with the eviction protection ordinance. While state law goes further to protect tenants in some ways, the City’s ordinance goes further in others.

After United States District Court Judge Dean Pregerson denied the Apartment Association’s motion to stop the ordinances, the Association appealed to the Ninth Circuit, arguing that the ordinances interfered with contracts between individual landlords and tenants, and that the City’s actions were unreasonable.

Ultimately, the Ninth Circuit panel stated, “the district court did not err in determining that the moratorium’s provisions were reasonable and appropriate given the circumstances of the COVID-19 pandemic,” as “[t]he City fairly ties the moratorium to its stated goal of preventing displacement from homes, which the City reasonably explains can exacerbate the public health-related problems stemming from the COVID-19 pandemic.”

The ordinances do not “cancel” rental obligations – tenants are still on the hook for rent, but they can’t be evicted for nonpayment while the ordinance is in effect. The Apartment Association argued that delayed payment bolstered its Contracts Clause claim. The Court rejected that argument, stating, “[T]here is no apparent ironclad constitutional rule that eviction moratoria pass Contracts Clause scrutiny only if rent is paid during the period of the moratoria[.]”

Additionally, noting the establishment of federal, state, and local rental relief programs, the Court stated that the existence of such programs “further undermine AAGLA’s Contracts Clause challenge.”

This lawsuit is one of many that landlords have filed to challenge emergency eviction protections across the country. In fact, a landlords’ challenge to the Centers for Disease Control (CDC)’s Temporary Protection from Eviction was reviewed by the United States Supreme Court, which issued a ruling on August 26th stating that the CDC exceeded its authority, and therefore suspended the Temporary Protection.

While we disagree with the Supreme Court’s ruling for the reasons stated in Justice Breyer’s dissent, it is important to note that the Supreme Court’s majority did not invalidate local and state eviction protections. This decision does not impact California’s state-wide protections or locally enacted tenant protections, including in the City of Los Angeles, which remain in effect.

Landlord challenges to eviction protections continue, even as we face a deadly surge in COVID-19 cases due to the Delta variant. We hope more landlords and associated entities will shift their energy toward the government agencies tasked with distributing rental relief, and advocate to ensure the funds are being made available to stabilize both tenants and landlords, rather than forcing struggling renters out and onto the streets.