San Jose and Santa Clara County will rely on a coalition of grassroots charity organizations led by Destination: Home and Sacred Heart Community Service to disburse $57 million in federal rent relief to landlords and tenants suffering the financial consequences of COVID-19 in Silicon Valley.
But not one penny can move until the U.S. Treasury Department announces its rules for distributing the money to state and local governments across the country. Local officials were expecting that announcement last week — the city, county and state already have the money.
The City Council was set to finalize San Jose’s plans to send its $30 million share to the charity network on Tuesday, but the item was deferred to March 9 while the city waits on Washington. Santa Clara County will also not be able to distribute its $27 million to beleaguered tenants and landlords until the federal government releases its directives.
And next week, on the first of the month, thousands of families in Silicon Valley will miss another rent payment.
“We are explicitly prioritizing the people who need help the most,” said David Low, policy and communications director for Destination: Home.
But until the federal government gives more direction about how the money can be spent, “the specifics of it are still in the works,” Low told San José Spotlight.
The delay comes as housing nonprofits across South Bay toil behind the scenes, preparing to get those taxpayer funds into the hands of the people who need it the most — all while distributing millions more in private donations.
When the federal funds are finally released to the charity network, Sacred Heart Executive Director Poncho Guevara told San José Spotlight he plans to activate those groups and expects them to be “operational as soon as possible.”
Guevara said he’s proud of the network of the South Bay community organizations that have helped distribute nearly $36 million in financial aid to 15,000 struggling families since the pandemic began.
“This community has been so far ahead of others in this country since the pandemic hit,” Guevara said. “Starting with the way we initially prioritized community health and immediately built an infrastructure for financial relief.”
Tenants and landlords
Robert Aguirre, a 67-year-old advocate for affordable housing, hasn’t been able to pay his rent since the pandemic started. He told San José Spotlight he’s lost track of exactly how much he owes his landlord.
Aguirre was paying $1,950 a month for a one-bedroom on the west side at the start of 2020. But even though his rent dropped to $1,650 when market rates fell later in the year — he’s in arrears about $20,000.
Next week he’ll miss another payment. And he won’t be the only tenant to fall further behind on rent.
According to the Bay Area Equity Atlas and the Housing Now! California coalition, more than 37,000 households in Santa Clara County owed back rent to their landlords at the end of 2020 — an average of $4,651 for a combined total of $173.5 million.
Jeff Zell has been a landlord and property manager for about 13 years. He owns three buildings in San Jose and two in Mountain View with more than 100 rent-controlled units combined. He manages hundreds more apartments for other small landlords in South Bay.
Zell said the last year has been a roller-coaster ride for tenants and landlords. Some tenants lost their jobs and fell behind on rent, later finding work and catching up. Others made partial payments this past year, while some haven’t paid at all.
Fortunately for Zell, only ten of his tenants are currently in arrears for a total of $70,000. Some of the landlords whose properties he manages haven’t been so lucky.
“This is going to get worse,” Zell told San José Spotlight. “There is not going to be enough rent relief.”
To be eligible for federal rental relief in San Jose, a household must prove its income was reduced by COVID-19, they have been unemployed for 90 days, they’re at-risk of homelessness or they have a household income below 80% of the area median income — $89,750 for a two-person household.
But San Jose is expected to prioritize extremely-low income tenants and those who live in neighborhoods with the highest rates of COVID-19 and job loss. A household is considered extremely-low income if it is at or below 30% of the area median income, $37,900 for two people.
Zell told San José Spotlight he’s hoping to get some of the back rent he is owed from the federal funds. But while some of his tenants will be eligible, not many will meet the 30% threshold.
Aguirre said the amount of back rent he owes is too high to pay off without the federal assistance.
“The situation is bad for tenants and I’m concerned when the money is gone and the eviction moratoriums expire, many people may become homeless,” Aguirre said. “But right now landlords are really getting screwed.”
Editor’s Note: Jennifer Loving, executive director of Destination: Home, serves on San José Spotlight’s Board of Directors.