In late December 2020, the federal Consolidated Appropriations Act of 2021 was approved and, among its many provisions, created a $25 billion Emergency Rental Assistance program for low-income and distressed renters experiencing housing insecurity during the COVID-19 pandemic. While the U.S. Treasury entitled local jurisdictions with populations over 200,000 with direct payments to assist low-income tenants with rent and utilities, lower population cities and counties were again reliant upon the state to provide these dollars to non-qualifying jurisdictions.
In the Governor’s 2021-22 proposed Budget, California estimated it would receive $2.6 billion total in funding, of which $1.1 billion would be directly allocated from the Federal government to larger jurisdictions. RCRC responded to the proposed Budget to urge the state to address the inequity between distressed households in rural areas versus urban ones by providing funding directly to smaller jurisdictions. A recent state audit, published that same day, acknowledged the funding formula devised by the Newsom Administration disadvantaged smaller counties out of receiving their fair share of federal Coronavirus Relief Funds. In fact, rural and suburban counties received nearly half the funds of their urban counterparts to equally respond to public health and safety issues generated by the COVID-19 pandemic.
On Monday, Governor Newsom announced a deal with Legislative Leaders on extending the state Eviction Moratorium that was set to expire on January 31, 2021, as well as 1) create a $1.5 billion State Rental Assistance Program through the Department of Housing and Community Development to provide larger jurisdictions additional block grant funding, and 2) set aside $150 million for tenant relief in the remaining thirty smaller counties. Smaller counties, and mid-size localities (cities and counties with populations between 200,000 to 499,999) that do not receive block grants from the state, would have their funding allocations administered by a third party contracted by the state Department and would not be managed directly by these local governments.
During committee deliberations, Assembly Member Jim Wood (D-Sonoma), was particularly interested in providing equity to smaller counties and ensuring rural areas do not get shortchanged on a per capita basis. According to testimony by the Department of Finance, the $150 million set aside for rental relief in smaller counties is double the amount that would have been otherwise available with a population-based formula. Assembly Member Wood expressed a healthy dose of skepticism and argued for the Administration to be held accountable for its ability to reach low-income residents in smaller counties, which often have the added burdens of insufficient broadband and wireless coverage to access assistance.
On Thursday, both the Senate and Assembly passed this State Rental Assistance Program measure (Senate Bill 91), which included an extension to the state Eviction Moratorium, and was subsequently signed into law by the Governor. These dollars must be spent quickly according to the state program and in accordance with federal law timelines. If deadlines are not met, not only would unspent funds be re-allocated to other areas of the state, but both entitlement counties and the state’s program risk having to return these dollars to the U.S. Treasury by the end of the 2021 calendar year.
No later than March 15th, state contractors must open applications for landlords and tenants in smaller jurisdictions. More information on this topic should be released here.