This story is produced by the award-winning journalism nonprofit Capital & Main, and co-published here with permission.
Blake Phillips is pretty sure he did everything right, which makes it all the more baffling to the Los Angeles resident that he slowly went broke, lost his restaurant business and was eventually forced to move out of his home and in with friends.
He did all this while waiting for pandemic rental relief from the state of California, which, though promised and approved, has still not arrived.
“I went from being a small business owner, middle class, paying my bills, to being completely wiped out,” Phillips said. “I lost everything because of the rent program.”
The program in question was operated by the California Department of Housing and Community Development (HCD), and it was designed specifically to protect both renters and landlords during the worst of the COVID-19 emergency. As businesses were forced to close, rendering many workers jobless and suddenly behind on their payments, the Emergency Rental Assistance Program (ERAP) was created early in 2021 to fill the financial gaps.
To hear Gov. Gavin Newsom tell it a year later, ERAP went on to become “the largest and most successful eviction protection and rent relief program in the country.” The governor said that 340,000 California families had avoided eviction, “and the overwhelming majority of assistance went to very low-income households.”
But despite the more than $4.5 billion distributed from the fund, experiences like Phillips’ tell a different story about how that program worked—or didn’t. And as the details of a recent legal settlement make clear, the ERAP rollout was pockmarked by administrative foot-dragging, language barriers, cursory claim denials and other issues that have left a substantial number of vulnerable Californians on the outside looking in.
“Over 100,000 households are still waiting for decisions on their applications, many of whom have been getting served with evictions or getting harassed by their landlords because of their debt,” said Faizah Malik, an attorney with Public Counsel, which assisted with the lawsuit whose settlement was announced June 5.
Under the terms of the agreement, HCD will audit its past denials, improve multilingual access for applicants whose first language isn’t English, provide more details to those who were denied financial aid, and make available more data about the race and ethnicity of those who’ve been turned down.
Though the department did not admit fault, its remedial actions under the agreement substantially address the concerns raised by the tenant rights and anti-poverty groups that brought the lawsuit on behalf of what they said were 140,000 applicants who’d been denied relief. The state also agreed to pay $1.1 million in attorney fees for those groups.
“Providing relief to California renters and landlords affected by the COVID-19 pandemic has always been our priority,” said a statement emailed to Capital & Main by the HCD’s communications office. “Ultimately, the petitioners and HCD chose to settle the litigation to move the program forward with the shared goal of assisting Californians. We are committed to working with our partners to bring resolution and support to those remaining in the application pipeline.”
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From the start, ERAP, also known as Housing Is Key, was both promising and frustrating. For workers and business owners behind on their rent and landlords who weren’t being paid, the program looked like a lifeline—and for many, it was. Created in the spring of 2021, ERAP allowed eligible applicants to receive assistance for up to 18 months in the period between April 1, 2020, and March 31, 2022, when the program wound down.
By the state’s accounting, more than 360,000 California households were ultimately “served,” with an average financial assistance of $12,254. But tenant rights groups, including the Alliance of Californians for Community Empowerment (ACCE) and Strategic Actions for a Just Economy (SAJE), began discovering all sorts of problems—and they weren’t alone.
In September of 2021, just six months after the relief program began, the state’s own auditor found that HCD was so slow in processing cases and distributing money that it was in danger of forfeiting hundreds of millions of dollars in federal funds. The tenant rights groups, meanwhile, found curious patterns of applicant denials, often without clear reasons why.
By July of 2022, more than a year after launch, a study published by the National Equity Atlas found that almost 30 percent of the applicants to ERAP had been denied — yet 93 percent of those denied had incomes that made them eligible to receive the assistance. Many were given no detail about the reason they were rejected, nor about their recourse to appeal.
Those findings were the primary drivers of the lawsuit, which was filed about a year ago and alleged the state was unconstitutionally operating the program, leading to mass numbers of the state’s lowest-income residents either being denied relief or left in limbo, with no information to help them understand what was happening.
“What we were noticing were repeated issues that seemed to be leading to these wrongful denials,” said ACCE senior attorney Jackie Zaneri. “We were seeing tenants who were denied and could not figure out why. We saw tenants who were contacted in the wrong language, then denied because they did not respond. And this relief could be the difference between being housed and not having a safe place to live.”
Phillips had no language issues, but his other experiences squared with those of many other ERAP applicants. While maxing out his credit cards to stay afloat after being forced to close his restaurant, he applied for relief and then waited for months with no reply, eventually falling almost $40,000 in arrears on his rent. When he finally received a response, it was a denial of his application—but under a different name and sent to the wrong address.
Eventually, Phillips received a denial in his own name, appealed it and was approved for assistance. “I was assigned a case worker and had a dialogue for about a week, telling me it looked good,” he said during a video conference arranged by the tenants’ groups. “Now I’ve sat for a year under review. Needless to say, the program is awful.”
Under the settlement, HCD will go back into the files of those who’ve been denied, contact applicants by both email and snail mail to update them on their status, and communicate in the applicants’ preferred language. It’s not clear how many people will see relief or have pending cases resolved, but there is money left to distribute: According to a spokesman for the tenants’ groups, about $337 million remained in the fund as of the state’s last court filing in February.
“People have been waiting for so long for this relief,” said Madeline Howard, senior attorney at the Western Center on Law & Poverty, one of the groups that worked on the case. “We’re hoping that these notices will allow tenants to fix any real problems with their applications.”