As of July 13, 45,253 renters were still waiting for their applications to be reviewed

Among these 45,253 households, 3,610 are awaiting initial review and 41,643 are awaiting review of their requests for additional assistance beyond the initial round of assistance they already received. A key statewide eviction protection for ERAP applicants, which required landlords to verify they had applied for rental assistance before they could move an eviction case forward in court, expired on June 30. The remaining eviction protections generally require a lawyer to enforce, yet most renters facing eviction do not have access to legal assistance. This means that applicants still waiting in line are at imminent risk of eviction — even though ERAP could eventually cover their debt.

The statewide program has denied rental assistance to 133,707 predominantly income-eligible households

Of the households whose applications have been reviewed, 29 percent (133,707) have been denied. The vast majority of these denied households (93 percent) have incomes below 80 percent of the area median income, the income threshold to be eligible for the program.

This current number of denials is lower than the previous number of denials (157,881) reported in our June 23 data update, which was based on the denials data provided by HCD. In response to our inquiry about this reduction in denials, HCD explained that the prior dataset (unbeknownst to us) had included denied applicants located in jurisdictions that are operating local rental assistance programs (Option B jurisdictions), and those applicants have now been excluded. So while we know that at least 157,881 households who applied for rental assistance were denied, 133,707 of them were denied by the statewide program and the rest were denied by local programs.

Most denials were issued between January and May 2022, with 2,429 households being denied in the June 7 to July 7 period

The new data on the dates of denial notices reveals that HCD issued most denials — 80 percent of all denials — between January and May 2022. The highest number of denials (29,002) were issued in April, just after the end of the program. As previously reported, the share of applicants being denied assistance increased significantly after the close of the program — from 21 percent on March 30 to 29 percent as of July 13.

The court order requires HCD to pause the appeal clock for applications that were denied on or after June 7 until the court hearing that will take place in the fall, providing applicants with more time to appeal. According to the July 13 data provided by HCD, 2,429 applicants were denied between June 7 and July 7, and those applicants would be affected by this part of the order. This number is likely an underestimate because the dataset excludes landlord applications and does not take into account tenants who were denied earlier but didn’t receive notice of denial until after June 7. Many tenants report that they never received a notice of denial and that they learned about their denial indirectly through their landlord. The order does not require HCD to tell tenants about this pause, and so far HCD has not notified impacted tenants.

The vast majority of applications (83 percent) were denied for one or both of two reasons: "non-responsiveness" and "inconsistent/unverifiable information"

The new data on the basis for denials shows that the vast majority of denials (110,558 households, or 83 percent) were issued for one or both of two reasons: 1) “Multiple outreach attempts were made to contact the applicant, however, no response was received and the application is deemed incomplete” and 2) “Inconsistent or unverifiable information has been provided by the applicant and cannot be substantiated by the program.”

The third most common reason for denials (7 percent) was requesting rent outside of the eligibility period, presumably including requests for rent relief for April, May, and June 2022 prior to HCD’s abrupt decision to end the program and deny rental assistance for any time after March 31, 2022. A small share of denials were due to other eligibility issues, such as having incomes above the low-income threshold, not having unmet need, not being a qualified resident, not demonstrating Covid-related hardship, living outside of California, or having rent above the cap of 400 percent of fair market value.

This data underscores serious concerns about the denial process, which have been raised by tenant advocates and is central to the lawsuit, including:

• The notices indicating that the applicant submitted “inconsistent information” are confusing to tenants because they do not explain what information is inconsistent or how to fix the problem. Nor do they say whether the tenant or their landlord submitted the “inconsistent information” —the notice refers only to the “applicant."

• Tenants who do not speak English are also denied for being “non-responsive” when they are unable to respond to HCD notices sent only in English. 

• Tenants are also denied for being “non-responsive” while they are in the process of submitting requested documents, and they are even being retroactively denied without explanation after they have already been approved and provided the rental assistance funds to their landlord. 

• Tenants who don’t agree with the denial decision are not offered any chance to see the documents or information HCD used to deny their application, and HCD does not provide a meaningful opportunity for the tenant to explain why they should be approved.

Thus far, 20,013 households have appealed the decision on their Housing Is Key application

The statewide program allowed applicants to appeal the decision made on their application within 30 calendar days of the determination. Applicants could appeal for three reasons: 1) the eligibility determination, 2) the amount awarded for rent or utilities, or 3) their denial. Thus far, 20,013 households (4 percent of all applicants) have submitted appeals.

HCD has approved 94 percent of appeals related to eligibility or the amount awarded

Of the 20,013 households that appealed their decision, 10,888 (54 percent) appealed for the ineligibility determination or amount awarded.* HCD has reviewed almost all of these appeals (96 percent). Nearly a third of these appeals were from applicants living in local jurisdictions that did not participate in the statewide program; as a result, these applicants were redirected to those jurisdictions. Of the 7,152 of these appeals that HCD reviewed, 6,734 (94 percent) were approved, meaning that HCD either reversed its initial determination and classified the applicant as eligible for assistance or approved the full amount requested.

More than three-quarters of appeals for denials are still awaiting review, but 82 percent of those that have been reviewed were not approved

Of the households who were denied rental assistance, 9,125 applicants (7 percent of all denials) have appealed their denial. The vast majority of these appeals (7,064, or 77 percent) are awaiting review; these appeals are covered by the lawsuit and on hold until the hearing takes place in the fall. In stark contrast to HCD’s largely positive decisions on the non-denial appeals, the agency has denied 82 percent of denial appeals (1,620 out of 1,968) that it has reviewed.

At least 54,746 households are affected by the pending lawsuit over unfair denials

This new dataset allows us to estimate how many renter households are impacted by the lawsuit against HCD for its denials process. There are three groups affected by the court order:

1. The 45,253 households that were still awaiting review of their applications, whose applications now cannot be denied;

2. The 2,429 households that were denied after June 7, whose denials are now on hold and can be appealed; and 

3. The 7,064 households that were denied assistance with pending appeals, whose appeals are paused.

As explained above, this number is an underestimate because the dataset excludes landlord applications as well as tenants who were denied earlier but did not receive notice of their denial until after June 7.

HCD should audit all rental assistance denials and ensure a fair process for appealing denials

The fact that the vast majority of tenants who have been denied ERAP are low-income and lost access to funds they needed to keep their homes based on vague notices citing “inconsistent information” or claiming they were “non-responsive” raises serious concerns about the integrity of the application review process.

Given the large number of denials and their high stakes, the concerns with the review process, and the high share of denial appeals that have been denied, HCD should go beyond what is required by the lawsuit and conduct a thorough review of all denied applications. The agency has touted its administration of the program and should seek to ensure that no tenants are wrongfully denied this assistance and that there is a fair, transparent process for applicants to challenge denials of assistance. 

In addition, we recommend that:

• City and county policymakers should enact strong, permanent eviction protections to prevent unfair evictions and create long-term stability for renters.
• State policymakers should: 
  • Immediately notify all tenants impacted by the lawsuit about the pause on denials and their ability to appeal (this includes tenants whose applications or denial appeals are still in review and who were sent denial notices on or after June 7);
  • Reverse HCD’s policy decision to not cover rental debt for rent debt incurred after March 31 and ensure that the Housing Is Key program covers 100 percent of tenants’ accrued rental debt;
  • Reinstate stronger statewide eviction protections for Covid-impacted renters without preempting local protections;
  • Institute a permanent program to support renters across the state who are struggling to get by with low incomes and exorbitant housing costs and enact more robust rent caps for all tenants;
  • Ensure that rental assistance is accessible to people with limited English proficiency, people with disabilities, and people with limited access to technology; and
  • Target rental assistance to communities of color to combat historical patterns of segregation and racial discrimination in housing opportunity.

California’s Emergency Rental Assistance Program offered the promise of an equitable recovery and delivered more than $4 billion in rent relief to 310,099 renter households struggling to stay current on rent during a global pandemic on top of systemic housing inequities. But the program has also failed many renters who could not access its support, who waited for months for their applications to be reviewed, and who were denied assistance for unclear reasons. The state still has the chance to implement these recommendations and ensure the Californians disproportionately impacted by the pandemic can stay in their homes and have the opportunity to thrive.

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