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 housing.ca.gov 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.

14 Comments

  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. WHAT IS NOT REPORTED IS THAT LANDLORDS ARE ACTIVELY PREVENTING FUNDS FROM BEING DELIVERED.

    MY CASE WAS APPPROVED IN APRIL. THE PROGRAM INDICATES THAT MY LANDLORD WAS GIVEN NOTICE IN JUNE AND EMAILED IN JULY, BUT REFUSES TO RESPOND.

    THIS HAS BEEN WHAT HAS HAPPENED IN THE STATE OF CALIFORNIA. WHAT IS REALLY BAD IS THAT THE PROGRAM GIVES 100% OF THE RENT TO A LANDLORD WHEN APPROVED. SO THERE IS NO EXCUSE FOR THIS ACTION OTHER THAN FALSELY MAKING A RECORD OF NON-PAYMENT OF RENTS.

    BUT ALL OF YOU KNOW THIS, AND YOU TRY TO CONSTANTLY INSULT YOUR CUSTOMERS. RENTER ARE CUSTOMERS AND NOT EMPLOYEES OF A LANDLORD. THIS CONSTANT INSULTING AND WORSE IN MY CASE AN ATTEMPTED HEARSAY, PERJURY, AND DEFAMATION IN A LEGAL PROCEEDING WAS NOT LOST BY A HEARING OFFICER. ESPECIALLY FROM OF ALL THINGS A CITY EMPLOYEE.

    IN THE END YOU ALL JUST DON’T EVEN UNDERSTAND THE BASIC 2 RULES OF BUSINESS.

    RULE #1 THE CUSTOMER IS ALWAYYS RIGHT.

    RULE #2, IN THE CASE OF THE CUSTOMER BEING WRONG REFER TO RULE #1.

    ALL YOU ARE DOING IS MAKING THE ECONOMICE FOUNDATION OF CALIFORNIA MUCH MORE WEAK, SO THAT RECOVERY WILL TAKE YEARS LONGER.

    TOO BAD YOU DON’T HAVE THAT EDUCATION.

  5. I’ll have to concede a point to Mr. Goldstein.

    Rent relief should not be and should never have been at the discretion of landlords, ever. That was a slimy “too clever by half” trick played by Governor Newsom to force landlords to accept a discount. It has lead to many problems and much confusion, predictably. This should always have been something the tenant applied for and the landlord solicited only to verify tenancy and magnitude of debt. And of course bank routing and account information too.

    This very likely could be illegally used as an end around of causa justa, which is a shame, because the “activists” (griftivists) will just use any attempt of said end around as justification to pass more ordinances. And the shame is that those ordinances will disproportionally hurt poor tenants, as they always do, to the tangible benefit of some savvy, yet unscrupulous landlords.

    If you don’t like causa justa, fine I understand and sympathize with you. You don’t like your tenants? Get over it or get a property manager. However, there are plenty of states and markets causa justa does not hold and you are free to end the tenancy when the lease terms out like all other contracts. If you really can’t stand CJ, you should do what many many landlords have done and exchange your properties to regions which have different tenancy regimes. But it is the law and you had your chance for years to get out from under it. You’ve got no one to blame but yourself. Now take the rent relief and move on to the next project.

  6. 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.

  7. NOT HIM You wrote:

    “Rent relief should not be and should never have been at the discretion of landlords, ever. That was a slimy “too clever by half” trick played by Governor Newsom to force landlords to accept a discount. It has lead to many problems and much confusion, predictably. This should always have been something the tenant applied for and the landlord solicited only to verify tenancy and magnitude of debt. And of course bank routing and account information too.”

    ACTUALLY I HATE TO CORRECT YOU AGAIN, BUT SB91 REQUIRED RELIEF BENEFICIARIES TO PAY 25% OF THEIR LAWFUL RENT, THE STATE WOULD HAVE PROVIDED ANOTHER 80% THUS RESULTING IN A 105% COLLECTED RENT. THE FACT THAT LANDLORDS DID NOT TAKE ADVANTAGE OF THAT RESULTED IN THE NEW RELIEF THAT PROVIDES ONLY 100%. BUT WHAT’S WORSE IS THE LANDLORDS WILL HAVE TO PAY BACK THE TENANTS THE 25% THEY COLLECTED UNDER SB91. IN EFFECT THE LANDLORDS SHOT THEMSELVES IN THE FOOT.

  8. JOE SMITH You wrote:

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

    BUT HERE YOU GO AGAIN, YOU ARE SAYING YOU WANT TO PUNISH THE LEGITIMATE AND NON-FRAUDULENT BENEFICIARIES FOR THE ACTS OF OTHERS, RIGHT? THAT IS FOOLISH AND IS THE FALSE PREMISE FROM YOUR COMMENTS FROM THE BEGINNING. IN EFFECT YOU WANT TO PUNISH THE INNOCENT FOR WHAT THE GUILTY HAVE DONE, CRAZY!!!! You wrote:

    “How about we just let everyone go back to work and pay their bills?”

    THEY CAN’T GO BACK TO WORK BECAUSE THE EMPLOYERS DON’T WANT THEM BACK AND PAY THEM THE WAGES WORKERS WILL NEED TO PREPARE FOR THE NEXT PANDEMIC. WHICH IS EXACTLY WHY SO MANY ARE DEMANDING BETTER TREATMENT. WHAT YOU ARE TELLING THE WORKERS IS THAT THEY MUST GO BACK TO SLAVE WAGES, POOR WORK ENVIRONMENTS, UNDER STILL UNSAFE WORKING CONDITIONS, AND HAVE NO CHOICE ABOUT IT. RIGHT? You wrote:

    “We can’t just print money and have everyone staying home forever.”

    WE DON’T “PRINT” MONEY ANYMORE, THE REALITY IS THE U.S. DOLLAR IS NOW ACTUALLY A VIRTUAL CURRENCY, DO YOU THINK THERE ARE 600 TRILLION DOLLARS IN PRINT, THAT IS THE VALUE OF THE DERIVATIVES MARKET. You wrote:

    “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.”

    NOW IF EVERYONE IS GETTING A PROPORTIONAL WAGE INCREASE, IN OTHER WORDS PEOPLE GETTING PAID A FAIR WAGE, THEN IT WOULD NOT MATTER THE INFLATION RATES, EXCEPT TO THOSE THAT ARE THE “LENDER” CLASS BECAUSE PEOPLE WILL BORROW LESS AND MAKE THE LENDING BUSINESS TAKE A PAY CUT, A SERIOUS ONE.

  9. 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?

  10. JOE SMITH You wrote:

    “Can someone tell Goldy’s employer that ALL CAPS blocks everyone from reading what he’s written?”

    MY EMPLOYER IS THE UNITED STATES OF AMAERICA AS A CITIZEN I HAVE A JOB TO PONT OUT HOW ERRONEOUS SO MANY COMMENTS MADE HERE ARE IN EFFECT NOT SUBSTANTIATED BY EVIDENCE. AS A PERSON THAT GRADUATED HIGH SCHOOL UNDER THE REAGAN ADMINSTRATION You wrote:

    “I just scroll past his posts now as I’d imagine everyone else does too.”

    YOUR CHOICE, BUT IT DOESN’T MEAN MY INFORMATION IS INACCURATE OR SUPPORTED BY EVIDENCE. INSTEAD YOU ARE JUST THE CURRENT GENERATION OF “ARCHIE BUNKER”. OF COURSE WHEN YOU HAVE NO EVIDENCE TO SUPPORT YUORSELF, YOU PERSONALLY ATTACK THE PERSON WITH THE EVIDENCE SUPPORTING THEM. You wrote:

    “There’s nothing written there of any value anyway and the ALL CAPS font make it even more painful to read.”

    AGAIN, INSTEAD OF DEALING WITH THE CONTENT, PROVIDING ANY EVIDENCE TO SUPPORT YOUR COMPLETELY FICTIONAL OBSERVATIONS AND CLAIMS, YOU TRY TO MAKE IT A PERSONALITY CONTEST. I DON’T PLAY THAT GAME, AND THE READERS HERE DESERVE BETTER. You wrote:

    “The fact that he replies to everyone is evidence that he’s paid for his posts.”

    ACTUALLY, THE REAL PROBLEM IS THAT PEOPLE LIKE YOURSELF HAVE MADE IT SO THAT SOMEONE HAS TO STOP THE POLLUTION OF MISINFORMATION IN THE INTERNET. THE FACT THAT FORUMS LIKE THIS DO NOT MODERATE REGARDING AT THE VERY LEAST FLAGGING POTENTIAL OR PROVABLE MISINFORMATION. I JUST SO HAPPEN TO BE ONE IN THIS AREA WILLING TO DO SO. I KNOW THERE ARE MANY OTHERS ALL OVER THE COUNTRY. You wrote:

    “Goldy: Do you work out of India or China?”

    STUPID QUESTION YOU KNOW WHERE I LIVE BECAUSE MY PUBLIC INFORMATION AND USING MY REAL NAME SHOWS WHERE I AM. IN FACT, USING THE NAME “GOLDY” INDICATES YOU ACTUALLY KNOW MY EMAIL ADDRESS AND THUS YOU KNOW WHO I AM. BUT YOU USE A “FAKE” NAME AND ARE INTENTIONALLY DISGUISING YOURSELF SO THAT YOU DON’T GET THE PROPER SCRUTINY YOU DESERVE.

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

  12. XBR976

    LAME EXCUSE!!!! IT IS EASIER TO READ CAPS THEN LOWER CASE IN FACT!!! THAT IS WHY EYE EXAM TABLES ARE IN ALL CAPS!!!

    STICK TO THE SUBJECT, WHAT DID YOU WANT TO DISCUSS?

  13. 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..
    https://www.writerswrite.com/journal/e-mail-etiquette-netiquette-12995
    “ONE OF THE BIGGEST MISTAKES PEOPLE MAKE IS TO TYPE WITH THEIR CAPS LOCK ON.
    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.”

  14. CA PATRIOT,

    I AM EMPHASIZING ALL MY COMMENTS TO EASILY SEPERATE THEM FROM THE INFORMATION I QUOTE. IN ANY EVENT JUST ANOTHER TRIVIAL REASON TO CRITICIZE THE FORM BUT NOT THE CONTENT OF THE INFORAMTION.

    TOO BAD YOU ALL ARE SO ILL INFORMED

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