In This State, Only 1 in 6 Tenants Who Applied for Rent Relief Has Received Aid
- California was given $5.2 billion in rent relief funds to disburse to residents.
- So far, only one in six tenants who applied for aid has actually seen that money come in.
The process of rolling out rental assistance hasn't gone smoothly in some parts of the country.
When the COVID-19 outbreak first erupted, millions of Americans found themselves unemployed within weeks. Those without money in savings quickly fell behind on their bills, including housing payments.
Recognizing the potential for a mass homelessness crisis, lawmakers put an eviction ban into place, barring landlords from kicking tenants out on the basis of not paying rent. But that ban expired last year, and since then, many renters have, in fact, risked homelessness.
The good news is that the last two stimulus bills that were signed into law allocated over $45 billion in rent relief funds to help tenants catch up on past-due payments and avoid losing their homes. Those funds were then distributed at the state level, putting the burden of rolling out rent relief programs on states themselves.
But some states have done a better job than others in doling out aid. In California, the process has been almost unbearably slow.
California tenants are still waiting for help
While the federal moratorium on evictions expired last year, many California cities extended eviction protections through March 31, 2021. But those protections are about to expire -- at a time when most tenants who have applied for rental assistance have yet to receive aid.
California was given $5.2 billion in rent relief funds to give out to residents. But on a statewide level, only one out of every six rental assistance applicants has actually received assistance.
In fact, the typical wait time to receive rent relief funds following an application has been four to six months, according to a new analysis of the state's rent relief program by the National Equity Atlas. At this point, time is running out to get that money distributed.
Researchers estimate that California tenants owe a collective $3.3 billion in past-due rent since the start of the pandemic. As of January, tenants had applied for over $6.9 billion in relief -- but most have yet to receive a response to their applications or funds to cover their unpaid rent.
What's the holdup?
California housing officials claim that part of the reason for delayed rent relief funds boils down to having to vet many applications and take extra steps to prevent fraud. As it is, the state has lost an estimated $20 billion to fraudulent unemployment claims, and understandably, it's not looking for a repeat.
But still, if rent relief funds aren't distributed soon, many California tenants could end up on the street. Landlords could end up in a tough spot, too.
Earlier on in the pandemic, mortgage borrowers were given the option to put their home loans into forbearance for up to 18 months. But that protection has long run out for those who went into forbearance at the start of the pandemic. And now, mom-and-pop landlords risk missing upcoming mortgage payments if they're unable to collect past-due rent.
What’s more, eviction isn't necessarily a route landlords want to take. It can be costly and time-consuming, and ultimately leaves landlords with vacancies on their hands. A better solution would be for California to expedite the disbursement of rent relief funds so tenants can get caught up and stay in their homes, and mom and pop landlords can move forward with their own personal recovery.
Alert: highest cash back card we've seen now has 0% intro APR until nearly 2025
If you're using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.
In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.
Our Research Expert
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2023 The Ascent. All rights reserved.