Bryant Phuong bought his eight-unit apartment building in the Tenderloin neighborhood of San Francisco in 1987, a decade after emigrating to the United States from Vietnam.
It was a steady source of income, until the pandemic turned it into a liability.
One tenant went five months without paying rent before disappearing, he said. Another hasn’t paid rent in over a year. Owed around $26,000 in arrears, Phuong has had to dip into his savings to cover expenses on the property.
He’s desperate to get help, but says he has been waiting in the dark after submitting his application over a month ago. That wait has him considering selling the building through which he hoped to retire and build generational wealth for his two kids.
“That was my American dream,” he said. “Now it looks like we might as well let it go.”
David Haas, managing broker at Ernst & Haas Management Company in Long Beach, said nearly a fifth of the company’s 1,100 clients have left the rental market over the past year. That’s not so much because of people who fell behind on rent, but because of perceived risk.
“Houses, condos, the stuff we manage, that stuff is coming off and being sold,” Haas said. “With all the statutes and regulations, they’re not seeing the risk as worth the higher rents. So what it’s doing is it’s driving rents through the roof.”
Groups around the state are worried about what it will mean for rent prices, tenant welfare and generational wealth for people of color if mom-and-pop landlords call it quits.
Jimar Wilson, Southern California market leader at Enterprise Community Partners, remembers growing up in the historically Black neighborhoods of South Los Angeles with his two brothers and single mom. The threat of eviction, he said, was always looming.
“It could’ve been a lot worse had it not been for the property owners who were indigineous to the community, who were willing to work with the community,” he said.
Wilson said low-income neighborhoods of color will need a lot more aid to prevent further gentrification and economic devastation.
The state has offered jurisdictions three options to roll out the rent relief program: The state can do it for them, the city or county can do it themselves or the jurisdiction can distribute its share of federal dollars using its own rules, and let the state distribute the rest.
Officials admit it’s complicated — and landlords agree.
San Francisco, where Phuong lives, opted for the third option. But officials there have yet to roll out their program. People can submit applications to the state, but the state won’t review them until San Francisco sets its eligibility requirements. In some cases, the state money will only go out once the local money is spent, to prevent duplication.
The application is long and requires applicants to upload several documents, including federal tax withholding forms, lease and mortgage information from landlords and proof of loss of income from tenants.
That’s necessary, according to state officials, to prevent a repeat of California’s unemployment department debacle, where fraud may have totaled more than $31 billion. But it’s also making it more difficult to get the help to those who need it most.
Zaid Tahan, a landlord in Riverside, said his tenants are struggling to prove they lost income because of COVID-19. The rules in the city of Riverside and Riverside County allow landlords to get 100% of the back rent owed. Tahan only hopes to get half of the $40,000 total his tenants owe, at most.
Let’s make sure that, before you award these funds, there is a level of cultural competence and language access so that everyone can benefit, not just those who pay lobbyists in Sacramento or San Francisco.
Nanette Fowler, executive director of Shores of Hope, a small nonprofit helping people in West Sacramento sign up for the program, says one tenant had to meet with her staff three times to complete his application. Most people haven’t heard of the program, or don’t know they’re eligible.
“I can’t imagine doing this in a rural community,” she said. “I mean, we’re across the bridge from the Capitol.”
Some landlords keep their lease on a napkin, and many rural tenants don’t have access to reliable broadband or a scanner, so that requires far more time and handholding, according to Katie Wilbur, executive director of RH Community Builders in Fresno.
“That was one of the conversations we had with Fresno County early on,” Wilbur said. “The allocated money (under the new law) was not going to be enough to make the program successful.”
Community-based organizations across the state helping to roll out the program repeated the same message: There’s simply not enough funding to help them reach those most in need.
“It doesn’t bring us confidence to know we’re underfunded yet expected to serve,” said Deutron Kebebew, a program director at Community Bridges in Santa Cruz.
Kebebew said his organization didn’t get enough money to fund two full-time positions. Yet medium to large property management companies often have more staff members to help tenants submit applications.
That could create an uneven playing field for the mom-and-pop landlords who most need aid, according to Connie Chan, a member of the San Francisco Board of Supervisors.
Chan introduced a resolution, passed unanimously by the board, to track which landlords benefit from their local program — which the state isn’t set up to do. She’s also urging corporate landlords to negotiate their own rent relief with tenants, to prioritize funds for small property owners.
“Let’s make sure that, before you award these funds, there is a level of cultural competence and language access so that everyone can benefit, not just those who pay lobbyists in Sacramento or San Francisco,” she said.
Moving forward
No one knows exactly how much tenants across California owe their landlords. But if applications so far are any indication, the need for rent relief is enormous.
In just a few weeks, the city of Los Angeles received more than 124,000 applications, requesting about $330.5 million, compared to the $235.5 million available for this round of assistance, according to the mayor’s office.
As of April 23, state-administered rent relief programs had received more than 51,000 applications requesting nearly $355 million in assistance. The bulk of those applications were submitted by tenants, according to Russ Heimerich, deputy secretary of communications at the state Business, Consumer Services and Housing Agency, which is rolling out the “Housing is Key” program.
Another nearly 100,000 applications are in progress, with more than $907 million available in total. Some of those funds, however, won’t be available until local programs’ funds dry up.
More money is on the way. California expects to receive about $2 billion more for rental assistance from President Joe Biden’s American Rescue Plan, Heimerich said.
The guidelines for those funds have not been laid out yet. That matters, Heimerich explained, because many of the requirements of money allocated through the new state law were set by the federal government. That includes, for example, that the money goes to landlords first, and that the bulk be used for back rent, instead of other forms of debt.
With statewide eviction protections set to expire June 30, advocates worry that landlords will file evictions in droves starting in July. While the law will continue to protect those who paid at least 25% of their back rent, tenants still have to defend themselves in court. Lawyers are hard to come by in most parts of the state, and winning a case in court without representation is very unlikely, advocates say.
“If we had a really well-oiled legal tenant support system, it could be better,” said Svanoe, from the Alliance of Californians for Community Empowerment Action. “But that’s not where we are right now. So people are going to fall through the cracks.”
If the courts are unfriendly to tenants, the state Capitol isn’t an easy place to move legislation protecting renters, either.
Assemblymember Chiu said he and other supporters have to wait and see how well the new law is working before negotiating another deal to prevent evictions. That’s difficult to measure when the majority of checks haven’t been cut and evictions the law has prevented aren’t being tracked.
“All that being said, my colleagues understand how catastrophic it would be if we were to end eviction protections and see a tsunami of evictions occur,” Chiu said. “I’m hopeful that if we need to extend eviction protections past June, we’ll be able to do that.”
In the meantime, tenants left out by California’s rent relief rules are still waiting.
Ryan Furtkamp, who works at UC Berkeley in communications, and his wife moved out of their pricey Oakland apartment in February to save on rent. The couple lost more than half their income at the start of the pandemic when most of her dog-walking business dried up.
His landlord, San Francisco-based Mosser Companies, told him over email that his debt totals more than $25,000. But because he moved voluntarily, he isn’t eligible for state rent relief.
“It feels like we’re being punished for making that decision,” Furtkamp said.
When he first heard the state of California was taking action to protect tenants, “it was a huge relief,” Furtkamp added. “Now, it feels that people are powerless in terms of what’s going to happen to them.”
