Red Tape and ‘Shadow Debt’ Are Stalling Relief Efforts for California Renters

Elizabeth has been waiting for her Covid-19 rent relief application to be processed since she applied at the beginning of May.

A month after she sent in her application, she received a letter saying she was missing necessary documents, and her application was on hold. For the past two weeks, Elizabeth has been trying to contact someone working at Housing is Key, the state program that processes rent relief applications, or local nonprofits helping tenants fill out forms.

“At this point, we are prioritizing rent over other things. Since May, I have been paying rent in full, and so in May, June and July we had to ask our family members to borrow money,” says Elizabeth, who requested her last name be withheld for privacy.

Now, the 34-year-old is in limbo, unsure if she qualifies for assistance. “It’s a very scary place to be,” she says.

Over a year after losing their jobs to pandemic-related causes, Elizabeth remains unemployed, and her husband, a landscaper, is only able to get work once a week. Elizabeth says she knows her family, theoretically, qualifies for the Covid-19 rent relief: they are below 80% of the Area Median Income and experienced financial hardships due to the pandemic.

But Elizabeth says she can’t afford to rely on theoretical assistance. With a family of five, including a 1 year old, her primary concern is staying housed—even if it means cutting back on other essentials to pay rent.

“I have cut back on food, my internet, PG&E,” she says.

The state’s first eviction moratorium was crafted as Senate Bill 91 in January 2021, with the goal of distributing funds to California renters experiencing pandemic-induced financial loss. California Gov. Gavin Newsom later signed AB 832 on June 28, along with an executive order extending California’s eviction moratorium through Sept. 31.

The updated bill attempts to correct gaps that excluded certain renters from the first round of applications. For instance, the new bill allows tenants with informal leases to qualify, 100% of back-rent forgiveness, up to three months of future rent, requires either the tenant or the landlord to apply and distributes hundreds of thousands of dollars to local community organizations to help facilitate in-person assistance and outreach—a critical component, given the application must be submitted online.

However, limited digital accessibility remains a critical barrier in discouraging applicants.

Santa Clara County currently has a C+ grade on its California Broadband Infrastructure Report Card, leaving nearly 57,000 households without access to adequate internet—primarily, low-income and minority households.

Minority households are also the most in need of rental assistance: in Santa Clara County, the Latinx population accounts for half of all Covid-19 cases, and statewide the Latinx population accounts for 40% of Covid-19 rent relief applicants.

Even with recent local efforts to bridge the digital divide, and AB 832’s increased assistance for those with less access to digital resources, Elizabeth thinks having an online application remains the biggest deterrent to the new bill.

“The hardest part of the application was the online system,” she says. “I know a lot of people who know about this program. But they couldn’t apply [to SB 91], because they weren’t able to do it online.”

This obstacle was taken into account when awarding funding to local organizations, says Housing and Community Development Specialist Jessica Hayes, who helped draft AB 832.

“Now applicants can also just call the list of partners, who will actually come to a person’s house and sit with them and complete the application online right there,” says Hayes.

But that’s not the only obstacle tenants face: months-long processing times, which can force applicants to choose between falling behind on rent while they wait to qualify for assistance, or trying to find a way to continue paying.

Hayes says there are multiple reasons for the massive delays, including building out fraud and duplication protection, establishing a secure auditing process, and the system of prioritization based on income and risk of eviction applied to each application.

“We’re hopeful that, in the next couple of weeks, we should be through all of those older applications,” says Hayes. “Our target is to get within a two-to-four-week turnaround time.”

This practice of borrowing money in order to pay rent creates what has been coined “shadow debt,” and refers to rent-adjacent debt tenants accrue when prioritizing paying rent.

Elizabeth and her husband are $5,700 in debt to family and friends, a debt they accrued to keep their family housed.

“We went from having three incomes to having nothing,” says Elizabeth.

Initially, Elizabeth was unaware of the eviction moratorium Newsom signed on March 27, 2020. With limited access to the internet and no outreach from local or state organizations, her family was left in the dark about the order and rental assistance opportunities.

Even though Elizabeth is aware of the moratorium now, she doesn’t want to put her relationship with her landlord in jeopardy. And without a guarantee her application for rent relief would be processed, she would rather incur debt with family than risk her housing situation.

“[When I applied for rent relief], I was unsure about qualifying for the program because a lot of the requirements were so hard,” she says.

Hayes says the state attempted to account for shadow debt by incorporating the chance for future rent coverage and receiving aid for utility arrears.

“We can help pay future rents in three-month chunks now, that would give renters some relief in their personal budget to pay that debt they’ve incurred,” Hayes says.

But as far as accounting for debt accrued via credit cards, or informally with family and friends?

“It’s really, really hard to address that debt once it has become removed from the original payment. So we’re continuing to have conversations with that at the federal level, but I don’t honestly foresee, in the immediate future, any sort of solution,” Hayes says.

The important thing, Hayes stresses, is if tenants think they might be eligible for rental assistance, to apply: “If folks feel like they need assistance to apply for it, and really put it on us to evaluate that application.”

Covid-19 rent relief resources can be found at or 1-833-430-2122 between 7am-7pm, as well as Santa Clara County’s Office of Supportive Housing, 211 Bay Area and Silicon Valley Strong.


  1. In other words, it may be red tape in the bureaucracies that create some homelessness? Remember that one of the most feared sentences known to man is, “We’re from the government, and we are here to help.”

    The moratoria will do harm to thousands of renters and landlords. When you interfere with private contracts with unbalances and blind to reality programs, you cannot help but create bigger problems.

  2. What an absolute joke.

    All these performative activists, quote machines, bureaucrats, and ngo grifters endlessly rant and rave about people being selfish and they are sitting on $47B without a clue on what to do with it, other than build out their nests.

    Where is Sandy Perry for a quote on evil landlords?

    Where is Mother Cartwright with the tombstones?

    Where are the NGO CEOs begging for yet more billions.

    We told you watch the gozintas and gozoutas and be amazed. From the looks of this – duplication analysis systems and secure auditing processes sounds like a Consultant, Compliance Lawyer and SW salesman’s boondoggle of a lifetime all while the most vulnerable borrow from their equally vulnerable friends and family and lose sleep when their is an invisible wall between them and their relief. We told you this money would go to People of Letters and not People of Color, because thats all the state of California can manage by design. How many heads have been added, how mand managers to handle those heads and liasons and compliances. Its a joke and now you want them to be your landlord? Sit and ponder how many ways that would suck.

    Hats off to this woman and her family for not buying into the false hope of utopian progressive government.

    Hats off to all the landlords housing the families who got suckered by Democrat False Hopes and have been carrying tenants for 18+ months.

    To all you grifters bleeding off the good will of the American and Californian taxpayer. Shame on you, shame on you, shame on you. How can you look your children in the eye knowing you are so thoroughly corrupt?

  3. Our Democrat Government establishment is like a big, fancy, exclusive Club. You gotta know somebody to get in and perks only accrue to Club members. If you weren’t already a Club member before this Covid thing came along then good luck ever getting noticed let alone collecting any benefits.
    Talk about systemic discrimination. Jim Crow’s a pipsqueak compared to the Democrat Party.

  4. The fraud from this boondoggled flushing of taxpayers money down the toilet will make the EDD unemployment fraud look like peanuts.

    How about we just let everyone go back to work and pay their bills? We can’t just print money and have everyone staying home forever. The 30% inflation we’ve seen so far this year is a warning. If we print the $5 trillion additional money the government wants to print for other feelgood causes inflation will likely be closer to 60% next year.

  5. Can someone tell Goldy’s employer that ALL CAPS blocks everyone from reading what he’s written? I just scroll past his posts now as I’d imagine everyone else does too. There’s nothing written there of any value anyway and the ALL CAPS font make it even more painful to read. The fact that he replies to everyone is evidence that he’s paid for his posts.

    Goldy: Do you work out of India or China?

  6. Steve, I might read at least some of your posts if you weren’t using caps. But seriously, they are hard on my eyes.

  7. XBR976, as the saying goes… You can lead a horse to water, but… his posts get a glance or a skim..
    Posting a Manifesto Type reply in all CAPS? – IDIOTIC…
    Maybe he can refer to the link below..
    All-caps might look cool to you, but experienced users will Write You Off as an IDIOT.

    It’s okay to use all-caps for headings and/or titles in your messages, or even to EMPHASIZE certain words, but anything beyond that is equivalent to screaming at someone.”

  8. Thank you very much. This is extremely valuable stuff, in my opinion. I understand how critical it is to be able to handle one’s finances. I’ve experienced significant financial difficulties in the past. To finance the fees, I used loans like lendup services. Following these occurrences, I make it a point to save money just in case. Now all I have to do is study management so that I may be as efficient as possible

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