California’s Covid rent relief fund may soon run out of cash

California’s $5.2 billion rent relief fund is nearly broke.

The Covid relief fund, mired in delays, criticism and a lawsuit, may soon run out of cash, the nonprofit CalMatters reported via the Long Beach Post.

That might leave in the lurch more than 100,000 renters still awaiting help from a program that stopped taking applications more than a year ago.

News of a potential shortfall came 22 months ago. Another warning sign came last month in an email from a staffer with the state Housing & Community Development Department, sent to lawyers from anti-poverty groups.

“As of July 31, 2023, the program had $128,940,473 in funding left for disbursement to applicants,” the staffer wrote in the email shared with CalMatters, noting the next round of payments would assist 5,521 households. 

But any money leftover, the staffer said, “is unlikely to add enough funds to the remaining balance to support more than one additional” payment.

Housing department spokesman Pablo Espinoza said the program still has cash — for now.

“The fact is that this was always meant to be a temporary emergency program, and funding is not infinite,” Espinoza said in a statement. “It is unclear whether there will be sufficient funding to pay all eligible applicants.”

The apparent shortfall contradicts prior assertions made by the department.

In March last year, Nur Kausar, then a spokeswoman for the state housing department, told CalMatters the program would “continue to operate until all complete applications received are processed and all eligible applicants have been paid.”

“All eligible applications received on or before March 31, 2022, for rent or utilities owed between April 1, 2020 through March 31, 2022, will be paid,” added a statement on the program website, since removed but stored on Internet Archive’s Wayback Machine.

The program was launched to help struggling tenants cover rental debt from the dawn of the pandemic to March 2022. In the 19 months since, the housing department has struggled to work through a backlog of unaddressed applicants and unresolved rejection appeals.

Some 92,700 residents still await a decision on their request for financial help, with nearly 34,800 having appealed a rejection. 

The state’s relief fund is closing out its accounts as the last Covid-era moratoria on evictions expire across the state. In Los Angeles and Alameda County, that has led to a spike in eviction cases, according to the Los Angeles Times and The Oaklandside.

— Dana Bartholomew

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