June 5, 2023

SAJE and other tenants rights advocates have reached a landmark settlement in our lawsuit against the California Department of Housing & Community Development (HCD) over their administration of the Emergency Rental Assistance Program (ERAP). ERAP was created to provide direct financial assistance to low-income families struggling to pay rent during the pandemic. SAJE, together with the Alliance of Californians for Community Empowerment (ACCE Action) and PolicyLink—represented by Western Center on Law & Poverty, Public Counsel, the Legal Aid Foundation of Los Angeles, and Covington & Burling LLP—sued the HCD in June 2022 over several systemic failures in the program, including a confusing application process that led eligible tenants to be wrongfully denied.

At the start of the pandemic, California identified more than $6 billion in rental assistance from the state and federal government for the Housing is Key program, which should have made a profound difference for the hundreds of thousands of families impacted by the economic fallout. More than half a million households applied to the program. Thus far, HCD has denied nearly 30 percent of applicants. The vast majority of those denied (93 percent) have incomes below 80 percent of the area median income—the threshold for program eligibility. 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.”

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. This 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.

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.”

Rent debt across California remains at crisis levels: an estimated 688,000 households across the state remain behind on rent. 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.

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