California must grant all pending applications for rent relief while its denials are under review, judge rules

Since last spring, California has passed along federal aid to hundreds of thousands of low-income renters who faced debt and possible eviction because of the pandemic. But the state has also denied funds to nearly one-third of the applicants, sometimes with little explanation, and a judge has now ordered housing officials to grant all rental-assistance applications while the legality of their actions is under review.

Although it’s not clear yet whether the Department of Housing and Community Development has improperly rejected applications to the Emergency Rental Assistance Program, or failed to adequately explain its rejections, the hardships of any wrongdoing fall entirely on the renters rather than the state, Alameda County Superior Court Judge Frank Roesch said at a hearing Thursday.

Roesch said he would issue a preliminary injunction this week requiring the department to approve all pending requests for rental assistance, and all those that were denied less than 30 days ago, until he holds a hearing on whether the state’s procedures for reviewing the claims violate renters ‘ rights to fair treatment and a clear explanation of its decisions.

That hearing will probably take place in September, said attorney Lorraine Lopez of the Western Center on Law and Poverty, one of the organizations representing the renters. During the interim, Lopez and her colleagues said, nearly 100,000 households will be entitled to rental benefits without interference by the department.

California received $5.2 billion from the federal Emergency Rental Assistance Program in March 2021 to protect tenants whose incomes were 20% or more below average and whose jobs and finances were being slashed by COVID-19. So far, the state says, it has granted applications from 342,000 households and paid them an average of $11,800 in aid since the start of the assistance period.

But Lopez said Housing and Community Development has also denied 161,000 applicants and often left them in the dark about where they stood.

“They told you that you could appeal, but didn’t say what you could appeal,” she said. “They often weren’t told why they were denied, who was deciding the appeal or how long it would take.”

According to a lawsuit filed by renter advocates last month, the state’s notices of denial were generally vague — asserting, for example, that the applicant had submitted “inconsistent or unverifiable information” — and failed to spell out the reasons, cite any supporting documents or describe the appeal process. The suit said there had been a “dramatic increase” in denials this April, which the department has failed to explain.

“Over the past few months, I’ve worked with hundreds of tenants who received a denial with little to no explanation and are terrified about losing their homes,” said Patricia Mendoza, an organizer with Alliance of Californians for Community Empowerment, an advocate for the renters.”I’m just so relieved to see the judge take action to address this problem.”

The program has had other shortcomings affecting low-income renters. As The Chronicle reported last August, during the first four months that aid was available, state and local programs in the Bay Area paid just $88.5 million in a region where the federal government had allocated $889 million.

And despite an official statewide ban on tenant evictions during much of the pandemic, court officials reported that nearly 36,000 eviction suits were filed in California between July 2020 and June 2021.

While Roesch has not decided whether the state violated tenants’ rights, he was openly skeptical of an argument by a lawyer for the Department of Housing and Community Development that it was not required to show a tenant the documents or other evidence that justified denying rental aid .

“What do you mean, they don’t need to see the documents?” the judge asked at Thursday’s hearing. “If they want to file an appeal of the denial, shouldn’t they see the evidence?”

The state’s lawyer, Deputy Attorney General Jackie Vu, replied that the department identified the relevant law, which tenants could look up on their own, but could not release documents provided by property owners because that would open the door to possible fraud.

In response to Roesch’s order, Nurulain Kausar, a spokeswoman for Housing and Community Development, said, “We stand by the work we have done to keep more than 340,000 low-income households – over 700,000 Californians – stably housed through the CA COVID-19 Rent Relief Program and will continue to do what we can to support Californians in need of assistance. We are disappointed by the court’s ruling and will continue to defend California’s COVID-19 Rent Relief program.”

Chronicle staff writer Lauren Hepler contributed to this report.

Bob Egelko is a San Francisco Chronicle staff writer. Email: begelko@sfchronicle.com Twitter: @BobEgelko

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