With Governor Gavin Newsom pledging $5.2 billion in rent relief, and Mayor London Breed announcing $90 million in San Francisco’s own relief program, it would seem that San Francisco’s tenants and landlords should be in good shape. Yet, less than one month before the eviction moratorium ends, little federal, state or city rent relief has landed in tenants’ and landlords’ pockets. And whether the relief will ultimately be enough to help everyone who needs it is far from certain.
Between state and local programs, San Francisco tenants and landlords may be eligible for between $111 million and $121 million in relief. But varying estimates of demand, a complicated patchwork of programs, and “shadow debt”—debt accrued by those who paid rent or other basic expenses using credit or savings—are raising concerns that some individuals may wind up falling through the cracks unless the state extends its eviction moratorium and broadens eligibility for aid.
How Much Relief Is Needed?
Whether there’s enough money to meet the need won’t be clear until both the State and City programs are up and running, according to public officials. The City’s program opened on May 28, while the State’s has been accepting applications since March 15.
In order to avoid duplication, the City’s program will only pay for rent debt accrued since April 2021, while the state’s program is intended for debt accrued between April 2020 and March 2021. That creates complications in estimating the total debt burden, along with a possible misalignment of state and local funds.
According to Russ Heimerich, a spokesperson for California’s rent relief program, 2,690 San Francisco residents have requested about $38 million in state aid so far. Another 1,420 tenants and landlords are in the process of applying. Assuming the latter are carrying roughly the same rent debt, those applications would total another $20.5 million in relief. That’s a total of 4,110 San Francisco tenants and landlords requesting $58.5 million as of last week, already exceeding the amount the state is currently expected to allocate to San Francisco.
It’s also far fewer applicants than might be expected. Last October, San Francisco’s legislative analyst estimated that between 13,765 and 33,200 renter households have unpaid rent due to the pandemic. Estimates by the Bay Area Equity Atlas (BAEA), a research firm, are close to the high end of the City’s estimates: It estimates that more than 37,000 San Francisco households owe a total of $178 million in rent debt.
Because the City’s program covers fewer months, and only those months since economic recovery began, it’s possible that there will be insufficient funds in the state’s program and excess in the local program. Policymakers may have more work to do to figure out how to resolve that funding imbalance.
”The federal legislation that allocated this rent relief funding determined how much the state received and how much individual cities received. So, there isn't much flexibility in terms of adjusting that funding if there is an imbalance,” said Kwart.
Heimerich added that if an imbalance exists, the state will work with San Francisco to figure out a solution.
Complex Program Requirements
Meanwhile, some tenants and landlords are growing frustrated with the application process.
“The various agencies have badly mishandled rent relief,” said Noni Richen, president of the Small Property Owners of San Francisco (SPOSF), whose members typically own six units or fewer and often live on the property. “Each level of government has created a different set of hoops for owners and renters, each setting limits and demands, such as forgiveness of partial rents and limiting access to the courts for unpaid rents.”
Many tenants, too, have found the application process cumbersome, citing technological and language barriers in surveys. Enough San Francisco residents complained about the State’s process that the Board of Supervisors passed a resolution calling on the Governor and the State Department of Housing and Community Development, which administers the State’s rent relief program, to address language barriers, expand accessibility for those without internet access, and improve outreach.
The State is simplifying the application process to make it flow more smoothly: “We’re hoping to take a 90-minute (average) process and get it down to about half that time,” said Heimerich. Tenants will need less documentation, making it easier to report pandemic-related income loss and find expanded language options on application websites.
Gaps in Outreach
Tenants with pandemic-related unpaid rent or utilities whose household income is 80% or less of the Area Median Income (AMI) are eligible to apply to both the State and City programs. However, both the state and local programs are prioritizing low-income residents—those whose household income is at or below 50% AMI—for financial assistance. For San Franciscans, that’s a threshold of $46,650 for an individual or $66,650 for a family of four.
“Our outreach efforts are reaching the targeted populations,” Heimerich said, noting that about 93% of current applicants to the state’s program from San Francisco are low-income tenants.
Could it be that higher-income tenants don’t need the financial help? It appears that they might: As of March, BAEA estimates that one-third of San Francisco households with rent debt earned above $50,000 per year. Yet households above the 50% AMI threshold make up only 7% of current applicants to the State’s program, pointing to potential gaps in outreach.
“San Francisco is just getting their program off the ground and without the program in full operation, it is difficult to determine the depth of need,” said Heimerich.
‘Corporate’ Tenants May Opt Out
In addition to these complications, tenants of the City’s corporate landlords may opt not to apply to the rent relief programs at all.
The pandemic exacerbated existing issues between those landlords and their tenants. When the pandemic hit, the tenants’ associations of Veritas, Mosser and Ballast—three of the largest landlords in San Francisco—pressured their landlords for rent forgiveness. Following outrage over these large companies receiving PPP loans, Veritas offered a 50% rent reduction for four months. The Veritas Tenants Association declined, saying the deal would leave them drowning in debt.
In March, City Supervisors passed a resolution encouraging corporate landlords to forgo applying for limited public funds and to instead negotiate with tenants’ associations to cover rent debt using their own resources. To monitor whether these landlords comply, the City’s rent relief program plans to collect and track who the landlord is when tenants apply.
Risky as it may be, these tenant associations are encouraging members not to apply for public funds, and to prohibit their landlords from applying on their behalf, in the hopes that they can persuade their landlords to cover back rent.
“The tenants associations are trying to negotiate a rent relief agreement,” said Brad Hirn of Housing Rights of San Francisco, in an email. “Mosser, Ballast and Veritas tenants’ associations are all trying to get their landlords to comply with the resolution.”
“We are still holding out for Veritas to come to the table. As it stands now, we will opt out of the city program as well," said Libby Staub of the Veritas Tenants Association, "and I'm biting my fingernails off.”
Shadow Debt Looms
Relief programs currently in place apply only to those who haven’t paid full rent. That leaves out tenants accumulating “shadow debt,” or debt accumulated by those who prioritized paying rent over other expenses. Other renters may have moved to a cheaper home rather than accumulate debt. But moves cost, and those costs don’t qualify for reimbursement.
“I am very concerned about tenants who sacrificed everything to pay the rent but went into extreme debt,” Assemblymember David Chiu told Cal-Matters in April. “How we assist those individuals is something that (the new law) did not contemplate.”
Some help might be available from the City’s program: Because it pays for future rent, tenants who used loans to pay rent can recoup some costs. However, they won’t necessarily be prioritized, according to the City’s rent relief website. Heimerich added that the state’s program may reimburse shadow debt in the future, depending on the flexibility in upcoming federal guidance.
Shadow debt may be affecting some landlords, too, if they had to make up for lost revenue.
“When my tenants chose to move out, I was unable to re-rent the apartment although I showed it at least once a month at 20% less than the previous tenants paid,” wrote one landlord in an April survey of SPOSF members. Another reported that a tenant in their in-law apartment didn’t pay rent for eight months, while another apartment they manage rented for $500 less after sitting vacant for two months.
Bryant Phuong, who owns an eight-unit apartment building in the Tenderloin, is experiencing a similar situation: “One tenant skipped after 5 months of missed rent and disappeared, she owed us around $8500 in missed rent from April through September 2020,” he said. Because the programs require information from both the tenant and landlord, Phuong cannot apply for debt relief.
Phuong and one of his tenants applied to the State’s program on the first day it opened. The tenant owes $22,000 in missed rent from April 2020 through May 2021, and another month is due now.
“I applied for the CA Rent Relief Program on March 15, 2021...almost more than 65 days later, I still have not gotten any payment from the program. To be honest, this is taking too long!” said Phuong.
As of May 27, only four San Francisco applicants have been paid from the State’s program. They averaged about $18,600. The City’s program just opened, and will only accept applications initiated by tenants.
Tenants, too, can be locked out of the state’s program or left with debt if they can’t contact their landlord or are being harassed, tenant advocates said in an ABC News article.
Inequities in Financial Help
Some tenants may get more help than others, too.
Under the current state program, participating landlords will receive 80% of eligible tenants’ back rent but must forgive the remaining 20%. Those tenants are then rent debt-free. If a tenants’ landlord chooses not to participate, the tenant can apply but will only receive 25% of their rent debt.
Under the current eviction moratorium that ends June 30, landlords cannot legally evict a tenant who pays this portion of their rent. However, under current local law, landlords can file claims against tenants when the moratorium lifts.
For Assemblymember David Chiu, this inequity has been an ongoing concern: “All renters should receive the same level of rent relief,” he said in May in response to Governor Newsom’s proposal to pay 100% of back rent. That possibility is being discussed as part of the State’s budget process that’s now underway.
California’s Moratorium Cliff
With thousands of San Francisco households behind on rent, the stakes are high for the eviction moratorium which currently expires June 30. The state program has barely begun distributing funds, and the City’s program, which just opened, will take four to nine weeks after an application is submitted to distribute funds.
With the state’s moratorium expiring in just weeks, members of the San Francisco Board of Supervisors introduced two ordinances that would extend protections for nonpayment of rent: One, an emergency version, would remain in effect for two additional months, and another would extend protections until the end of the year. Supervisors will vote on that legislation in the coming weeks.
At the state level, policymakers may be left with little choice but to extend eviction protections, which could buy more time for existing relief programs to reach people in need. Lawm
"We expect the state moratorium to be extended,” said Charley Goss of the San Francisco Apartment Association. “We’re focused on ensuring that the rent relief programs are accessible and workable for small property owners and their tenants in need so that the rental debt can be eliminated, tenants can stay housed, and landlords can continue to maintain their properties and pay their property taxes and expenses."